Industry News

Sweet Home Chicago: How the Largest City in the Midwest is Becoming a Global Bottleneck for Freight

 

Let’s talk trains. Clearly not the most discussed form of transportation in the U.S. but arguably one of the most important. Now, in the month of August, in the year of supply chain madness, trains have taken the spotlight. If you’ve ever Googled ‘freight train lines’ when you’re bored late at night you’re not alone. One thing you’ll notice is that most of the vessels lead to the wonderful city of Chicago, which begs the question, why is Chicago such an epicenter for rail?

Flashback to the 1800s, the Midwest served as a hotspot for natural resources, many of which included parts to build railroad tracks—iron and timber. Major rail companies called Chicago their home, which made it easy to build the network outwards. In addition, Chicago’s geographic location in the U.S. mixed with manufacturing, movement of natural resources, cattle, and a lot of political discussions helped secure its place as America’s premier rail hub.

Fast forward to today. Six of the nation’s seven major railroads pass through the city. Nearly half of all intermodal rail traffic goes through Chicago. If your train is late, most times you can probably point your finger at the windy city.

The ripple effect that first started on the coasts is now ending up at Chicago’s front door turning them into a global bottleneck. Today, wherever the freight stops at a place other than its final destination, it becomes the new center of attention. According to an article in the Wall St. Journal, “seaborne imports to the ports for onward shipment to Chicago and the surrounding area rose 32% year-over-year in the second quarter and 18% compared with the same period in 2019.” Yards are filling to capacity and freight railroads can’t switch them for onward transport fast enough.

In order to provide relief, several railroad companies suspended service from the West Coast to Chicago in July for up to seven days. Yards are being reorganized to create space and even abandoned intermodal facilities are being reopened temporarily. Freight already behind schedule awaiting unloading at congested West Coast ports is now even further delayed awaiting rail transit to the Midwest. In addition, some ocean carriers are discontinuing a through service to inland ports or are adding a significant destination surcharge to recover the lost time that their containers are tied up.

Needless to say, it will likely get worse before it gets better. Businesses are now challenged with a dilemma of speed versus price. While rail still may be less expensive it will take much longer to reach its destination than a pricier semi. With the high shipping season now beginning, the industry will be working around the clock to prepare for shipping gridlocks through the end of the year. According to a recent article from Freightwaves, “book now or ‘Christmas may be canceled.’”

M.E. Dey staff is working around the clock to provide our clients with creative solutions to move their freight. As always, we encourage customers to book well in advance and contact our import team with any questions.

 

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