Q3 intermodal volumes are solid with domestic performance leading the way, reports IANA

Third quarter intermodal volumes showed decent volumes, with domestic containers back to leading the charge after the second quarter, which saw international volumes pace quarterly growth, according to the Intermodal Market Trends & Statistics Report released by the Intermodal Association of North America (IANA).

Total intermodal volume—at 4,214,708—was up 5.1 percent compared to the third quarter of 2013. IANA said this is slightly below the first half growth rate of 5.5. percent and below the second quarter’s 8.2 percent annual increase.

Domestic containers were up 7.0 percent at 1,666,724, down slightly from the 7.7 percent growth rate it had in the second quarter, and are total domestic volumes, up 5.5 percent at 2,077,888, are ahead of international volumes for the first time ever on a seasonally adjusted basis going back to when IANA first began keeping data. Trailer growth in the third quarter was flat at 411,614.

“While actual domestic intermodal volumes are still slightly below international traffic, it wasn’t a surprise that on a seasonally adjusted basis, domestic was higher, said IANA President and CEO Joni Casey in an interview. “We have been flirting with this outcome for almost a year.”

IANA noted in the report that domestic container volumes have seen annual quarterly gains in every quarter going back to the third quarter of 2005, adding that since domestic containers embarked on this growth path, volumes have subsequently more than doubled during this period, which, in turn, makes the case for the ongoing growth rate softening to a degree. And for the first three quarters of 2014, domestic containers are up a cumulative 6.0 percent annually, down from 9.5 percent for the same period a year ago.

“Domestic gains have been consistent, averaging approximately 6 percent a quarter over the last 24 months,” Casey said. “Growth in this segment has been driven by the same relative factors – tight highway and driver capacity, congestion, and consistent diversions from roads to rail.  Continued economic recovery, albeit marginal, was also a factor.”

When asked how the ongoing congestion-related issues at West Coast ports are impacting domestic intermodal service and operations, Casey said that based on the bi-directional flow of loads moving in the Southwest/South Central lane, there has been minimal impact on overall domestic intermodal volumes.  She added that the same observation holds for domestic movements in the Southwest/Southeast and Southwest/Midwest lanes.

“Domestic volumes in the Northwest/Midwest lane dropped 2.5 percent during the third quarter, which may be due to the fact that approx. one third of this traffic is typically transloaded and could have been impacted by terminal congestion,” she said.

International, or ISO, containers, were up 4.7 percent at 2,136,820, which was down from the second quarter’s 2,126,170, but IANA made the case that third quarter international output was still good, given the significant second quarter volume. 

According to the report, there was concern that the strong second quarter international output was due to shippers moving freight earlier in the year, with third quarter volumes expected to be weaker, as there was early import volume based on report from various shippers. What’s more, IANA said that the solid third quarter performance indicates that much of the second quarter’s gains were due to the “rebound effect from the horrendous winter and continuing strength in the economy.”

With international volumes back down to a more typical growth range after a very strong Q2, Casey said that barring any last minute surges in import volumes, fourth quarter international growth is anticipated to be comparable to the third quarter’s volumes, ending the year with gains of approximately 3.5 – 4.0 percent.