US Intermodal Traffic Rises
US domestic intermodal traffic has seen a 2.5% year-on-year growth, driven by a 7.4% increase in domestic containers, according to the Intermodal Association of North America (IANA).
US domestic intermodal traffic has grown 2.5% year on year, driven by a 7.4% increase in domestic containers, according to the Intermodal Association of North America (IANA). This growth is attributed to tight capacity and soaring rates in the truckload sector, prompting US shippers to turn to intermodal transport.
Intermodal Traffic Growth
The growth in intermodal traffic is seen as a return to an historic norm, according to Dutch Fry, VP intermodal business development at Echo Global Logistics. He notes that shippers lost faith in the product during the pandemic, but are now re-appraising intermodal due to the shrinkage of trucking capacity and soaring trucking rates.
The Intermodal Association of North America (IANA) reports that international containers sank 1.9% in the first half of the year, but this slump was reversed last month with a 4.5% increase in containerised imports. The ports of Los Angeles and Long Beach both reported strong import growth for July.
Congestion Concerns
Despite the growth in intermodal traffic, concerns about congestion at ports and railheads have been raised. Joel Henry, CEO of IMC Logistics, reports that while there is no widespread congestion, there are localized pressure points, including congestion issues at Newark Terminals and terminal throughput and appointment availability challenges at New Orleans and Mobile.
The following ports and railheads are experiencing congestion issues:
| Port/Railhead | Congestion Issue |
|---|---|
| Newark Terminals | Gate moves averaging 1-2.5 hours |
| New Orleans | Terminal throughput and appointment availability challenges |
| Mobile | Terminal throughput and appointment availability challenges |
| Oakland | Gate moves up to 2.5 hours |
| Los Angeles and Long Beach | Delays in obtaining appointments and tightening chassis supply |
Intermodal vs Trucking
Intermodal transport offers more reliable and stable pricing than the trucking spot market, according to Dutch Fry. However, pricing is based less on rail volume and more on trucking rates. The trucking market is expected to see further reduction in capacity due to the US government's campaign to eliminate non-domiciled drivers and those with insufficient English language proficiency.
The cumulative effect of recent constraints could impact intermodal traffic if activity remains elevated, according to Joel Henry. He advises shippers to remain flexible and build additional time into their supply chains in markets where carriers are contending with limited terminal appointments, increased gate throughput, and/or stressed chassis supply.
As reported by The Loadstar, the rise in intermodal traffic is expected to continue into September with the traditional peak season. However, Dutch Fry does not expect to see a lasting impact, as the strong increase is unlikely to last beyond mid-October.
