Posts Tagged ‘intermodal volume’

J.B. Hunt Can’t Meet Customer Demand for Intermodal Service Due to Congestion

July 21, 2021

Intermodal shipper J.B. Hunt said this week that it cannot meet the demand for its service because of reduced velocity in the North American railroad network.

During a quarterly earnings call on Monday, Hunt managers said the demand for its services exceeds its capacity.

Managers said another factor behind that was slow customer turn times.

In recent weeks some Class 1 railroads have begun limiting acceptance of intermodal shipments because of congested terminals.

BNSF, for example, is limiting the flow of international containers from the ports of Los Angeles and Long Beach to its Logistics Park Chicago intermodal terminal for two weeks to work off a backlog of containers in Chicago.

Union Pacific has temporarily suspended inbound moves of international containers from West Coast ports to its Global IV terminal in Chicago.

Chicago is the largest single destination for cargo arriving at the ports of Los Angeles and Long Beach, the two busiest ports in North America.

Los Angeles handled record container volume in June, while Long Beach saw record volumes in May.

CSX has been restricting the flow of containers from the Port of New York and New Jersey to terminals in Chicago, Cleveland and Indianapolis.

In Canada, backlogs have been reported at the Port of Vancouver due to fire-related line closures and operational restrictions affecting Canadian Pacific and Canadian National.

Darren Field, president of Hunt’s intermodal division, said labor shortages at intermodal terminals and at customer warehouses is the major reason behind slow turnaround times for Hunt’s containers.

Hunt has imposed accessorial charges and in some cases is restricting capacity to some customer locations in an effort to encourage shippers to increase their turnaround times.

 “We are working very closely with our rail providers and customers to improve our capacity across the network by focusing on reducing the detention of equipment and helping our rail providers reduce congestion across their terminal infrastructure,” Field said.

J.B. Hunt primarily uses Norfolk Southern also routes some containers via CSX.

Field said he does not expect railroads to melt down despite reduced velocity and capacity limits at some intermodal terminals.

He said at some locations employment levels are 5 percent below where they need to be to handle current volume.

“All of the railroads are very focused on these challenges and they are out addressing them,” Field said.

Intermodal Volume Up 10.5% in 1st Quarter

May 3, 2021

North American intermodal volume rose 10.5 percent year to 4,616,262 units in the first quarter of 201, the Intermodal Association of North America said.

The comparisons in its IANA’s report are to the same period in 2020.

International container volume rose 14.8 percent to 2,362,726 units from 2,057,685 in 2020.

Domestic shipments rose 4.4 percent to 1,944,262 units from 2,862,499; and trailers increased 20 percent to 309,274 units from 257,805.

“Intermodal volumes were up for the third consecutive quarter through Q1. This growth is projected to continue through the remainder of the year,” said IANA President and CEO Joni Casey in a statement.

“Even considering weak comparisons that supported the other segments, domestic intermodal posted solid 4.4 percent gains.”

The seven highest-density trade corridors, which collectively handled more than 60 percent of total volume, were all up in the first quarter.

Trans-Canada was up 26.4 percent; Midwest-Southwest was up 15.7 percent; and the South Central-Southwest was up 15.6 percent.

The Midwest-Northwest was up 8.3 percent; and the Northeast-Midwest rose 5 percent.

TTX Sees Intermodal Volume Growth Continuing

February 26, 2021

Railcar pooling company TTX expects intermodal volume this year to continue its growth trend.

Speaking during a webcast sponsored by the Intermodal Association of North America, TTX analysts said intermodal growth will be driven by low retail inventories and continued consumer demand for goods rather than services due to the pandemic.

Another factor, the TTX analysts said is the inability of trucking companies to find enough drivers to meet transportation demand.

The TTX panelists projected that international intermodal volume will grow by 7.3 percent while domestic traffic will post gains of 4.7 percent.

Intermodal volume in 2020 was story of sharp contrasts with traffic plunging early in the year as the COVID-19 pandemic took hold before bouncing back in the fall.

Among the assumptions that TTX is making for its 2021 projections are that government pandemic assistance will continue and that the economy will continue to recover from its pandemic-induced doldrums.

It also assumes that growth will continue in parcel shipments due to strong e-commerce which got a boost during the pandemic when retailers were forced to reduce operations and/or many customers became unwilling to shop in person.

John Woodcock, director of market development at TTX, said 2021 will not follow the traditional intermodal pattern of peaking between August and November. Instead, he said intermodal will see a more drawn out peak.

Another change this year will be shifting of more international business from West Coast ports to ports in the East and along the Gulf Coast.

Intermodal Volume Has Reached Capacity

February 7, 2021

Intermodal traffic has reached a capacity ceiling due to bottlenecks in the supply chain.

Intermodal analysts Larry Gross said the demand for intermodal transportation has exceeded the ability of the system to meet it.

Gross, who spoke during a webcast of the Intermodal Association of North America, said domestic capacity is limited and international capacity might be limited as well.

“Now, I can’t necessarily say which link in the chain has been the one that has been the biggest limitation,” he said. “We’ve got so many out there that are under strain, between ports and chassis availability and box availability, and well cars, locomotives, and train crews.” 

Intermodal volume has been a bright spot for railroads over the past few months. Some weekly and monthly traffic volume reports issued by the Association of American Railroads have reported double digit and high single digit growth.

Gross, though, expects intermodal volume to return to more normal levels in the second half of this year.

One widely shared explanation for intermodal growth has been retailers working to replenish inventories that fell during the early weeks of the COVID-19 pandemic when the economy slipped into a recession.

Gross said the intermodal network can’t handle more volume than it is handling now, particularly during a pandemic.

He explained that dock workers being sick with COVID-19 or having to quarantine has slowed the unloading of container ships at some ports, particularly those in Los Angeles and Long Beach, California.

Gross noted that more than 30 ships are anchored offshore awaiting dock space and nearly three quarters of that cargo will be moved via intermodal.

“What we’ve seen is the downside of everybody trying to squeeze through the same keyhole,” Gross said.

Railroads have at times limited inbound volume as a result of higher volumes and slower equipment turn times at warehouses and distribution centers. Drayage capacity also remains tight.

Gross said domestic container volume could be expanded through increased productivity or larger fleet sizes.

He said there is a performance gap between private containers and railroad-owned boxes with the former handling more loads per box per month.

Intermodal Up 9.6% in 4th Quarter

February 3, 2021

Intermodal volume rose 9.6 percent in the fourth quarter of 2020, the Intermodal Association of North America said this week.

In its intermodal quarterly report IANA said intermodal volume for the quarter was 4,874,842 units. The percentage comparison was to the same period in 2019.

International intermodal volume rose 9.4 percent to 2,402,320 units, while domestic container volume climbed 8.7 percent to 2,128,885 units.

Trailer volume increased 17.5 percent to 343,637 units.

The seven highest-density trade corridors handled more than 60 percent of total volume and collectively increased by 10.3 percent in the fourth quarter.

They included Trans-Canada, 19.7 percent; South Central-Southwest, 13.4 percent; and Midwest-Southwest, 13 percent.

Intra-Southeast had a 9.6 percent increase, and Northeast-Midwest, a 9.5 percent gain.

The Midwest-Northwest was up 7.5 percent, and the Southeast-Southwest grew 2.4 percent.

Full-year 2020 total intermodal volume slipped 2 percent to 17,789,192 units compared with 2019.

“Against the backdrop of COVID, all market sectors posted gains, setting the pace into at least [the first quarter of] 2021,” said IANA President Joni Casey in a statement.

J.B. Hunt Expects Intermodal Traffic to Grow

January 21, 2021

A cut of JB Hunt containers bring up the rear of NS train 27R in North East, Pennsylvania.

A trucking company that makes extensive use of intermodal transportation believe is optimistic that intermodal volume will grow faster than truck transportation.

Officials at J.B. Hunt Transport Services acknowledged this week that capacity constraints in Southern California are hindering intermodal traffic.

But in the long term Hunt expects its intermodal volume to grow to 10 million loads annually, up from about 2 million currently.

Hunt has a fleet of 98,700 domestic intermodal containers with orders pending for 6,000 new boxes to be delivered this year.

During a quarterly earnings call Hunt said its intermodal volume in the fourth quarter grew by 1 percent with much of it coming from traffic originating on BNSF.

However, fourth quarter volume in the East was flat. Norfolk Southern is Hunt’s largest intermodal partner in that region.

Congestion at western terminals in the fourth quarter kept Hunt from growing intermodal volume further.

That congestion was triggered by a sharp increase in imports and labor issues.

Intermodal Traffic up in 1.2% in 3rd Quarter

November 4, 2020

Intermodal traffic rose 1.2 percent in the third quarter, the Intermodal Association of North America reported.

Volume during the period was 4,719,462 units. The increase is in comparison to the same quarter in 2019.

On a year-over-year basis, international intermodal volume fell 6.5 percent to 2,290,299 containers, while domestic volume rose 9.8 percent to 2,103,361 containers.

Trailers were up 9.8 percent to 325,802 units during the quarter.

The seven highest-density trade corridors, which collectively handled more than 60 percent of total volume, were collectively up 1.9 percent.

Posting gains were the Midwest-Southwest and the Northeast-Midwest, both at 6.6 percent and the South Central-Southwest, at 4.9 percent. 

Losses were seen by Trans-Canada, 0.7 percent, Intra-Southeast,1.5 percent, Southeast-Southwest, 5.4 percent and Midwest-Northwest, 13.6 percent.

“Inventory replenishment and increasing e-commerce activity, along with some capacity constraints on the trucking side, have helped intermodal to turn the corner this quarter,” said IANA President and Chief Executive Officer Joni Casey said in a statement.

“This trend is expected to continue, but dependent on the ongoing impacts of COVID-19.”

Intermodal Volume Fell 6.7% in 1st Quarter

May 2, 2020

The Intermodal Association of North America said intermodal volume in the first quarter of 2020 fell 6.7 percent to 4,177,989 units compared with the same quarter in 2019.

On a year over year comparison, the international intermodal volume of 2,057,685 containers dipped 11.3 percent, while domestic volume of 1,862,499 containers rose 2.2 percent. IANA said trailers at 257,805 plunged 23.3 percent.

In a news release, IANA officials said the volume decline follows an annual loss of 4.1 percent in 2019

“Intermodal was impacted by COVID-19 related issues at the start of 2020, while trade uncertainty pulled down volume in 2019,” IANA officials said.

Auto plant and other manufacturing shutdowns across North America, coupled with declining imports, also made for a difficult start to 2020 and the effects of the pandemic will make it difficult to to forecast the future.

However, IANA said the decline in the second quarter of 2020 is expected to be much larger.

While volume could surge later this year, international volume likely will fall between 15 percent and 20 percent in 2020 as a result of low demand for imports and the impact of tariffs.

Domestic container loads are expected to decline 15 percent to 20 percent as a result of low demand, falling fuel prices and an expected decline in import transloads.

IANA expects total intermodal loadings to fall about 15 percent in 2020.

North America Intermodal Service Demand Falling

March 18, 2020

Demand for intermodal transportation is falling amid lower container volumes in North American.

Moody’s Investors Service said the transportation sector faces increasing pressure due to the coronavirus outbreak.

In a report issued last week Moody’s said all transportation companies will face lower demand because of disrupted supply chains and slower economic activity.

“As the coronavirus spreads to more countries, the likelihood of longer lasting economic and financial effects has increased, the impact of which may weigh on the North American transportation sector’s financial and credit profile,” said Rene Lipsch, a Moody’s vice president and senior credit officer, in a news release release.

Container traffic at the Port of Los Angeles is down about 25 percent compared with at this time in 2019.

Moody’s noted that freight railroads already were contending with strong competition from trucking companies for container traffic.

But it said that historically railroads have been able to adapt their cost base fairly quickly in the face of weakening demand for transportation services.

The Moody’s analysis, though, said that longer term trucking companies are at risk from lower demand due to more prevalent supply chain disruptions, a broader slowdown in economic activity and potential restrictions on freight routes.

The Association of American Railroads in a report for traffic volumes in the week ending March 7 said the falloff in intermodal loadings was more noticeable than the norm over the past year.

Railroads handled 232,561 intermodal containers and trailers during the first week of the month, a 14.1 percent decrease compared with the same week a year ago.

With the number of ships arriving at West Coast ports from Asia down sharply due to the coronavirus, it stands to reason that railroads are beginning to feel an impact too, at least in terms of intermodal. It’s impossible to quantify that impact with precision,” said AAR Senior VP John Gray.

Intermodal Fell 7.4% in 4th Quarter of 2019

February 7, 2020

Intermodal freight volumes fell 7.4 percent in the fourth quarter 2019 the Intermodal Association of North American reported this week.

Domestic containers declined 2.7 percent to 1,958,649 units compared with the fourth quarter of 2018.

International shipments fell 9.1 percent to 2,195,684\; and trailers plunged 21.4 percent to 292,513.

“We haven’t seen full-year declines like these since the 2009 recession,” said IANA President Joni Casey in a statement. “Looser trucking capacity played a role on the domestic side of intermodal, while tariffs and tough comparisons to 2018 volumes affected international.

Casey said a rebound in traffic could be hastened by a number of factors, including further resolution to trade issues, but it’s difficult to predict that timing.

The seven highest-density trade corridors, which collectively handled 67.7 percent of total volume, were down 7.2 percent in the fourth quarter.

Two posted double-digit losses. The Midwest-Northwest corridor fell 15.8 percent and the South Central-Southwest corridor declined 13 percent.

Volumes were down 5.7 percent in the Midwest-Southwest trade corridor, 5.7 percent in  the Northeast-Midwest, 4.7 percent in Trans-Canada, 4.4 percent in the Intra-Southeast and 3.4 percent in the Southeast-Southwest.

Full-year 2019 results show that intermodal volumes fell 4.1 percent to 18,146,095 units from 2018’s levels.

Domestic containers were down 6.1 percent to 8,798,451; international shipments, down 2.2 percent to 9,347,644; and trailers, down 15 percent to 1,227,511.