Knichel News

BNSF and UP: A Look at Two Game-Changers in the Supply Chain Industry

Transporting goods to and from the LA and Long Beach ports in California has always been a tricky endeavor for shippers. This is due to various factors such as congestion, fees, high warehousing and transloading costs, limited drayage capacity, inadequate access to trucking equipment for inland transport, and delays in receiving import containers from the port. These challenges, coupled with other undisclosed ones, have previously caused unnecessary delays and complications in the transportation of goods to and from the Los Angeles and Long Beach ports. Although the issues with shipping goods to and from these ports have improved over the past few years, recent reports from CNBC suggest that labor slow-downs are causing significant delays in maritime traffic. Excessive wait times for container ships have led to congestion at the Los Angeles port, with anchorage wait times ranging from half a day to one and a half days and service times averaging two to five days. Long Beach rail shipments were also temporarily paused due to congestion. These issues have made it difficult for the ports to efficiently handle the influx of shipments.
The new terminals built by BNSF and UP close to the ports in Los Angeles and Long Beach, when they are operational, however, provide hope for a solution to these issues.  Let's take a closer look at some of these terminals' key capabilities that might help with or resolve the aforementioned problems.
BNSF's Barstow International Gateway: Key Features and Benefits 
  • The port's location in Southern California is crucial to its success. It is strategically situated to reduce congestion in the ports of LA and Long Beach, resulting in faster and more efficient transportation of goods.
  • Sustainability is a top priority for the Barstow International Gateway. The port is committed to reducing carbon emissions by 30% by 2023 through the use of solar power on top of warehouses, battery electric yard trucks, and battery electric trucks.
  • The port's efficiency is also a major selling point. It offers both transload and intermodal capabilities, with adjacent transload warehouses, allowing for seamless transportation of goods from one mode of transport to another, further improving efficiency.

Overall, the Barstow International Gateway is set to be a game-changer for the supply chain industry in the US, offering a more sustainable and efficient way of transporting goods. However, it does face competition from Union Pacific's new intermodal terminal in West Colton, California. The Inland Empire terminal will transload imports from containers onto intermodal trains heading to the Midwest and Texas. Union Pacific's plan is to expand its intermodal presence into its West Colton yard, which will allow them to compete effectively for domestic freight and reduce dray costs.

Union Pacific's Intermodal Terminal: Key Features and Benefits 

  • The terminal's location in the heart of the Inland Empire is strategic, as almost half of the ports' volume headed for inland markets is transloaded in this region.
  • The terminal is initially servicing Chicago, with plans to expand to destinations in the Southeast and Dallas.
  • Union Pacific is putting new dots on the map to help intermodal penetrate more markets, as it believes intermodal is a growth engine.
These new terminals have ambitious plans and significant investments, which could be the solution to the challenges faced by the ports in Los Angeles and Long Beach. By improving efficiency and sustainability, they have the potential to attract traffic that was previously lost due to the issues highlighted earlier in this post. It will be fascinating to see how these new terminals impact the supply chain industry, and we are hopeful that they will address the challenges that have plagued the previously mentioned ports. If they prove successful, we look forward to expanding more of our business out west and taking advantage of the improved efficiency and sustainability offered by these game-changing developments.
Ship Congestion at LA Long Beach
Truck Gridlock at Long Beach