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International growth paces Q2 intermodal volumes, reports IANA

Total intermodal volume movements—at 4,173,329—were up 8.2 percent compared to the second quarter of 2014. IANA said this strong output stands as the highest quarterly intermodal growth rate since early 2011. And through the first two quarters of 2015, total intermodal volumes––at 7,950,783––were up 5.5 percent compared to the midpoint of 2014 and matching up with the 5.8 percent annual gain recorded during the second half of 2014.

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Intermodal volumes in the second quarter improved with the weather, according to the Intermodal Market Trends & Statistics Report released by the Intermodal Association of North America (IANA).

Total intermodal volume movements—at 4,173,329—were up 8.2 percent compared to the second quarter of 2014. IANA said this strong output stands as the highest quarterly intermodal growth rate since early 2011. And through the first two quarters of 2015, total intermodal volumes––at 7,950,783––were up 5.5 percent compared to the midpoint of 2014 and matching up with the 5.8 percent annual gain recorded during the second half of 2014.

Unlike many recent quarters, which have seen domestic containers pacing intermodal growth. International containers led the way in the second quarter, up 9.6 percent at 2,126,170. In the report IANA observed that an improving economy is partially responsible for the strong international performance, as well as solid volumes at the Port of Los Angeles and the Port of Long Beach, whose imports were cumulatively up 9.8 percent annually in the second quarter. And it added that it is possible that shippers have accelerated imports given potential West Coast labor issues, which could lessen international volumes in the third quarter.

IANA President and CEO Joni Casey told LM that in the first quarter the winter weather held down volumes, with the comparison to the second quarter showing higher than expected gains, along with a stronger United States economy bolstering more consumer spending, coupled with the housing market showing continued signs of strength.

Domestic containers were up 7.6 percent at 1,632,802, and trailers, which led first quarter intermodal growth, were up 4.3 percent at 414,357.

In the report, IANA said that the growth rate for domestic intermodal appears to be slowing as railroads grabbed a bigger share from the highway and trailer to container conversion stalled. It also pointed out that the domestic container growth rate pales compared to a little more than a year ago, when its growth rate was in the double-digits, adding that the second quarter was impressive compared to the first quarter’s 3.2 percent annual growth rate albeit slower when compared to past years.

“There does seem to be a consistent conversion of highway to intermodal and with the capacity in OTR loads still challenged by driver shortages, this trend is expected to continue,” said Casey.

IMC (Intermodal Marketing Company) intermodal and highway revenue for the second quarter—at $975,365,510 and $305,101,569—were up 8.6 percent and 15.7 percent, respectively. Total revenue—at $1,280,467,079—was up 10.2 percent. Average revenue per intermodal load—at $2,884—was up 6.0 percent and average revenue per highway load—at $1,655—was up 16.3 percent.

Total second quarter IMC loads—at 522,538—were up 1.3 percent, with intermodal loads up 2.4 percent at 338,188 and highway loads down 0.5 percent at 184,350.

IANA said in the report that IMC volume saw a modest growth rate, with the broader intermodal market leveraging a strong import environment, with IMCs able to leverage that growth through transloading opportunities. And it added that IMC highway growth for the month of June was at its highest level since the October 2013 peak, which could lead to increased highway growth in the third quarter, but cautioned that this theory is contingent on whether there is enough capacity for IMC’s to increase their highway business.

“Things are strong in intermodal, not only because of things moving early due to the West Coast labor talks, but because the segment is seeing underlying strength,” said FTR Senior Consultant Larry Gross. “The big story this year is service, or a lack of service. Almost everywhere shippers turn, they are facing capacity difficulties, cost issues, and service problems. If you look at what is going on at ports right now, it is just insane how bad it is as things to a large degree are significantly impaired. That is not a problem that gets fixed very easily, due to chassis-related things, the impact of bigger ships on operations, and related processing, which makes things very difficult. These service issues are putting pressure on shippers that may be considering moving more freight back to highways, but intermodal in a sense has propped up the volume, because highway capacity remains so tight. And because speeds are slower, the domestic container fleet has gotten less productive, which represents a constraint on capacity.”


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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