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Despite May volume dip, IANA remains bullish on future intermodal growth

Even with a bit of a lull in overall growth in May, intermodal volumes remain in a decent place, according to data from the Intermodal Association of North America (IANA).

By ·
{scmr_abstract}
By ·

Even with a bit of a lull in overall growth in May, intermodal volumes remain in a decent place, according to data from the Intermodal Association of North America (IANA).

For the month of May, IANA reported that total intermodal volume–at 1,445,442 containers and trailers-was up 1.7 percent annually.

That annual growth occurred, even with annual declines for various key metrics, including: trailers down 5.0 percent at 133,229; domestic containers down 0.3 percent at 558,873, and all domestic equipment down 1.3 percent at 687,102.  Showing annual growth was international, also referred to as ISO, containers, which were up 4.5 percent at 758,340.

On a year-to-date basis through May, the numbers show better signs, with trailers the only blemish, down 3.2 percent at 671,008. Domestic containers, which have led the intermodal pack over the last several quarters, were up 5.7 percent at 2,713,590, and all domestic equipment was up 3.8 percent at 3,384,598. ISO containers showed a 2.8 percent annual gain at 3,415,702. 

IANA President and CEO Joni Casey told LM that while things look like they have been slowing down, intermodal volume is still growing overall, albeit at a lower rate. 

“The market mix changed in April, with the international shipments eclipsing the domestic volumes and this held for May,” she explained. “I wouldn’t read too much into this since it took several months for the backlogs due to West Coast congestion to unwind.  Some are also attributing the growth in the international volumes to a return to shipping through the Southern California Ports vs. diverting to the East or Gulf coast.  Lastly, when you do year-over-year comparisons, numbers can skew if the preceding year had higher volumes than anticipated, as was the case in 2014.

IANA’s top executive said she remains “bullish” on intermodal, including truck-to-rail conversions, despite some temporary softness, especially since the economy seems to show signs of picking up.

Avondale Partners analyst Donald Broughton commented in a research note that his firm believe the decline in May is largely due to subdued diesel prices which makes truckload delivery much more cost efficient to shippers, especially in shorter lengths of haul.

“With diesel continuing to stay under $3.00 the breakeven point for switching is now at or above 700 miles in most lanes of transit,” he wrote. “As a result, we expect continued conversions to TL and continued YoY declines.”


About the Author

Jeff Berman, Group News Editor
Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. Contact Jeff Berman

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