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All Union Pacific Railroad shippers will be subject to a $500 surcharge out of California for excess cargo above a surge allotment beginning Aug. 16, according to an advisory sent to customers on Monday.

The decision comes one week after UP said it would levy the fee on low-volume customers beginning Aug. 9. That announcement exempted BCO-specific contracts, or beneficial cargo owners, but the updated advisory covers all shippers.

UP cited “a significant increase in demand for container capacity across the system” that is expected to “increase further in the coming weeks.” It promised that additional containers will be repositioned, and train capacity added to meet the demand of committed shippers in Los Angeles, Lathrop (Stockton), and Oakland, according to the advisory.

UP says its surcharges are necessary because demand is changing rapidly in California due to effects of the pandemic on the supply chain.

For now, it is not expected that these added surcharges will affect the rates railroads charge to Shipping Lines for the services they offer to US IPI locations.

Source: JOC