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Q1 intermodal volumes see 2 percent annual gain, reports IANA

Total intermodal volume movements—at 4,156,999—were up 2.0 percent annually and outpaced the 0.3 percent annual growth rate from the fourth quarter of 2015.

By ·
{scmr_abstract}
By ·

Intermodal volumes for the first quarter of 2016 saw growth, albeit on a fairly modest level, according to the Intermodal Market Trends & Statistics Report issued this week by the Intermodal Association of North America (IANA).

Total intermodal volume movements—at 4,156,999—were up 2.0 percent annually and outpaced the 0.3 percent annual growth rate from the fourth quarter of 2015.
As has been the case more often than not with intermodal volumes, domestic containers again had the highest annual growth rate, up 6.4 percent annually to 1,767,006. ISO, or international containers, were up 3.8 percent to 2,080,676, but IANA said that tally loses clout, when considering that U.S. container imports grew 5.1 percent annually in the first quarter.

Trailers again saw another large drop off, down 24.4 percent to 309,317. IANA pointed out that trailers have been seeing declines for the last several years, with the first quarter decline steeper than usual, due to the restructuring of Norfolk Southern’s Triple Crown operations in which it highway trailers that were specifically fitted for intermodal usage were discontinued in all lanes outside of its Detroit-Kansas City lane. Other factors attributable to low trailer volumes cited by IANA include: low fuel prices that led to increased competition from trucking, as well as rising e-commerce sales pushing more freight onto trucks and off of intermodal trailers.

IANA noted that the annual growth rate for all first quarter volume appeared to be “modest” when stacked up against the 2.8 percent annual gain for the same period last year and also out of line with longer-term growth trends. But is cautioned that Norfolk Southern’s decision to exit a significant amount of its trailer business skewed volumes, while total container volume saw a 5 percent uptick.

Domestic containers, said IANA, were aided by strong import growth that drives transloading to larger containers and intermodal volume. What’s more, with coal loadings significantly down, IANA pointed out that the optimal way to offset that is to aggressively grow domestic intermodal, which is likely to gain traction given the combination of increasing trucking sector regulations and improving rail service.

On the international side, IANA said that volume gains have been unpredictable and impacted by the early 2015 West Coast port labor issues while annual volumes were consistent with the cumulative 4.6 percent container import gains in the U.S. and Canada. IANA explained it is likely container imports will see gains throughout 2016, with the weak ending to 2015 expected to boost fourth quarter growth and the expectation that 2016 container growth will be up 5-6 percent as long as the dollar remains strong and consumer spending stays steady.

IANA President and CEO Joni Casey said that first quarter volumes were in line with expectations for the most part, although the decrease in trailers was higher than anticipated.

“Once the net effect of the Triple Crown restructure has worked through the system, we expect intermodal trailer volumes to stabilize but continue its decline as a percentage of intermodal shipments,” she said.

On year-to-date basis, she said that over all volumes are a little slower than expected.

“Marginal growth should continue through the second quarter and then pick up during the last half of the year as excess inventories are worked off and need to be replenished,” she said.


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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