As rail strike looms, tech companies divert chips to trucking

A container delivery truck heads to one of the terminals at the Port of Long Beach in Long Beach, California.

Frederic J. Brown | AFP | beautiful pictures

Tech companies that supply the economy’s vital semiconductor chips have begun shifting shipments from rail to truck with an impending national freight rail strike. DHL Global Forwarding told CNBC that moves are being made to avoid any pre-strike rail preparations that could force rail companies to prioritize cargo.

Tech goods loaded onto trucks include semiconductor chips important to the high-tech sector and the automotive industry.

“This is tech cargo originating in California,” said Goetz Alebrand, head of ocean freight for the Americas at DHL Global Forwarding. Alebrand said there are more trucks now than there were before a rail strike was first threatened in September due to fewer container ships in general arriving at US ports.

“There are more trucks and chassis, but that doesn’t mean there are enough trucks to load all the rail freight onto trucks,” Alebrand said.

Under federal safety measures, rail carriers begin prepare to strike seven days before the strike date. Carriers began to prioritize protecting and moving security sensitive materials such as chlorine for drinking water and hazardous materials during rail cooling.

Ninety-six hours before the strike, chemicals were no longer shipped. According to the American Chemistry Council, railroad data shows a reduced 1,975 trucks of chemical shipments during the week of September 10 when the railroads stopped accepting shipments due to the threat of an earlier strike.

The Association of American Railroads will announce its planning steps, similar to what it said announced in September.

Alebrand said the customer’s goods are not considered perishable or dangerous, it is waiting to be shipped. On average, it takes about two to three days to delete a backup day. The containers before the September strike were held for about 48 hours and took six days to clear.

Delays arising from rail strikes will only add to the delay fees that shippers have to pay to rail for late arrivals.

“DHL Global Forwarding has advised customers of the serious impact a rail strike can have on their operations, including delays and associated detention and deferral fees, ‘ said Alebrand. “Our first priority is to make them aware of the situation so they can prepare for the risk of delays in delivery,” he added.

A December rail strike could have a significant impact on the economy

DHL Global Forwarding is also looking at container locations and as a backup, it will move imported containers out of the rail yard to the extent possible, while reviewing all inbound and outbound flows. border by rail to check if road transport is an option in the event of an incident. strike, Alebrand said.

DHL’s areas of interest include Dallas and Fort Worth, which receive shipments from the Port of Houston. The Port of Houston has handled historic cargo volumes such as trade moves away from the West Coast port to the Gulf and east coast ports because of concerns about a strike among West Coast port workers. Another inland port where DHL is congested is El Paso, a major destination for cargo in and out of Mexico.

“Congress will meet again next week,” Alebrand said. “Now we wait to see what happens.”

A rail strike could begin on December 9 if no agreement is reached between unions and the railway company. Congress can intervene in its power through the Commerce Clause of the Constitution to make laws to prevent strikes or strikes, and to set the terms of the union-carrier agreement. .

American Railroad Association CEO says we're taking every step to avoid rail shutdowns


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