Intermodal volume declines continue in November, reports IANA

Keeping in line with previous months, November intermodal volumes were largely down, according to data provided to LM by the Intermodal Association of North America (IANA).

Total November volume—at 1,390,155 units—was down 2.5% annually. Trailers—at 68,551—fell 30.8%, falling short of October’s 30.1% annual decline. Domestic containers—at 656,847—were off 3.6%. And all domestic equipment, which is comprised of trailers and domestic containers, fell 7.1%, to 725,398. ISO, or international containers, was the lone segment to see an annual gain, rising 3.1%, to 664,757.

Through the first 11 months of 2022, IANA reported that total intermodal volume—at 16,391324—is down 3.6% compared to the same period a year ago. Trailers—at 846,185—decreased 23.3%, and domestic containers—at 7,514,837—were up 2.5%. All domestic equipment—at 8,361,022—fell 0.9%. ISO containers were down 6.2%, to 8,030,302.

In its recently issued “Intermodal Quarterly Report,” IANA observed that total third quarter intermodal volume—at 4,535,835 units—fell 1.0% annually. A bulk of the decline was due to a 27.7% annual decline, for the trailers segment, to 209,061, its lowest level on record. Domestic containers—at 2,012,662—saw a 1.5% annual increase, and all domestic equipment (comprised of trailers and domestic containers)—at 2,221,723—saw a 2.2% annual decline. ISO, or international, containers eked out a 0.1% annual increase, to 2,314,112.

The 1.0% third quarter annual decrease was preceded by a 9.8% fourth quarter 2021 annual decline, a 6.6% first quarter decline, and a 4.3% second quarter decline. The report explained that with the annual decrease down roughly 48,000 units, it “represents less than one day’s volume,” adding that “external factors impacting intermodal traffic were a potential rail strike and Hurricane Ian.”

While intermodal volumes were down annually for the fifth consecutive quarter, IANA noted that it represented the smallest decline over that period.

“Intermodal volume surged after the worse of the pandemic in the third quarter of 2020 with strong network throughput supporting increased consumer demand for goods,” the report observed. “The growth overwhelmed the intermodal supply chain, and volume began to drop during the third quarter of 2021. Weaker volumes have been experienced ever since.”

IANA President & CEO Joni Casey told LM that based on third quarter volumes, it certainly seems as if capacity and fluidity are returning to the intermodal network.

“Quarterly volumes are still relatively muted, so it’s hard to tell if this will become the new norm especially given the lack of definitive peak season numbers,” she said.

Larry Gross, president of Gross Transportation Consulting, said at last month’s RailTrends conference that the ongoing decline in domestic volume going back to March, when looking back at calendar year 2022, will be viewed as the real Peak Season month for intermodal, in terms of the highest level of intermodal activity for the year.

“We are seeing a pretty steady decline in intermodal domestic volume, this is not a capacity issue anymore,” he said. “This is a market demand issue that we are seeing right now.”

While there is an ongoing domestic intermodal decline, Gross explained that IPI (inland point intermodal), or international volume had a huge drop around this time last year, “when the ocean carriers turned off their business and then…turned it back on when they got to February and March,” because there was enough volume and improvement to allow the equipment to start venturing inland again.

That situation, he said, will lead to some significant year-over-year volume improvements, for the fourth quarter, with the caveat that those numbers are much more about what happened last year as opposed to what is happening now.

At the moment, Gross said that the only real area of intermodal growth is in the domestic private container arena, for companies like J.B. Hunt, and Schneider National, among others, more so than railroad domestic containers, which he said is largely offsetting the growth being seen on the domestic private container side.

“There is very little growth year-to-date, in terms of total domestic [volume],” he said. “It is up only a fraction of a point. So, all of this growth we are seeing among the publicly-traded intermodal carriers, is really, it appears to me, a market share shift that is occurring, and we are not growing the size of the volume, at least not this year.”

Looking at intermodal import and export activity, Gross said roughly 60% of what happens on an intermodal basis in North America is directly driven by import and export volume, with a longstanding intermodal theme being a huge gap between the export volumes coming out of North America and the import volumes that are arriving.