Intermodal volumes fall in October while showing improvement, reports IANA

Intermodal volumes fell again in October, while continuing to show sequential improvement, according to data provided to LM by the Intermodal Association of North America (IANA).

Total October volume, at 1,515,201 units, fell a mere 0.4% annually, continuing a trend of slimming sequential declines, following 4.0%, 7.5% and 9.8% annual declines, in September, August and July, respectively.

Domestic containers were again the lone intermodal segment to see an increase, rising 6.4% annually, to 745,500 units, topping September’s 5.0% annual gain. Trailers fell 22.0%, to 53,614, in line with September’s 22.1% annual decrease. All domestic equipment, which is comprised of trailers and domestic containers, was up 3.9%, to 799,114. ISO, or international, containers, at 716,087, were down 4.9% annually.  

On a year-to-date basis through October, total intermodal units, at 13,817,241 units, were off 7.9% annually. Domestic containers were down 2.5% annually, to 6,685,638, and trailers fell 24.2% annually, to 589,770. All domestic equipment totaled 7,275,408 for a 4.7% decline. ISO containers were off 11.2%, to 6,541,833.

In its “Intermodal Quarterly” report released last month, IANA explained that the intermodal sector faces a number of headwinds, in the form of import levels and inventory rebuilding remaining sluggish amid the overall strong performance of the economy. And it added that key sectors like housing and manufacturing continue to “show muted activity.”

What’s more, it added that truckers have reduced rates in an effort to attract shippers and gain a larger share of a shrinking freight market—in turn having a negative impact on intermodal. IANA also pointed to how inflation-adjusted inventories, not including automotive, are around 13% higher than pre-pandemic peaks. Which it said plays a key role in the decreased demand for freight, as retailers and warehouses sit on out-of-season product, as well as overbought, pandemic-related items.

Looking ahead, IANA said that while the broader economy is expected to remain on solid footing for the remainder of 2023, it expects the freight outlook to be weaker, due to what it called the sluggishness of freight-related components of the economy

IANA said it expects ISO containers moving by rail to be down 11.3% for all of 2023, domestic containers to be down 2.0%, and trailer loads to fall by 24.9%—for a projected full-year 2023 7.7% annual volume decline.

In a recent interview with LM, IANA President & CEO Joni Casey explained that competition from motor carriers continues to have significant impact on intermodal volumes in the third quarter, but she said that comes with the caveat that trucking's operational costs are rising, which can open the door for increased domestic intermodal activity. 

When asked about intermodal impact should the current inventory situation improve, Casey said: “Lower inventories reflect higher consumption, which would translate into growth in international intermodal traffic, as restocking occurs. This, in turn, should stimulate transloads as goods are moved inland, especially if OTR capacity starts to tighten.”

As for intermodal expectations for the fourth quarter, Casey said that the fourth quarter is likely to mirror what has been happening in the third quarter, with very modest upticks in intermodal loads compared to the same period in 2022.

“We are looking towards 2024 for a larger turnaround in intermodal volumes,” she said.