IANA reports continued uptick in intermodal volumes for the second quarter

The positive momentum for intermodal transportation, which gained momentum during the first quarter of the year, continued on a steady track in the second quarter, according to the most recent Market Trends report from the Intermodal Association of North America (IANA).

In the report, IANA stated that second quarter intermodal loadings—at 2,829,971—were up 17.2 percent year-over-year but fell short of the first quarter’s 3,019,310.

All four of the major intermodal categories IANA tracks were up year-over-year. Domestic containers at 1,128,108 were up 16.4 percent. All domestic equipment at 1,534,188 was up 13.2 percent. International containers at 1,782,594 were up 20.9 percent (marking the first time since the second half of 2006 that international topped domestic containers), and trailers at 406,080 were up 5.0 percent. Trailers have been down 19 of the last 22 quarters.

“These results are in line with the first quarter, with domestic intermodal being an outstanding performer for the last three years and it continues to do well,” said IANA Vice President of Member Services Tom Malloy in an interview. “Movements within North America and movements for domestic containers are both driven by more truckers using intermodal service and a greater percentage of transloading of international freight coming in through west coast port into 53-foot trucks, with the empty steamship [containers] going to Asia and China for another head-haul into the U.S. That is what is driving domestic container growth, and it has been really consistent.”

And the report points out that while shipments of domestic containers grew at a slower pace than international containers, the second quarter was the twentieth consecutive quarter of growth for the big boxes. Not only did domestic container shipments receive a boost from the economic recovery, according to Market Trends, there is also evidence that rail has gained share from trucks. This trend should carry on, and domestic container shipment growth should continue to outpace overall economic growth, said IANA.

The resurgence in international intermodal growth, said Malloy, is starting to come back for many reasons, amidst many conflicting reports on economic growth, regarding things like consumer spending and trade growth.

“I am seeing this growth as being methodical and measured and that is being borne out in the numbers we are seeing for the first half of the year,” said Malloy. “Supply chain managers are optimistic about carrying a little more inventory. It may be driven by more than inventory replenishment, which is not just conservative inventory replenishment, but it may be optimistic in anticipation of consumers’ spending money they have been saving at record-high levels around the holidays. Things are shifting around. It may not be as much on household items as on consumer-related items.”

IMC performance: Intermodal Marketing Companies saw percentage gains on an annual basis in the second quarter, with intermodal loads at 294,576 up 19.9 percent, and total loads, including highway, at 452,486. Highway loads—at 157,919—were up 0.7 percent year-over-year. Intermodal and highway revenue at $666,883,317 and $205,537,405 were up 16.2 percent and 14.1 percent, respectively. Average revenue per intermodal load at $2,264 was up 0.7 percent, and average per highway load at $1,302 was up 2.0 percent.

While domestic container volumes are rising, Malloy said that IMCs are not driving volumes attributed to larger, high-profile truckers doing intermodal that do not use IMCs.

“This is sales towards actual shippers, whether they are moving between retail centers or store deliveries or distribution centers from warehouses,” he said. “IMCs are on a great run, whether it is conversion traffic or taking advantage of new traffic lanes. I believe there is a strong sense of the environmental impact driving the numbers of shippers using intermodal as a green solution for supply chain managers turning to intermodal, and IMCs have been the direct beneficiary of the environmental sensibilities associated with transportation.”

Stifel Nicolaus analyst John Larkin wrote in a research note that the growth in intermodal loads should grow at a faster rate than loads hauled over the highway
as fuel prices likely increase, highways become increasingly congested, the North American rails make further investments to intermodal corridors and terminals, and federal and local governments provide a portion of the funding for certain intermodal infrastructure projects, among other factors.