US railroads crack down on terminal free time for shippers

US railroads crack down on terminal free time for shippers

At least two Class I railroads are cracking down on how long shippers can keep their containers and trailers at intermodal terminals via shorter free-time windows — and one of the railways has hiked storage fees —  in an effort to improve network velocity.

Their efforts, unsurprisingly, have frustrated some shippers that have found that the intermodal rates don’t include the all-in transport costs since they are getting dinged with storage fees for going over their allotted free time. Opinions within the industry differ on how effective dwell time policy changes have been at improving intermodal service.

BNSF Railway and CSX Transportation have made changes to their terminal dwell policies in the past year, while Union Pacific Railroad has made none. Neither Canadian National nor Norfolk Southern railways responded to inquiries regarding changes to dwell time policies. And while a CP spokesperson said that the Canadian railway is always working to improve the consistency and reliability of service, he did not provide further detail.

Those Class I railroads that have made changes are holding firm that their efforts appear to be gaining traction. Railroads, however, do not report dwell times for how long intermodal containers or trailers linger in yards before charges start to be assessed and there are no statistics publicly available on those times, according to Larry Gross, intermodal analyst at FTR Associates.

“Velocity is sometimes affected because terminals cannot accept a train because they’re clogged, but I wouldn’t expect it to be a direct effect, except to the extent if it speeds up the terminals,” Gross told

Those U.S intermodal train speeds, an indication of service reliability, have been improving. The four-week average for Class I intermodal train speeds in October, excluding Canadian Pacific Railway, was 30.6 miles per hour, according to Gross. That’s 7.8 percent ahead of last year and just 1.5 percent behind 2013, Gross reported.

Gross, however, said that what impact the dwell time policy changes may have on train speeds and intermodal service is minimal, at best.

“I think you’re finally seeing the results of lower volume on the network — that is, carload volume — and the network is becoming more fluid,” Gross said.

According to BNSF Railway spokeswoman Amy Casas, “While it is too early to draw firm and final conclusions, since having made the adjustments to our terminal dwell policy in August, we have seen destination dwell times improve — and the improvements are being made amid growing volumes.”

The crackdown is just one way U.S. railroads  say they are working to restore intermodal rail service that still hasn’t recovered from the 2013-2014 winter weather that roiled networks nationwide. Over the past year, Class I railroads have been beefing up infrastructure, adding locomotives and reorganizing operations, often with the primary intent to bring service levels back up to 2013 levels.

“Union Pacific has not made any recent changes to our dwell policy; however, we continue investing in our network and working with customers to minimize dwell time, while maximizing efficiency,” UP spokeswoman Kristen South told

While weaker intermodal volume along with carload declines have also contributed to improved intermodal service, the railroads are adamant that their changes — including those to dwell time — are also playing a part in recovering service levels.

BNSF modified its policies for intermodal terminal dwell time in August in an effort to improve circulation and prepare for recent and anticipated growth in intermodal traffic. The railroad rearranged dwell time groupings and increased charges for at least some of its terminals nationwide.

Since August, terminals in Los Angeles; Phoenix; Portland, Oregon; San Bernardino, California; Seattle; St. Louis; and BNSF’s Cicero, Corwith and Willow Springs terminals in the Chicago area now have just 24 hours free time available after the load arrives at the facility.

Terminals in Alliance, Texas; Albuquerque, New Mexico; Denver; El Paso, Texas; Houston; Memphis; New Orleans; Omaha, Nebraska; Spokane, Washington; St. Paul, Minnesota; as well as Logistics Park Chicago, Oakland International Gateway and Logistics Park Kansas City now offer 48 hours free time after the load arrives at the facility.

A $150 daily storage charge is also in effect at terminals in both groups — a $50 increase for 11 terminals.

Additionally, Sunday is no longer be a “free day” at these terminals, as the railroad returns to its previous policy of including Sunday in the chargeable time calculation.

The new terminal policies should cut down on what the railroad termed the “weekend effect,” which it has highlighted as a specific factor behind terminal dwell.

Current freight patterns indicate that dwell time is greatest for units made available for pick up on Friday, Saturday and Sunday. By Monday morning, terminals are often exceeding capacity and congested.  

“By smoothing freight flows and terminal inventories across the week, all parties in the supply chain can access additional capacity and receive more consistent service,” Casas said.

Casas added that while she couldn’t speak on shippers’ individual experience, BNSF anticipates that shippers that are now becoming accustomed to changing policies and rates will find that the improved service reliability and consistency that is part and parcel of that change was well worth the initial frustration.

“We expect that our customers are seeing this translate to higher equipment turns and that drivers are having a better experience at our facilities,” she said.

On the East Coast, CSX Transportation too has seen new policies have a positive impact on dwell time at terminals throughout its network.

“Reducing on-terminal dwell time is an important part of continuing to improve intermodal network efficiency and customer service,” CSX spokeswoman Melanie Cost told “Reductions in congestion and delays benefit our customers and the drivers that utilize our intermodal facilities.”

CSX in September reduced the free time allotted to shippers at its Memphis terminal from three days, the day of notification plus two, to two days, the day of notification plus one, according to Cost.

Cost did add, however, that dwell times are only a fraction of the work CSX has done to help in the service recovery effort this year. The railroad, she said, acknowledges that changing dwell time policies is not, and should not be, its primary tactic.

“Really our primary way to reduce our turn times and increase our fluidity is to work with customers,” she said, “rather than through policy changes.”

Contact Reynolds Hutchins at and follow him on Twitter: @Hutchins_JOC.