Intermodal volume declines for second straight quarter, reports IANA

Intermodal volumes were nearly down across the board in the second quarter, according to the most recent edition of the Intermodal Market Trends & Statistics report issued this week by the Intermodal Association of North America (IANA).

Total volume–at 4,559065-was down 3.8% annually, marking the second straight quarter of annual declines after a lengthy stretch of gains going back to the third quarter of 2016. The first quarter of 2019 was down 1.5% annually, following 4.7% and 4.2% annual gains from the third and fourth quarters of 2018, respectively.

Trailers-at 302,138-fell 15.4%, for the largest annual decline, and domestic containers-at 1,875,011-were down 6.3%. All domestic equipment fell 7.7% to 2,177,149. ISO, or international containers, was the lone category to not see an annual decline, but it did not see an increase either, as it was flat at 2,381,916.

IANA noted that the second quarter declines were a continuation of the first quarter, with loose trucking capacity and softer prices compared to a robust 2018, which it said created more intense competition with intermodal than a year ago and resulted in major domestic intermodal traffic declines. And it also noted that the ongoing tariff-related issues intensified throughout the quarter, with slowing international volumes, coupled with container imports, notably on the West Coast, facing challenges.

While total quarterly volume was down 3.8%, it began on solid footing, with a 6% increase in April but that was followed by two months of decreases.

As for the 15.4% decline in trailers, IANA said that the there was a sharp acceleration in decreases from the first quarter to the second quarter, adding that this may mark “a return to normal after last year’s surge.”

On the domestic containers side, it observed that highway competition is having an effect, with part of that due to broader economic concerns, as well as the economy in the second quarter paling to 2018, and rail losing market share to trucking, with tight trucking capacity and rates down significantly going back to 2018, leading the charge in share shift.

Addressing domestic intermodal, IANA President and CEO Joni Casey said in an interview that there was an expectation that volumes would have recovered more to this point.  

“Most of the issues that impacted these volumes were ‘one-offs’ – weather, flooding, network adjustments, and inventory pull downs,” she said.  “Trucking capacity is cyclical and should start to tighten again by Q4.  A lot depends on economic ups and downs and ongoing trade policy decisions.”

As for tariffs and trade tension, she observed that they impacted import and export levels, as evidenced by the pull-forward volumes from the fourth quarter of 2018.

When asked what factors stand out the most in intermodal when compared to a year ago, Casey cited various factors.

“There has been less consistency and more anomalies,” she said. “Again, economic factors, trade policy juggling, weather and increased intermodal network adjustments.  You also have to factor in the issue of comparisons to the same time last year.”