Subscribe to our free, weekly email newsletter!


Intermodal leads the way for June 2013 volumes, says AAR

By Jeff Berman, Group News Editor
July 10, 2013

The theme of mixed volumes remains intact based on data released by the Association of American Railroads (AAR) for the month of June.

June carloads—at 1,136,719—were down 0.3 percent—or 3,819 carloads annually, according to the AAR. And ten of the 20 commodity categories the AAR monitors saw annual gains, with petroleum and petroleum products up 31.7 percent—or 13,329 carloads—and crushed stone, gravel, and sand up 12 percent—or 9,293 carloads.

Intermodal loadings in June continued their strong momentum at 1,009,387 trailers and containers, which represent a 1.3 percent—or 13,393 units—increase.  The AAR said the weekly intermodal average of 252,347 in June now stands as the single highest weekly intermodal average for any month in history.

“Intermodal rose in June for the 43rd consecutive month, setting a new volume record in the process,” said John Gray, AAR’s Senior Vice President of Policy and Economics, in a statement.  “Generally, the fall is the peak period for intermodal, so it wouldn’t be surprising if further intermodal records were set in the months ahead.  Large declines in grain and coal held down June carloads, but some of the more economically-sensitive commodities like autos and crushed stone were up for the month.”

The surge in intermodal is not entirely surprising, given the years-long trend of domestic freight converting from truck trailers to containers on rail; truck trailers can be double-stacked, which makes them more cost-efficient and effective.

While it has been largely noted that domestic intermodal gains have occurred due to lower fuel costs, improving service, and major investments into rail networks, among others, it clear that intermodal is taking share from over the road trucking and will continue to be an area of secular growth for railroads.

But while the growth rates are impressive, industry experts maintain that these strong domestic container intermodal volumes are due in large part to freight coming out of intermodal trailers into trailers or from one box to another, coupled with the fact that the gross number of intermodal loadings—both domestic and container—were higher in 2006 than in 2012 as was gross GDP and industrial production.

What’s more, during that same period the number of truckloads moved and truck tonnage volume is larger than intermodal.

Brooks Bentz, a partner in Accenture’s supply chain practice, recently told LM that rail carload, coupled with intermodal, is a powerful alternative to over-the-road trucking, given the issues of congestion, infrastructure condition, capacity, as well as the cost of fuel.

And Tony Hatch, principal of ABH Consulting, explained that intermodal “is in the early-middle innings of a secular shift from truck to rail, as evidenced by domestic containers’ growth performance from the Great Recession through today.”

About the Author

Jeff Berman headshot
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. .(JavaScript must be enabled to view this email address).


Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Following the lead of its Congressional Colleagues in the House of Representatives, the United States Senate yesterday approved a measure geared to keep federal surface transportation funding intact through the end of December with a nearly $11 billion stopgap fix.

XPO Logistics announced second quarter earnings and the acquisition of two companies, New Breed Logistics, a non asset-based 3PL focusing in contract logistics services, for roughly $615 million, and Atlantic Central Logistics, a 3PL provider of last-mile logistics services, for roughly $36.5 million.

The report, entitled “Outlook for the Domestic Transport and Logistics Market in 2H14 and Beyond,” takes the view that strong freight levels in the second quarter have left trucking companies in a good position: one in which they need to come up with new plans to handle rising demand. But even with that positive momentum afloat, the report observes that there are some familiar challenges intact, such as a lack of qualified drivers and the regulatory drag from the new hours-of-service rules that took effect in July 2013.

Flags of Convenience are a fact of life in the commercial maritime trade, but several European political action groups are worried that they will pose a threat to the Continent’s air cargo industry.

For May, which is the most recent month for which data is available, the SCI is -7.5, following April’s -7.5. FTR said this reading represents a still-tight capacity environment, as utilization rates hover between 98 percent and 99 percent.

Article Topics

News · Intermodal · AAR · Railroad Shipping · All topics

Comments

Post a comment
Commenting is not available in this channel entry.


© Copyright 2013 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA