News / Congestion shaken off, but US intermodal still in the doldrums

US railways and ports have shaken off the congestion that had weighed heavily on their operations, but this has not lifted their intermodal fortunes.

The second quarter showed a further decline, resulting in an almost 10% drop in intermodal unit count for the first half of the year.

Numbers from the Intermodal Association of North America (IANA) show a 10.4% year-on-year slump in intermodal volumes in the second quarter, to 4.1 million units.

The decline was across the board: the international container count fell 13.2%, to just under 2m units, while domestic containers were down 6.3% and trailers plummeted 20.1%.

“Slower year-over-year demand for goods and a competitive freight environment took their toll on the second quarter,” said IANA president and CEO Joni Casey.

Intermodal traffic fell in all of the seven highest-density freight corridors, which together account for about 60% of US intermodal volumes. Traffic plummeted 18.3% in the south-east–south-west corridor, while the south central–south-west sector was down 13.8%.

The sector’s tally for the first half of the year amounted to a 9.6% drop in intermodal units and Ms Casey expressed hope that things would fare better in the second half.

She added: “The numbers suggest a later peak this year and an improved picture for the second half of 2023.”

However, the July numbers don’t paint a picture of a brighter future. For the week ended 29 July, the Association of American Railroads recorded a 4.8% year-on-year drop, an identical decline to the previous week,  and the association reported a 5.5% decrease in intermodal containers and trailer for last month.

Somewhat ironically, three out of four weeks in July actually ended up as the strongest weeks for intermodal traffic this year.

The railways in Canada did not fare much better, not surprising in light of the disruption that affected traffic through the ports of Vancouver and Prince Rupert, and the closure of the rail link that connects the port of Halifax to the interior, which lasted until last Friday. In the week ended 29 July, Canadian intermodal traffic was down 15.9%.

The picture was brighter in Mexico, however, showing a 3.6% year-on-year gain in intermodal traffic, and the sector has been up 3.5% in the first 30 weeks of the year.

Predictably, the US Class I railways tabled lower results for the second quarter than last year, and the weak intermodal sector was one factor that affected the numbers.

Union Pacific reported a 20% drop in intermodal revenue, while revenue per carload in the sector fell 14%. Norfolk Southern’s  intermodal shipment count was down 9%, year on year, and intermodal revenue per carload contracted 15.7%. CSX saw its operating income shrink from $1.7bn a year ago to $1.48bn, partly due to the drop in intermodal volumes.

“Though intermodal activity remains challenged, our strong service performance distinguishes us in the marketplace and is attracting shippers to our network,” said CSX president and CEO Joe Hinrichs.

For intermodal heavyweight JB Hunt, operating income per load in the segment slumped 24% in the second quarter, with some 18% of the company’s intermodal containers idle during the period.