Trailer growth spurs first quarter intermodal volumes, reports IANA

First quarter intermodal volumes showed growth in spite of challenging winter weather conditions, according to the Intermodal Market Trends & Statistics Report released by the Intermodal Association of North America (IANA).

Total intermodal volume movements—at 3,777,454—were up 2.6 percent compared to the first quarter of 2013. But unlike the previous six quarters, first quarter growth came with a twist: trailers’ growth rate at 7.5 percent and 413,064 trailers topped domestic containers, which grew 3.2 percent annually at 1,473,124.

Domestic containers, said IANA, have been historically impressive over the years, with an 8-year cumulative average increase of 8.6 percent between 2005-2013, including the 2009 economic downturn, and the first quarter’s 3.2 percent annual gain is the lowest growth rate since 2009.

IANA pointed out that in many parts of North America “the weather deterred a good amount of economic activity; employment, retail sales, and many other economic indicators struggled throughout the first several months of the year potentially holding down the growth of domestic container volumes.”

Conversely, this led to increased trailer activity, with IANA explaining that the weather may have also played a major role in the outsized growth in trailer shipments, with the possibility that overall transportation network congestion made it more difficult to secure equipment, forcing shippers to put into service whatever was available. Trailer usage grew 15 percent and 24 percent, respectively, in the Northeast and Eastern Canada. 

IANA President and CEO Joni Casey echoed that sentiment, telling LM that the prolonged bad weather, especially early in the first quarter, forced over the road traffic to the rails and added that the online holiday shipment surge at end of last year required additional capacity to handle and that new intermodal shippers using were using available equipment like trailers in part due to weather.

“It also may be a factor of comparisons to previous years,” said Casey. “The trailer numbers for the third and fourth quarters of 2013 were up compared to the third and fourth quarters of 2012 but were not as high as the third and fourth quarters of 2011. And the first quarter of 2013 and first quarter of 2014 trailer numbers are still less than the third quarter and fourth quarter of 2011. The thought is that it will take another two months, give or take, to see if the trend in trailers will hold.”

On the international side, ISO containers saw modest growth at 1.1 percent or 1,891,266 containers, but IANA said it is premature to jump to conclusions about this low growth level, as there was a high level of variation in volumes in the first quarter, with international volumes declining in the first two months of the year, but were up 8.5 percent annually in March at 634,685 shipments.

Casey cited various factors that could have impacted first quarter intermodal output, including: the timing of the Lunar New Year contributing to lower January and February volumes; a bounce in shipments to restock inventories depleted from the holidays; and advance shipments in anticipation of West Coast labor issues.

IMC (Intermodal Marketing Company) intermodal and highway revenue for the first quarter—at $898,331,723 and $270,607,397—were up 9.0 percent and 8.3 percent, respectively. Total revenue—at $1,168,939,119—was up 8.9 percent. Average revenue per intermodal load—at $2,637—was up 1.3 percent and average revenue per highway load—at $2,835—was up 7.4 percent, and average revenue per highway load—at $1,663—was up 15.2 percent.

Total first quarter IMC loads—at 482,583—were down 1.2 percent, with intermodal loads up 1.5 percent at 316,870 and highway loads down 5.9 percent at 165,713.

IANA said in the report that the weather played a role in IMC metrics, with total volume down annually for the first time since the third quarter of 2009, while improved average revenue, which was probably aided by tighter capacity, resulted in strong overall revenue growth for IMCs.