J.B. Hunt Can’t Meet Customer Demand for Intermodal Service Due to Congestion

Intermodal shipper J.B. Hunt said this week that it cannot meet the demand for its service because of reduced velocity in the North American railroad network.

During a quarterly earnings call on Monday, Hunt managers said the demand for its services exceeds its capacity.

Managers said another factor behind that was slow customer turn times.

In recent weeks some Class 1 railroads have begun limiting acceptance of intermodal shipments because of congested terminals.

BNSF, for example, is limiting the flow of international containers from the ports of Los Angeles and Long Beach to its Logistics Park Chicago intermodal terminal for two weeks to work off a backlog of containers in Chicago.

Union Pacific has temporarily suspended inbound moves of international containers from West Coast ports to its Global IV terminal in Chicago.

Chicago is the largest single destination for cargo arriving at the ports of Los Angeles and Long Beach, the two busiest ports in North America.

Los Angeles handled record container volume in June, while Long Beach saw record volumes in May.

CSX has been restricting the flow of containers from the Port of New York and New Jersey to terminals in Chicago, Cleveland and Indianapolis.

In Canada, backlogs have been reported at the Port of Vancouver due to fire-related line closures and operational restrictions affecting Canadian Pacific and Canadian National.

Darren Field, president of Hunt’s intermodal division, said labor shortages at intermodal terminals and at customer warehouses is the major reason behind slow turnaround times for Hunt’s containers.

Hunt has imposed accessorial charges and in some cases is restricting capacity to some customer locations in an effort to encourage shippers to increase their turnaround times.

 “We are working very closely with our rail providers and customers to improve our capacity across the network by focusing on reducing the detention of equipment and helping our rail providers reduce congestion across their terminal infrastructure,” Field said.

J.B. Hunt primarily uses Norfolk Southern also routes some containers via CSX.

Field said he does not expect railroads to melt down despite reduced velocity and capacity limits at some intermodal terminals.

He said at some locations employment levels are 5 percent below where they need to be to handle current volume.

“All of the railroads are very focused on these challenges and they are out addressing them,” Field said.

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