As the Christmas season fast approaches, the Port of Los Angeles – a crucial part of the nationwide supply chain – is facing another massive backlog of cargo due to a growing shortage of rail workers, as well as not enough rail cars and failure by some importers to receive their cargo on time.
According to CBS News, Port Director Gene Seroka said that “there are about 35,000 containers that are designated for rail on our docks right now. A normal day looks more like 9,000 units.” Seroka additionally warned that, if no action is taken immediately to address the supply jam, then ships could be backed up off the coast of California in four to six weeks.
Ben Nolan, an analyst at Stifel Financial, blamed the shortage on railroad companies losing as much as 20 percent of their employees over the last three years.
“A lot of that is because they cut their own workforce,” said Nolan. “When you’re hyper-efficient, you’re ill-prepared for unexpected things like pandemics.” He also pointed to a practice utilized by some rail companies to streamline transportation of goods using shorter trains, a tactic known as “precision scheduled railroading.”
In response, Eric Gehringer, Vice President of Union Pacific Operations, said that the company has recently hired hundreds of new employees, and they are currently “handling that volume.”
“Resources beyond the railroad, that’s where we need to see gains,” Gehringer added.
The situation is reminiscent of the supply chain crisis earlier this year, when a number of factors, including a shortage of dock workers and a shortage of truck drivers, led to a massive jam in the supply chain out of the Port of Los Angeles. Cargo containers sat unclaimed in the port for many weeks, and dozens of cargo ships could be seen idling off the coast of California in a stunning visual representation of the breakdown of the supply chain.