Intermodal volumes up nearly 5 percent in Q3, according to IANA report

Third quarter intermodal volumes showed decent growth, according to the most recent edition of the Market Trends & Statistics report by the Intermodal Association of North America (IANA).

Total intermodal container and trailer movements in the third quarter were up a cumulative 4.7 percent at 4,010,582.

As has been the case for several quarters running, domestic containers showed the highest growth rate, increasing 9.4 percent annually to 1,557,084. This was ahead of the second quarter’s 9.0 percent annual increase and shy of the first quarter’s 10.2 percent gain. 

IANA reported that trailers in the third quarter rose 1.2 percent to 411,659, while international containers headed up 2.0 percent to 2,041,839.

The report observed that intermodal activity regained some momentum after a “dicey” second quarter, with the domestic market continuing to deliver steady growth, while international went from a second quarter decline to modest third quarter growth, even though international remains impacted by economic uncertainty driving recent volatility

Even though total third quarter volume saw a nearly 5 percent uptick, IANA said it represents the slowest year-to-date third quarter growth since the economic recovery commenced in 2009, adding that intermodal shipments have seen growth since 2009 albeit at a diminishing pace.

IANA President and CEO Joni Casey told LM that the third quarter represents “more of the same,” with intermodal continuing to provide: more consistent, economical service; conversions from highway based on pricing differentials; shippers already using intermodal increasing their spend; transloading volumes; and small growth contribution of intermodal trailers. 

Casey added that it is still too early to tell if the Federal Motor Carrier Safety Administration’s new hours-of-services regulations are driving more freight to intermodal.  But that could change in the coming quarters, with industry estimates pegging the total loss of trucking capacity and production at 2-to-3 percent since July 1, when the new HOS rules took effect.

The report’s domestic data highlights the fact that domestic intermodal has been on a strong growth track due to things like lower fuel cost and improving service, as well as major investments into rail networks, spurring the thesis that that intermodal is taking share from over the road trucking and will continue to be an area of secular growth for railroads.

But while the growth rates are impressive, industry experts maintain that these strong domestic container intermodal volumes are due in large part to freight coming out of intermodal trailers into trailers or from one box to another, coupled with the fact that the gross number of intermodal loadings—both domestic and container—were higher in 2006 than in 2012 as was gross GDP and industrial production. What’s more, during that same period the number of truckloads moved and truck tonnage volume is larger than intermodal.

With the third quarter year-to-date growth rate the slowest since 2009, Casey said that is not enough at this point to lead to cause for concern, considering that “comparisons to 2010, 2011 and 2012 are tough since those periods saw unprecedented gains.  We are in a consistent, steady growth mode which is expected to continue for the foreseeable future.”

When asked about the volatility of the international market, Casey noted international volumes are definitely impacting overall numbers, but when looking at the monthly numbers for international in the third quarter—July at 678,092, August at 699,902, and September at 664,987—it had what she called a “roller coaster” effect, which evened out to record overall quarterly growth.  

IMC (Intermodal Marketing Company) intermodal and highway revenue for the third quarter—at $941,560,435 and $270,003,083—were up 9.5 percent and 6.5 percent, respectively. Total revenue—at $1,211,563,518—was up 8.9 percent. Average revenue per intermodal load—at $2,765—was up 4.0 percent and average revenue per highway load—at $1,433—was flat.

Total third quarter IMC loads—at 528,949—were up 5.7 percent, with intermodal loads up 5.3 percent at 340,583 and highway loads up 6.5 percent at 188,366. IMC highway volumes, from a growth percentage perspective, topped IMC intermodal volumes for the second time in five years, with the second quarter of this year being the first time.

IMC growth, according to the report, is growing much more rapidly than the broader economy, with both segments seeing solid annual gains reflecting normal seasonal patterns and intermodal’s quarter-to-quarter gains topping highway, which IANA said likely reflects intermodal’s heavier reliance on imported freight that typically peaks in August.