Intermodal shipping: IANA reports strong first quarter intermodal volumes

While other modes of freight transportation have seen their fair share of ups and downs, intermodal continues to be an exception to a large degree, showing relatively strong volume gains on a consistent basis. This rings true again, based on the most recent results of the first quarter Market Trends report published by the Intermodal Association of North America (IANA).

First quarter intermodal loadings—3,292,291—were up 9.0 percent annually, as were the four major intermodal equipment categories tracked by IANA. Domestic containers—at 1,124,769—were up 8.8 percent. Intermodal containers—at 1,755,301—were up 9.6 percent, marking the fourth time since the second half of 2006 that international containers outpaced domestic containers. All domestic equipment—at 1,536,990—was up 8.4 percent, and trailers—at 412,221—saw a 7.5 percent gain.

While increasing fuel prices are serving as a driver for increased intermodal usage on the domestic side, international again paced all categories, as it was up for the fifth straight quarter. IANA officials cited various factors for international intermodal strength, including continued strength in import sales, with improving retail sales and consumer spending.

They added that quarterly retail sales were up 8.1 percent annually, which saw retailers draw down inventory faster and pushing inventory/sales ratios to record lows. And IANA said that these low inventory levels forced shippers to accumulate more goods, which, in turn, drove strong shipment levels.

IANA Vice President of Member Communications Tom Malloy said that while it is encouraging all equipment categories showed growth, the reason for it may actually be a combination of things, especially on the domestic side.

“Domestic containers are up, which is always good news,” said Malloy. “But trailers being up are another interesting dynamic in that is that because domestic is up overall or is it because there are tight supplies of 53-foot containers and that is what’s moving trailers up? Or is it new over-the-highway business driven by high energy costs? Depending on the lane and duration of haul, I think it is a bit of all of that.”

And while intermodal continues to impress, Malloy is keeping a close eye on it, as its first quarter volumes could be a byproduct of shippers moving freight earlier, coupled with supply chain managers possibly gaining some confidence due to the slow, gradual economic recovery.

IMC Performance: Intermodal Marketing Companies largely saw decent percentage gains on an annual basis in the first quarter, with intermodal loads—at 274,984—up 6.9 percent, highway loads up 0.8 percent at 142,785, and total loads up 4.7 percent at 417,769.

IMC intermodal and highway revenue for the first quarter—at $672,185,288 and $196,404,045—were up 16.2 percent and 9.5 percent, respectively. Total revenue—at $868,589,333—was up 14.6 percent. Average revenue per intermodal load—at $2,339—was up 1.3 percent and average revenue per highway load—at $2,444—was up 8.8 percent, and average revenue per highway load—at $1,376—was up 8.6 percent.

Even though IMC revenue was solid, Malloy pointed that fuel surcharges are factored into revenues, which increase when fuel goes up. Intermodal revenues are not net of fuel surcharges, and Malloy said there were price increases issued by IMCs for both highway and intermodal.

“Volumes are up and revenues are up, but when we look at total loads being up only 4.7 percent compared to the intermodal industry average of 8.4 percent, it is a little bit less,” said Malloy. “What that is telling me is that the IMC market is doing a good job of holding market share and creating value. And between international and domestic, the truckload providers are where the difference is in volumes. The highway revenue side of IMCs is explained by capacity and fuel, and that is why average revenue for both highway and intermodal loads is up more than 8 percent each.”

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