Union Pacific Halts All Chicago-bound Container Rail Shipments

LUBBOCK, TX – The agriculture industry is not immune to supply-chain bottlenecks, but a recent announcement from Union Pacific to halt all shipments of international containers from West Coast ports to its Global IV terminal in Chicago just adds more concern for U.S. exporters through the containerized grain markets.

Since the global pandemic began, the demand for products produced overseas has skyrocketed leading to record import volumes. In some instances, a reduced workforce in China (and other Asian countries) has led to product shortages (computer chips) while in others it’s a reduced workforce here at home.

There is a shortage of available chassis for shipping containers (which allows trucks to move the cargo inland) which is leading to a backup at port warehouses. Since the containers are not moving, there is a backup for container ships needed to offload their cargo at the port, and the entire situation is leading to a global shortage of available containers.

Union Pacific announced a one week halt in container shipments to allow the backups in Chicago to clear, in hopes that when shipping returns next week, more chassis will be available, containers can begin their roundtrip back to foreign destinations – some filled with ag products – and the overall situation can improve.

Analysts suggest these bottlenecks will continue through the second quarter of 2022.
(SOURCE: All Ag News)