Norfolk Southern Rail Has Opened New Services Between NY-NJ and Baltimore
Starting April 5, Norfolk Southern NS) Rail began transporting containers to Baltimore after container ships were rerouted to the Port of New York and New Jersey (NY-NJ) following the collapse of the Francis Scott Key Bridge.
The temporary service runs from the Elizabeth Marine Terminal at NY-NJ to Bayview Yard, a container terminal just 15 minutes north of the Port of Baltimore, after which the containers are drayed the remaining distance to the port. This additional service allows local truckers to continue serving the Baltimore area without transporting containers the almost 200 extra miles.
CSX has also announced a similar rail service, picking up containers from NY-NJ and transporting them directly to Seagirt Terminal in Baltimore. CSX is the only rail operator currently permitted to directly access Seagirt’s on-dock rail yard. However, NS is currently in talks with Ports America, Baltimore’s terminal operator, regarding temporary access to the rail yard on a schedule that works around that of CSX.
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Rail Dwell Times Jump in California in February after Import Surge
The increase in rail dwell times in California is likely evidence of an import surge in February, while also outlining the challenge faced by railroads to cope with fluctuating volumes.
Asia imports into the US jumped by 40% year-over-year in February after January rose by 18% compared with the previous year. However, the import surge is not the only contributing factor to California’s increasing rail dwell times.
The PMSA’s report also found that on average in January, 190 double-stack well cars moved out of the region each day without being replaced by empty incoming cars, contributing to the equipment deficit. Market volatility also makes repositioning rail equipment a challenge, even if carriers give sufficient warning since railroads need to ensure they have enough free space on the tracks to accommodate empty cars, which can occupy over 100 miles of track each month.
This instance in California should be viewed as a reminder to shippers and the rest of the trade community that even if there are sufficient rail cars on the West Coast, repositioning efforts might not be able to keep up with current market volatility. In the case of a severe and sudden import boom, rail yards may experience similar bottlenecks as they did during the pandemic, regardless of how effective the planning is.
Container Carriers Blank Fewer Trans-Pacific Sailings than in the Last Two Years
The Ocean Shipping Reform Implementation Act, dubbed OSRA 2.0, was passed by the US House of Representatives on March 21 to amend aspects of the landmark Ocean Shipping Reform Act of 2022 (OSRA-22) bill. However, critics are now pointing out that OSRA 2.0’s focus has changed to improving US scrutiny of the Chinese government’s influence over US and international shipping, instead of making technical corrections to OSRA-22.
One missing component from OSRA 2.0 is the clarification of which federal agency is responsible for regulating rail storage fees when ocean carriers are responsible for the final delivery of cargo. Shippers and consignees wishing to contest what they believe are unfair rail and demurrage charges currently have no government recourse. Due to an exemption for intermodal services from the US Surface Transportation Board, it is still unclear which agency should bear regulatory responsibility, although representatives are working on an additional bill to provide clarity on the matter.
A second component absent from the bill is any repeal of limited antitrust immunity for carriers after the Federal Maritime Commission’s (FMC’s) Mark Vekich and Carl Bentzel, both FMC commissioners, suggested that the FMC be given the power to legally block anti-competitive working agreements between ocean carriers, instead of leaving this power with the courts.
East Coast Ports Increase Operating Hours to Accommodate Baltimore Diversions
This temporary arrangement could last for months, with the Maryland Port Administration still unsure about when Baltimore will be open to vessel traffic. The majority of diverted containers are arriving at Port Newark Container Terminal (PNCT) in NY-NJ. From April 1, the terminal extended its truck gate closing time from 4 pm to 6 pm, opening Saturdays from 7 am to 3 pm starting April 6.
CSX Transportation’s new north-south service from NY-NJ and the Kerney intermodal terminal in New York traveling to Baltimore also started on April 2. The new service has a capacity of 150 containers calling directly into Baltimore’s Seagirt terminal.
In a similar move, the Port of Virginia has begun opening its gates at 5 am instead of the regular 6 am. All affected terminals and port operators have stated they do not expect the diversions to hinder port operations after the improvements made to equipment capacity and port infrastructure following the pandemic.
Baltimore Port Closure Causes Flat Bed Spot Rates to Climb
As flatbed spot rates on this trade lane increased, dry van rates between Baltimore and Hagerstown fell from February’s average of $495 to $422 in the week ending March 29.
Baltimore’s port closure has also occurred during its peak machinery import season, as Baltimore is the busiest US East Coast port for roll-on/roll-off cargo such as vehicles, heavy construction equipment, and large machinery. The week before the collapse of the Francis Scott Bridge, outbound flatbed volumes from Baltimore increased 57% sequentially.
(Source: Richard Alexander | Pixabay)
