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Heavy Congestion Prompts Quantix to Announce Additional Railcar Surcharge

Heavy North American railcar traffic and railyard congestion has pushed one major logistics company serving the resin and chemicals industry to implement a railcar surcharge.

In a letter to customers, Texas-based Quantix said it would be implementing a rail congestion surcharge at a one-time fee of $175/railcar on all railcars arriving at its terminals on or after May 1.

The company added that rail congestion has pushed its domestic facilities beyond their designed capabilities, and as it works to explore storage alternatives, increased inventory and congestion is increasing its labor, fuel, and switching costs. The supply chain crunch is also causing an increase in the number of labor hours required to spot a specific car for packaging or bulk loading, with the accompanying increases in labor and diesel fuel costs, which is currently above $5/gallon and expected to increase further.

Quantix added that when the shipping market stabilizes, diesel costs recede, and product flows smoothly, the surcharge will be removed.

The railcar surcharges come alongside increased North American rail traffic, according to data from the Association of American Railroads (AAR). Based on AAR data for the week ending April 9, North American chemical railcar loadings were up 3.5% from a year earlier. Chemical railcar traffic was also up 5.2% year on year to 660,455 railcar loadings.

By Brian Balboa for The Plastics Exchange.

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