Intermodal Freight Volumes Improve
This story appears in the March 1 print edition of Transport Topics.
Intermodal freight volumes showed their first year-over-year gain in 15 months during December as the U.S. economy improved, raising hopes for a resurgence, said the latest Intermodal Association of North America market report.
A separate report found that rail/truck business claimed its biggest-ever quarterly share of longhaul freight.
Intermodal freight in the fourth quarter climbed 2.5%, or 24,319 shipments, from 2008, despite year-to-year declines in October and November. Domestic container shipments rose 9% in the fourth quarter and more than 15% in December, helping the momentum, the Feb. 19 report said.
“Intermodal began to regain strength in the fourth quarter, positioning the industry for renewed 2010 growth,” the IANA report said. “December delivered the first year-over-year gain since September 2008. And early January results were promising, with volumes comfortably ahead of January 2009.”
In the fourth quarter, rail/truck freight accounted for 13.3% of the U.S. longhaul freight market, the highest percentage ever recorded, said Larry Gross, president of Gross Transportation Consulting Inc. and the main author of an intermodal report issued earlier last month by FTR Associates, Nashville, Ind. The previous high was 13% in the third quarter of last year.
For the year as a whole, intermodal volume in the international sector fell 21% and domestic intermodal volume slipped 5.8%. Rail/truck volume peaked in 2006 at 14.3 million loads and has dropped since then to 11.7 million loads last year.
In January, domestic container volume grew 11%, IANA statistics showed, amid signs that underlying demand was improving in the U.S. economy.
“Domestic containers are the high point of the story in the fourth quarter,” IANA Vice President Tom Malloy told Transport Topics, noting that those shipments reached a record level of 1.07 million in the fourth quarter. “The biggest challenge is gaining momentum in the international line of business.”
As a result of the domestic container gains and the decline in international cargo since the record year of 2006, domestic shipments now account for 48% of intermodal moves, compared with just 40% of rail/truck freight three years before, Malloy said.
One sign of that shift is an increase in intermodal’s market share for longhaul shipments moving more than 550 miles, Gross said.
The market share gain occurred, he said, because intermodal shipments in both the domestic and international portions of the business grew faster on a sequential basis than did the dry-van truckload business.
Part of the reason for the increase, Gross said, was an improving international freight market, which has been reflected in stronger container loadings of imports and exports at major ports such as Los Angeles and Long Beach, Calif.
Gross predicted that domestic intermodal, which has been gaining longhaul business for more than two years, will flourish this year as available capacity dwindles in truckload markets.
The IANA report reached the same conclusion, stating that intermodal could benefit as an improving freight market soaks up all the excess trucking capacity, estimated at about 200,000 trucks, that has been plaguing the freight industry.
“There is a good chance that the surplus of active trucks will be exhausted by the end of the summer,” the IANA report said. “The happy result for intermodal operators will be spot shortages of truck capacity during the 2010 peak season, with more widespread problems in 2011.”
