Citing surging demand for its fleet of domestic containers, Union Pacific has assessed peak season surcharges out of Southern California.
“Union Pacific is experiencing an increase in demand for EMP and UMAX domestic container capacity out of Southern California,” the railroad’s Premium Business Team said in an announcement to customers. “It is anticipated that demand will increase further in the coming weeks. Action is being taken to reposition containers and increase train capacity to meet the needs of shippers.”
The company said that in accordance with the terms of the Mutual Commitment Program (MCP), which offers shippers container capacity in exchange for volume commitments, it is declaring Southern California a “constrained market.” Beginning Sept. 1, UP (NYSE: UNP) will apply surcharges for weekly standard and aggregate shipment volume above the surge allowance for each MCP Agreement out of contracted markets.
The surcharges are $300 per shipment for Standard MCP and $500 for Aggregate MCP, the latter typically lower volume shippers.
West Coast ports including Los Angeles-Long Beach have seen a flood of eastbound trans-Pacific volume as shippers move holiday merchandise early to avoid supply chain disruptions.
“We will continue to monitor demand in all markets and make changes to the list of constrained markets or surcharge amounts with notice,” the announcement added.