Intermodal Volume Down Sharply in 1st Quarter

North American intermodal traffic fell sharply in the first quarter of 2023 the Intermodal Association of North America reported this week.

Intermodal volume fell 8.6 percent to 3.9 million containers and trailers when compared with the same period of 2022.

IANA said all segments posted declines. The number of domestic containers fell 5.8 percent to 1.9 million; international containers dropped 8.8 percent to 1.8 million; and trailers fell 28.8 percent to 191,941.

“Falling consumer demand for goods and related import declines have impacted intermodal volumes,” said IANA CEO Joni Casey in a news release. “Conversely, network fluidity and equipment availability continue to recover, so we are well positioned for growth over the ensuing months.”

Intermodal Volume Fell 3.6% in 4th Quarter

Intermodal volume fell 3.6 percent to 4,237,305 containers and trailers in the fourth quarter of 2022 the Intermodal Association of North America reported recently.

The figures are based on a comparison to the fourth quarter of 2021.

IANA said domestic containers fell 4.2 percent to 1,989,566 while trailers decreased 29.7 percent to 215,372. International containers increased 0.9 percent to 2,032,367.

Total volume for 2022 showed a 3.9 percent decrease to 17,716,445 containers and trailers compared with the previous year’s total.

IANA President Joni Casey said all four quarters of 2022 posted negative output.

“The industry continues to address equipment availability, facility capacity and service with the goal of turning things around in 2023,” Casey said.

Intermodal Volume Down 1%in 3rd Quarter

The Intermodal Association of North America said this week that during the third quarter intermodal volume fell 1.0 percent compared with the same period of 2021.

IANA said intermodal trailer traffic for the third quarter was down 27.7 percent, but domestic containers and international containers were up 1.5 percent and 0.1 percent, respectively.

The seven highest-density trade corridors handled more than 60 percent of intermodal volume.

The Trans-Canada corridor and Midwest-Southwest corridor saw volume increase by 6.1 percent and 1.7 percent, respectively.

But Midwest-Northwest volume fell 14.7 percent decline. The South Central-Southwest and the Southeast-Southwest volume wad down 3.9 percent, Intra-Southeast fell by 8.5 percent, and the Northeast-Midwest dipped by 0.5 percent.

“The positive numbers for domestic and international containers are an indication of increasing network fluidity and reduction in congestion,” IANA President and CEO Joni Casey said. In a statement Casey said additional gains in the fourth quarter are expected to offset some of the losses experienced during the first half of 2022.

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

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

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

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

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

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

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

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.”