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Chicago Rail Yards – New Chokepoint

Aug 10

Chicago is emerging as a new bottleneck in the global supply chain as rail, trucking, and logistics operators struggle with a glut of imports from Asia reaching the Midwestern freight hub. The freight railroads are trying to catch up as containers arrive faster than they can be switched for onward transport, leading to ever-higher stacks of containers at the region’s yards. The strains are being exacerbated by driver and equipment shortages across the shipping, trucking, and rail industries.

The situation in Chicago is strained because all seven of the major North American freight railroads converge, creating a complicated web of operations in which inbound and outbound shipments are traded off between trains and trucks. It is also located within a 500-mile truck journey of about one-third of the U.S. population, making it a prime distribution hub.

The congestion is the latest bottleneck in supply chains that have been knocked off balance this year by container shortages, tight capacity, and events such as the grounding of the Ever Given container ship in the Suez Canal in March, backups at the Yantian port in Shenzhen, China, and other incidents that led to ongoing delivery delays.

The key to managing and mitigating these supply challenges is through good planning. Spending the time to identify, quantify, and create mitigations is a great first step to reducing your supply chain risk.

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