Intermodal declines continue in June, reports IANA

Intermodal volumes again declined in June, while at a lower level than May’s decline, according to data provided to LM by the Intermodal Association of North America (IANA).

Total June volume, at 1,429,179 units, saw a 7.1% annual decrease, faring better than May’s 8.8% annual decrease, as well as a 15.4% April decrease.

Domestic containers fell 2.2% annually, to 678,165. All domestic equipment, which is comprised of trailers and domestic containers, totaled 740,921, for a 3.6% annual decrease. ISO, or international, containers, dropped 10.7%, to 688,258.

On a year-to-date basis through June, total intermodal units, at 8,088,481 units, were off 9.6% annually. Domestic containers were down 6.0% annually, to 3,894,916, and trailers fell 24.8% annually, to 375,876. All domestic equipment totaled 4,270,792, for an 8.0% decline. ISO containers were off 11.2%, to 3,817,689.

IANA President and CEO Joni Casey recently told LM that on a general basis intermodal industry growth remains dependent on the business environment and external factors, including prevailing economic conditions—inflation vs. recession; consumer spending; and excess OTR (over-the-road) trucking capacity. 

“However, while volume numbers are still off from a year ago, they have increased week-over-week for the last month, which is a promising sign,” she said. “Cross-border trade with Mexico is one anticipated growth area for intermodal as well.”

Addressing inventories, as companies take steps to draw down inventories and get them to levels that are more in line with current demand patterns, Casey noted that as inventories rebalance, freight volumes should increase, adding that intermodal is well-equipped to take a share of that growth, as network fluidity and equipment availability recovers.

As for the long-running decline in trailer volumes, she said that the decline is expected to continue, also observing that to the extent that this traffic is being converted to trailers, does present a major concern.

Looking ahead to the second half of the year, Casey described the period as a moving target, in a sense.

“The ‘new normal; seems to be moving towards ‘flatter’ longer peaks,” she said. “If gains in weekly volumes continue, we may see more of a traditional peak season—ramp up to September, and holding through October and November heading into the Holidays.”

What’s more, a recent IANA report highlighted how consumer spending levels remain stronger than anticipated, with the first quarter seeing solid spending on a seasonally adjusted basis, against the backdrop of consumers dealing with the duo of higher interest rates and saving less money each month than they did prior to the pandemic.

On the import side, IANA described it as a wild card, in regards to the 2022 shift in the re-routing of containers from the West Coast to the East Coast and Gulf Coast.

“The all-water rerouting of containers to the East Coast and Gulf Coast also has moved some volume from rail intermodal to truck, which is more competitive in those shorter lanes,” it said. “Pending a new West Coast labor agreement, at least a major portion of that freight should return to the West Coast and more intermodal-friendly lanes.”