By Tina Wu 

Shippers now face a new challenge to deliver their ocean containers by rail from the U.S. West Coast ports to Midwest cities because most carriers no longer support IPI service in Asia now. The inland point intermodal, or IPI service, has been a popular freight option for U.S. import cargos from Asia to smoothly transfer from maritime to land transportation. However, the current supply shortage leaves only 10% of all Asia-US shipments as accepted IPI bookings.

And the truth is, even for those few lucky bidders, they might still have to risk demurrage and detention charges for holding the containers at the distribution centers. That being said, the rail transit time is unwantedly lingering, without any assurance of how long it will take to finally pick up the cargos and return the empty containers.

Why can’t you book IPI freight now? Why does it take so long to pick up your containers at IPI ramps? To find answers to these questions, we’ve leveraged our inhouse specialty in sales, operations and logistics management, along with first-hand market intelligence from our partners across the U.S. Here are three major reasons of this emerging Asia-U.S. transportation obstacle and a timely solution to overcome it.

Carriers are speeding up empty containers back to Asia
Container shortage has been a key factor in the disturbances of global shipping schedules. This also explains why carriers are restricting their container supply to the inland cities where backlog issues remain tricky. Backlog at railway hubs now causes longer container dwell time at port terminals and IPI ramps, each stage lasting 2~4 weeks. For instance, containers discharged at ports of Seattle-Tacoma were reported to wait up to 30 days to start railway operations. And those arrived at Chicago could take as much as the same time to be picked up from the ramps. To increase return velocity, carriers are managing IPI shipments to speed empty containers back to Asia and improve the loading capacity of U.S. imports there.

Chassis shortage is getting serious in Midwest cities like Chicago
Chassis shortage can be dated back to six months ago, when ports of LA-LB took the greatest hit from the disastrous flood of unloading vessels. Besides South California, major inland cities in Midwest, such as Chicago, Cleveland, Columbus and Detroit, are also struggling with this equipment shortage as the massive import volume from both coasts is moving toward these IPI points. Additional costs like chassis usage fees, therefore, inevitably increase day by day. Carriers used to provide chassis rental though they usually aren’t the owners. Now they are discontinuing the service because of the higher risks of controversial surcharges. The inaccessibility of chassis return coupled with nationwide chassis demand are exacerbating backlog at railway hubs, and extending pick-up time of IPI shipments.

Backlog at railway hubs is consumed slowly when new arrivals are soaring
The U.S. railway operation is staggering. Now you know why, but it’s not enough for you to handle the IPI supply shortage because the backlog could get worse! Some insufficiencies, such as containers, railcars and even additional labor are being tackled, and improvements of dwell time have been made. For instance, rail container dwell time in Los Angeles was shortened from 12 days in April to 10 days in May. But in general, the supply is still not competing with the demand, starting from the celebration of July 4 and lasting to Christmas. Container and chassis shortages are likely to jump back to the scene.

Transloading from seaports to the door of the consignee becomes the ideal way to inland cities
As transpacific IPI supply is tightening, transloading becomes the faster way to the U.S. Midwest cities. Local delivery companies can load discharged cargos to the 53’ domestic containers in three days, compared with IPI dwelling time up to 14 days. With more efficient transit time and even better freight rates, transloading businesses are thriving across the country amidst the U.S. rail congestion. We expect more cooperation with shippers and agents who are interested in taking the greatest advantage of this timely transportation solution. For more details, please follow our latest updates on Blog!