Intermodal shipping: IANA reports Q3 intermodal volume is down 16.4 percent
Despite decline, market volumes are improving on a sequential basis
Jeff Berman, Group News Editor -- Logistics Management, 11/13/2009
Among myriad indications that the economy is slowly recovering and things are getting "less worse," recent data from the Intermodal Association of North America (IANA) could be viewed as another sign of that sentiment.
In its quarterly Market Trends report that was issued this week, IANA said that total intermodal and trailer loadings for the third quarter-at 2,995,043-were down 16.4 percent year-over-year. While loadings were down on an annual basis, things were better sequentially, with the third quarter faring better than an 18.7 percent decrease in the second quarter.
Of the four main intermodal metrics tracked by IANA, all displayed negative quarterly growth except for domestic containers, which were up 1.3 percent at 1,028,989. This 1.3 percent growth is sequentially better than the second quarter, which saw domestic containers up 0.9 percent. IANA noted that domestic containers were up in every U.S. region, with all domestic gains attributed to a 5.5 percent gain in 53-foot equipment. And on a year-to-date basis, domestic containers are up 0.8 percent.
All domestic equipment for the quarter was down 7.7 percent at 1,424,297, compared to a 9 percent decrease in the second quarter. And trailers-at 395,308-were down 25.1 percent, ahead of a 26.9 slip in the second quarter. Trailer volume has now been down 17 of the last 19 quarters, and has fallen below the 400,000 mark for the second time since IANA began its quarterly Market Trends reports in 1996.
While domestic containers saw some growth, the situation on the international side is not as positive, with ISO containers down 23.0 percent-at 1,570,746, although this fared better than the second quarter's 26.0 percent decline. Year-to-date, international is off 23.9 percent.
In an interview with LM, IANA Vice President of Member Services Tom Malloy said that international has become a victim of the new economy.
"It is easy to say consumer demand is down, but it begs the question ‘is it going to rebound?'" said Malloy. "The answer in my opinion is that it may not rebound to the robustness that it was due to this new economic climate that everyone is living in."
This is due in part, according to Malloy, to still-down housing and automotive markets, coupled with lack of consumer credit, consumers paying down debt, and spending only on essentials. He added this has brought about a new "economic reality" from the consumer side of things. While industrial production numbers are up, which is encouraging, Malloy said it is unlikely that consumer spending will follow suit.
"This could be a trend for the foreseeable future," said Malloy. "Things are quite bi-directional on the international front.
The fuel situation: In recent weeks as diesel prices inch towards the $3 per gallon range, Malloy said that 2009 domestic container numbers-compared to 2008 when diesel approached $5 per gallon-domestic containers still saw increases even as diesel came down off its record-high 2008 levels.
And with fuel prices moving up, Malloy said there could be more domestic container increases coming.
"This drives more freight to the rails; it is an unequivocal fact," said Malloy. He added that even though fuel prices are down compared to 2008, many shippers remain committed to interposal due to satisfaction with intermodal service, competitive rates compared to trucking, demand slack, and a focus on being "green" or environmentally conscious, which has been highlighted by the Association of American Railroads.
IMC performance: IANA reported that quarterly revenue for Intermodal Marketing Companies (IMC) was off 22.5 percent year-over-year at $773,510,942, compared to 24.4 percent in the second quarter. Total loads at 411,927 were down 5.6 percent, and average revenue per intermodal load and average revenue per highway load for IMCs was down 14.1 percent-$2,309-and 25.3 percent-$1,179-respectively. Intermodal and highway revenues were off 21.5 percent and 25.5 percent, respectively, for the quarter.
Total IMC revenue on a year-to-date basis at $2,153,646,561 is down 22.5 percent, with inter-modal revenue and highway revenue down 21.5 percent and 25.6 percent, respectively.
But from the second quarter to the third quarter, total loads were up 1.7 percent and total revenue was up 8.9 percent and average per intermodal and highway loads were up 8.5 percent and 0.7 percent, respectively.
"Year-to-date IMC revenue last year [at $2,780,442,424] had a fuel component that has changed," said Malloy. "Is it off just because there is no volume? It is more off a little bit of volume, a little bit of fuel, and a little length of haul."
Regarding length of haul, IANA notes in the Market Trends report that with the drop in container imports, long-haul intermodal demand has fallen. And it added that following consistent growth from 2000-2006 when it peaked at just less than 1,600 miles, average length of haul for all moves has dropped by nearly 50 miles in 2009.
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