Containers are piling up around the country and trains are waiting for longer stretches at depots, the Wall Street Journal reports, frustrating industrial shippers and exacerbating delays across U.S. supply chains. Railroad executives are citing the tight labor market while existing employees say they are overworked and that wage increases are long overdue. Shippers say they started to suffer substandard service levels last fall and complained to federal regulators about delays disrupting the production and delivery of everything from ethanol to grain and livestock feed.
The railroads are reporting higher profits (see below) under the leaner operations known as precision scheduled railroading. But some shippers say their service is getting worse and their costs are increasing, as bunching goods into one shipment rather than multiple loads to meet the rail requirements complicates their operations.
- Union Pacific’s second-quarter operating revenue rose 14% despite a 1% decline in carload volume.
- Second-quarter revenue at CSX rose 28% on pricing and fuel surcharge gains along with the addition of trucker Quality Carriers.
- Maersk Line is warning customers that rail congestion is delaying shipments from Canada’s West Coast to inland destinations.
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