U.S. Rail Congestion: Challenges and Solutions in Inland Logistics

Introduction: The State of U.S. Rail Networks

The U.S. rail network is facing a new wave of congestion, reminiscent of the challenges seen in November 2021. This situation is particularly intriguing as it occurs against a backdrop of falling carloads and a darkening freight demand outlook. Our analysis reveals that employment in the rail sector has not yet recovered to pre-pandemic levels, lagging behind the volume development over the past 18 months. This blog post delves into the current state of U.S. rail networks, exploring the causes of congestion, its impacts, and potential solutions.

Rail Dwell Times: A Key Indicator of Network Stress

One of the most telling indicators of rail network congestion is the dwell time at key terminals. Dwell time refers to the period a railcar waits for its onward journey. Recent data shows that certain terminals are experiencing significant increases in dwell times, signaling focused disruptions in the network.

Of particular concern are the Barstow and West Colton terminals in California. These locations play a crucial role in many intermodal routes, serving as vital links for transporting containers and chassis away from West Coast ports. The data for Q3 2022 shows a worrying trend:

• Barstow: 24.3% increase in dwell time compared to Q2 2022
• West Colton: 10.5% increase in dwell time compared to Q2 2022

These increases are not isolated incidents. Both terminals had already seen slower operations in Q2 compared to Q1 2022. The implications of these extended dwell times are significant, particularly for intermodal shippers from the West Coast who are now facing slower inland transit times.

The Ripple Effect: From Rail to Ports

The congestion in rail networks is not occurring in isolation. There are signs of a knock-on effect impacting seaport operations. This interconnectedness highlights the complex nature of our logistics systems and the need for comprehensive solutions.

A striking example of this ripple effect can be seen in Atlanta, where dwell times have spiked by 54.6% year over year. This significant increase may be indicative of growing congestion in ports such as Charleston and Savannah. However, it's worth noting that there has been a slight dip in Q3 2022 compared to Q2 2022 in Atlanta, suggesting some volatility in the situation.

Interestingly, not all terminals are experiencing the same level of congestion. The average for Chicago rail yards saw only a modest increase of 6.2% year over year in Q3 2022. Meanwhile, other central terminals have actually seen declines in dwell times:

• North Platte, Nebraska: 17.2% decrease compared to Q2 average
• Kansas City: 56.2% decrease compared to Q2 average

These varied statistics suggest that while network congestion is a significant issue, it has not yet spread uniformly across all terminals.

The Paradox: Declining Rail Traffic Amid Congestion

One might assume that the current congestion is due to increased volume. However, the data tells a different story. There are clear signs of a slowdown in trade activity, as indicated by Flexport's Logistics Pressure Matrix.

Data from the Surface Transportation Board reveals a decrease in intermodal carloads, which accounted for 49% of total rail traffic in 2021. As of July 20, 2022, the trailing 4-week average of container and intermodal carloads in the U.S. was down 3.6% year over year. This decline is not an isolated trend; total carload handling, including farm, energy, mineral, and automotive freight, fell by 1.9% year over year in the same four-week period in 2021.

This downturn in volume suggests that the current congestion is not driven by an increase in intermodal traffic demands. Instead, it points to other underlying factors contributing to the network stress.

The Employment Challenge in Rail Logistics

One of the key factors contributing to the current rail congestion appears to be related to employment. The rail industry has undergone significant changes in recent years, particularly with the move to precision railroading by Class 1 railroad firms. This shift, combined with the impact of the pandemic, has created challenges in terms of labor availability.

The employment situation in the rail sector stands in stark contrast to other areas of logistics:

• Rail employment has fallen by approximately 20% since January 2019
• During the same period, volumes handled across all car types have increased by 5% to 10%
• Other logistics sectors, such as warehousing, have seen employment levels recover

This disparity between employment levels and volume handled indicates a significant strain on the existing workforce in the rail sector. The situation has become so critical that it recently required intervention from the White House, which put in place an emergency order to prevent strikes for 60 days.

The Role of Digital Logistics Solutions in Addressing Rail Congestion

As the rail industry grapples with these challenges, it's clear that innovative solutions are needed. This is where Digital Logistics Platforms like FreightAmigo can play a crucial role in helping businesses navigate the complexities of the current logistics landscape.

Real-Time Tracking and Visibility

One of the key features offered by FreightAmigo is the ability to track shipment status in real-time. This capability becomes even more valuable in the context of rail congestion and varying dwell times at different terminals. With connections to more than 1000 reputable airlines and shipping lines, FreightAmigo provides businesses with up-to-the-minute information on their shipments, allowing for better planning and decision-making.

Multi-Modal Transportation Options

Given the current challenges in rail transportation, businesses may need to consider alternative shipping methods. FreightAmigo's Digital Platform allows users to compare door-to-door freight quotes for various transportation modes, including international courier, airfreight, sea freight, rail freight, and trucking solutions. This flexibility enables businesses to choose the most efficient and cost-effective option based on current conditions.

Streamlined Customs Clearance and Documentation

With potential delays in rail transportation, efficient customs clearance becomes even more critical to avoid further holdups. FreightAmigo offers streamlined customs clearance services and automated shipment documentation. These features can significantly reduce processing times and help mitigate the impact of rail congestion on overall shipping timelines.

Expert Support for Complex Logistics Challenges

Navigating the current logistics landscape requires expertise and adaptability. FreightAmigo provides 24/7 support from logistics experts who can offer guidance on how to best manage shipments in light of rail congestion and other challenges. This support can be invaluable in developing strategies to minimize disruptions and maintain efficient supply chains.

Conclusion: Adapting to the Changing Logistics Landscape

The current state of U.S. rail networks presents a complex challenge for businesses involved in logistics and supply chain management. While rail traffic is declining, congestion persists, likely due to a combination of factors including employment challenges and systemic changes in the industry.

In this environment, the ability to adapt quickly and make informed decisions is crucial. Digital Logistics Platforms like FreightAmigo offer a comprehensive suite of tools and services that can help businesses navigate these challenges effectively. By providing real-time visibility, flexible transportation options, streamlined processes, and expert support, FreightAmigo empowers businesses to maintain efficient operations even in the face of rail network congestion.

As we continue to monitor the situation in U.S. rail networks, it's clear that innovative, Digital Logistics Solutions will play an increasingly important role in shaping the future of freight transportation. By leveraging these tools, businesses can not only mitigate the impacts of current challenges but also position themselves for success in an ever-evolving logistics landscape.