Record month for intermodal paces AAR August volumes

The Association of American Railroads (AAR) reported this week that total rail carload and intermodal volumes in August increased on an annual basis.

Intermodal in August marked the single ever best monthly performance for the mode at 1,031,179 containers and trailers, according to AAR data. This was up 4.4 percent—or 43,398 units—compared to August 2012, and the weekly average of 257,795 units for the month is the highest weekly average for any month ever, the AAR stated.

August carloads—at 1,178,619—increased 0.5 percent, or 5,285 carloads, year-over-year. And 12 of the 20 commodity categories tracked by the AAR saw annual increases, with petroleum and petroleum products up 18.5 percent and crushed stone, gravel, and sand up 9.3 percent. Coal and grain were down 2.0 percent and 9.0 percent, respectively.

“In terms of average weekly volumes, August was the best intermodal month in history for both U.S. and Canadian railroads,” said AAR Senior Vice President John T. Gray in a statement. 

“Because the fall is typically the peak season for intermodal traffic, it wouldn’t be surprising to see new records set in September and October.  Intermodal’s strength is a testament to the massive private investments railroads have made in their intermodal operations and the tremendous effort they’ve put forth in improving the reliability, responsiveness, and cost effectiveness of their intermodal service.”

Shippers have told LM that intermodal continues to be a “go to” mode in light of increasing diesel prices, regulations being enforced for motor carriers, and cost savings in exchange for longer transit times.

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.

For the week ending August 31, U.S. carloads were up 3.1 percent annually at 3022,026, and intermodal was up 4.2 percent at 259,672 units.

On a year-to-date basis for the first 35 weeks of the year carloads are down 1.1 percent at 9,780,754, and intermodal is up 3.6 percent at 8,520,252 units.