April intermodal volumes see slight annual gain, reports IANA

Intermodal volumes remained largely down in April, while eking out a slight annual gain, according to data recently provided to LM by Intermodal Association of North America (IANA).

Total April volume, at 1,506,210, was up 0.2% annually. Trailers again saw the steepest decline, falling 13% to 102,349, following March’s 12.1% annual decline. Domestic containers, at 614.225, slipped 4%, and all domestic equipment, at 716,574, decreased 5.4%. International, or ISO, containers were the lone segment to see a gain, with a 6% annual increase to 789,636.   

On a year-to-date basis, total intermodal volume, at 5,983,960, was down 1.1% annually. Trailers, at 438,576, were down 7.3%, and domestic containers, at 2,436,163, fell 4.1%. All domestic equipment, at 2,874,739, was down 4.6%. ISO containers again was the lone segment to seen an annual gain, up 2.4% to 3,109,221.

In its recently released first quarter Market Trends & Statistics Report, IANA said that the trailer and domestic container declines are a byproduct of truck capacity being very tight during the first quarter of 2018 and then loosening over the first quarter, making trucking, in turn, competitive compared to the freight railroad sector. What’s more, IANA noted that domestic intermodal faced challenges in the first quarter, due to rail service changes such as converting steel-wheel interchanges to rubber-wheel interchanges, as well as changes in schedules and the elimination of some lanes, too.

IANA President and CEO Joni Casey told LM that the drop-off in the pull-forward U.S.-bound imports, looser over-the-road trucking capacity, and railroad service adjustments, in addition to strong 2018 annual comparisons all factored into the first quarter volume decline.

In regards to the changes in rail service impacting domestic volumes potentially serving as a factor going forward, she said it should be temporary and a positive for intermodal in the longer run.

Casey said that the slight first quarter growth level for ISO container volumes does not serve as a cause for concern, despite the fairly strong start to the year.

“The timing of the Lunar New Year came into play, and the first quarter of the year is usually an adjustment period,” she said.

Looking ahead to the rest of 2019, IANA’s report indicated ISO volumes are expected to see improvements over the next few quarters, with gains pegged to be on the 3%-to-4% range. This could be spurred on by things like trade agreements and changes in steamship fuel regulations. But it cautioned that could reduce the share of East Asia containers going to East Coast ports, and if volumes head back to the West Coast, a significantly larger share would move by rail. What’s more, the trade war and continued gains in all-water share could hinder international growth.

Domestic volumes are pegged to rebound in the near-term, too, said IANA, adding that first quarter declines for trailers and domestic containers slowed heavily in the first quarter for their first respective annual declines going back to the freight recession, as well as the largest declines since the Great Recession. IANA said domestic containers are expected to rise 3%-to-4% over the remainder of 2019, with trailers tougher to predict, as a lot of trailer activity stems from the “railroads’ decision to serve trailers, as well as shippers’ decisions to acquire trailers to replace containers.”

Total 2019 growth is expected to increase in the 2%-to-3% range in 2019, according to IANA.