IANA reports strong Q1 2012 volumes

First quarter intermodal volumes started the year strong, according to data released by the Intermodal Association of North America (IANA).

In its quarterly Intermodal Market Trends & Statistics report, IANA reported that first quarter intermodal loadings—at 3,476,500—were up 5.8 percent annually and represent the best first quarter output for loadings ever recorded by IANA, topping the first quarter of 2007, which hit 3,408,500.

And three of the four major intermodal equipment categories tracked by IANA also showed growth. Domestic containers led the way at 1,290,139 for a 14.9 percent gain, and trailers fell 6.9 percent to 383,034. All domestic equipment was up a healthy 9.1 percent at 1,673,173, and international containers were up 2.9 percent at 1,803,327. 

Even though intermodal, particularly on the domestic side, has been strong for the past several quarters, the report’s authors said that in light of some encouraging economic signs in the first quarter, including job growth and an uptick in consumer confidence, a good amount of domestic intermodal increases are due to market share growth. What’s more, they explained that trucking capacity was tight in the first quarter and diesel prices saw steady gains throughout much of the quarter.

“We expect domestic intermodal to continue this output and be strong,” said Joni Casey, IANA president and CEO. “But now that we have had a little bit of a break in fuel prices it will be interesting to see if this type of pace for container growth is maintained, especially if diesel prices hold at the levels they have been at over the last week or so.”

Casey added that another factor to be cognizant of when assessing if domestic intermodal will show the strength it has displayed over the last seven quarters will be when peak activity occurs. In 2011, she said that the uncertain nature of when—and if—Peak Season occurs is more difficult to determine. While it traditionally occurred in October, it is now more commonly happening in August and September, she said.

And while international containers posted nearly a 3 percent improvement, IANA noted that international intermodal was up 9.6 percent in the first quarter, due to retailers replenishing inventories following a better-than-expected holiday sales season.

Intermodal Marketing Companies mostly saw strong annual percentage gains in the first quarter, with intermodal loads—at 303,551—up 10.8 percent, highway loads down 4.2 percent at 136,771, and total loads up 5.7 percent at 440,322.

Intermodal Marketing Company (IMC) intermodal and highway revenue for the first quarter—at $793,887,024 and $200,849,658—were up 18.5 percent and 2.3 percent, respectively. Total revenue—at $994,736,682—was up 14.8 percent. Average revenue per intermodal load—at $2,615—was up 6.9 percent and average revenue per highway load—at $1,469—was up 6.8 percent.

IANA said that the first quarter marked the first quarter of double-digit intermodal gains since the third quarter of 2010, gaining efficiencies from high fuel prices, improving service, trucking challenges, and recovering freight demand.

Regarding the decline in IMC highway loads, Casey said that reflects the current truckload market and the report pointed out that it is likely warm weather winter conditions and an early Easter tightened available truckload capacity and in turn limited supply available to IMC brokerage operations.

“With the issues occurring over the road, when it comes to capacity, regulations, and the driver shortage, that create uncertainty for shippers, I feel while we are still seeing them, it is likely intermodal will continue its growth rate,” said Casey. “We need as much total capacity to carry freight, because international will start to come back and already is. I think there will be enough freight for everybody. Intermodal capacity is still available and is picking up. And smaller truckload carriers are also looking at it as an option, too.”

A research report from Stifel Nicolaus published in September 2011 noted that domestic international has grown to be nearly as large as the international segment, adding that after 30-to-40 years, domestic intermodal service has finally reached the level which allows it to be viewed by shippers as a mainstream service.