The United Pacific Railroad (UP) is raising fees for low-volume customers who exceed peak season quotas for the California Outbound Passage as imports from the U.S. West Coast achieve a rare nationwide increase. The new rate hike only affects small batch shippers or shippers who ship enough cargo weekly without qualifying for a specific carrier contract, with no change for those with carrier-specific contracts.
According to data from the North American Multilateral Transport Association (IANA), the increase in domestic and international multicast freight (up 4.8% and 15.8% year-on-year, respectively) was mainly due to outbound traffic from California, while throughput on other busy routes, such as from Port New York and Port New Jersey to Chicago, for example, increased throughput from other traffic-heavy routes, such as Port of New York and Port New Jersey to Chicago, according to data from the North American Association of Multilateral Transport (IANA). Passionism. Data from Railinc, a subsidiary of the American Association of Railinc, showed that as of August, multiservice freight from Los Angeles to Chicago increased by 20.4%, and New York-Chicago increased by 3.4%.
According to Wall Street DailyS&P Global's sister product PIERS statistics show container imports through Long Beach, Los Angeles and the Port of Oakland rose 22.7% year-on-year, and arrivals through New York-New Jersey grew 19.3%, UP said in a client advisory notice that small batch shippers were now in Los Angeles from the start of the week. Containers that exceed the contract quota pay a peak season surcharge (PSS) of $750, up from $500 previously. The railroad also levied a new fee of $300 per container on small batch shippers in Northern California.
In the past six weeks, the railroad company said demand for EMP and UMAX containers owned by rail companies has continued to grow over the past six weeks in Las Loop and Oakland, California. “Demand is expected to increase further in the coming weeks, and we are taking action to reposition containers and increase train throughput to meet the needs of shippers.” UP SUPPLEMENT.
The decision to raise rates only for small batch shippers shows that the limited market situation in California has not worsened significantly since the initial PSS was announced at the end of August. MULTI TELECOMMUNICATIONS SENIOR TEAM TOLDBusiness MagazineThe peak season is very similar to the situation before the COVID-19 pandemic, and private multi-tiered carriers with assets have also developed PSS, but only for specific customers, which is different from the comprehensive surcharges in 2020 and 2021. Multilage providers assess PSS only when shippers exceed peak season quotas. For example, if a shipper ships 20 containers per week, its multiple carrier will add a buffer to increase the peak season quota to 22 containers per week; if the shipper stays within the peak season quota, there is no surcharge.
Shippers who do not have time sensitive cargo often take other options to avoid charges, some will load goods that exceed peak season quota onto trucks, and more commonly, customers will keep excess freight until the start of the new week on Monday, and then reload the cargo, thus avoiding PSS.
