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May 15, 2017 3:30 AM, EDT

Intermodal Volume Up 2% in First Quarter, IANA Reports

Nick Ut

This story appears in the May 15 print edition of Transport Topics.

Intermodal traffic rose 2% in the first quarter, largely stemming from container and trailer volumes, a signal that a rebound is underway from the doldrums of 2016.

The Intermodal Association of North America found that year-over-year international container volume grew 2.9% to 2.14 million units, and domestic traffic increased 1.3% to 1.79 million.

Trailer-on-rail traffic recovered with a slight 0.3% increase to 310,393 units, ending nine consecutive quarters of contraction. The business struggled last year after Norfolk Southern Corp. restructured its Triple Crown Services subsidiary in 2015.

Loadings of 40- or 45-foot trailers jumped 12.6% to 26,567 units, but 48- and 53-foot trailers dropped 3% to 223,493.

“What’s most impressive about the growth rate is that it comes on the heels of a 2% gain in shipments in the [first quarter] of 2016. This suggests that the increase was real growth and not just a bounce back due to weaker comparisons,” the report said.

Most intermodal carriers were pleased to see first-quarter data to validate the recovery in conditions.

Paper Transport Inc., based near Green Bay, Wis., reported that revenue grew by a double-digit percentage for the period versus last year. The intermodal marketing company and drayage provider owns 700 trucks and provides door-to-door service.

“We’re seeing new customers and receiving more volume from current customers,” said Jeff Shefchik, vice president of business development. “I’d say though that this year, even though we’re doing very well from a volume perspective, it’s not easy because there’s a lot of price pressure coming from the trucking community.”

DRT Transportation, a Lebanon, Pa.-based company, saw intermodal business grow 22% year-over-year in the first quarter. The intermodal 3PL and marketing company offers trailer-on-flatcar service.

“We’ve gained some business left behind from the Triple Crown service at Norfolk Southern. Our private- asset trailer side of the business grew 50% in trailer capacity in one year because of the available opportunities,” DRT Transportation President Robert Kemp said.

“We’ve seen more demand from the Midwest to the East Coast, which is our sweet spot,” he added. IANA reported volume in that corridor increased 1.7% year-over-year.

The highest growth was 7.4% in Canadian shipments. U.S. intermodal traffic declined 1.3% between the West Coast and south Central, but improved 6.2% between the Southeast and West Coast.

Knichel Logistics, an intermodal marketing company in Gibsonia, Pa., saw April volumes rise 4% versus a year ago after similar first-quarter growth.

“We’re seeing a lot of new opportunities this year that we weren’t seeing previously,” President Kristy Knichel said. “Some of our new business is being taken from the asset-based carriers. Some shippers aren’t receiving great customer service from the big guys, and so they’re prioritizing the issue as much as rates.”

Executive Vice President William “JR” Knichel pointed out that shippers understand that the truckload market will tighten with the electronic logging device mandate, so some are hedging against the risk with intermodal.

“What we’ve been seeing on the [requests for proposals] for the last couple months are customers that are more open to looking at intermodal knowing that truck pricing might go up later this year in lanes that could go on truck or rail,” he said.

However, other trucking executives were more uncertain and cautious about intermodal conditions.

Eagle Systems Inc. CEO Jeff Lang told Transport Topics that intermodal ramps at the Port of Virginia and Chambersburg and Harrisburg, Pa., were busy, but Chicago was quieter than normal. The East Wenatchee, Wash.-based company owns 360 trucks and operates in 22 markets.

“I’m taking a wait-and-see approach right now,” Lang said. “I know the truckload guys are seeing some less than desirable numbers, so I’m concerned about what the overall freight volumes are and what percentage of that will be pushed into the intermodal network.”

Randy Guillot, president of Triple G Express Inc. in New Orleans, characterized the Gulf Coast market as slow. His company mostly provides drayage service at the Port of New Orleans but also hauls from intermodal facilities in New Orleans, Mobile, Ala., and Memphis, Tenn.

“I think we’re at a similar level as last year. I don’t think it’s been any more robust or less robust for us,” Guillot said. “I’d say we were soft in 2016 and through the first quarter. We’re looking forward to the second half of the year when we think conditions will be better.”

IANA found that volume receded 1.4% within the Southeast. Domestic container traffic fell 6.5% year-over-year, and international traffic, which accounts for a majority of business, eked out a 0.5% gain.

However, nationwide, IANA is more optimistic and forecasts loadings will grow 2.5% to 3.5% in 2017.