Class I railroads expect domestic intermodal ramp up

Despite sluggish performance in the second quarter — as in the smallest quarterly growth rate since 2009 — domestic intermodal volume is poised to pick up through the remainder of 2015, and beyond. Class I executives and intermodal industry observers cite several reasons for optimism, such as the steadying economy, trucking industry woes, and railroads’ improving service performance, aggressive marketing strategies and continued infrastructure investments.

Although there’s still some uncertainty shrouding the domestic intermodal market, such as the degree to which truckers can take advantage of falling fuel prices, Class Is anticipate steadier volumes, especially during the traditionally busy fall peak season. For the most part, shippers continue to consider rail not only for the lower-cost, long-haul portion of their transportation moves, but for other areas of their supply chains that are suited to railroads and trucks working in concert. Case in point: A retailer tapping intermodal to more quickly receive time-sensitive freight associated with a promotional sale.

These are the conclusions reached by our freelance writer Robert J. Derocher, who sought to gauge the domestic intermodal market by probing Class I execs and industry observers. He shares his findings in this article he contributed to our September issue.

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AAR: U.S. railroads broke one-week-old intermodal volume record

For the week ending Sept. 20, U.S. railroads reported 279,777 intermodal loads, breaking the weekly volume record of 279,052 units they just set a week earlier, according to the Association of American Railroads. On a year-over-year basis, intermodal volume rose 6.4 percent.

U.S. roads also reported 302,178 weekly carloads, up 5 percent. Total combined traffic increased 5.7 percent to 581,955 units and nine of 10 of carload commodity groups posted gains, led by petroleum and petroleum products at 26.8 percent, grain at 23.2 percent and nonmetallic minerals at 10.8 percent.

For the week, Canadian railroads reported 85,453 carloads, down 0.2 percent, and 60,870 intermodal units, up 7 percent compared with the same week last year. Mexican railroads reported 13,459 carloads, up 4.8 percent, and 10,511 intermodal units, up 2.6 percent.

Through 2014’s first 38 weeks, U.S. railroads increased carloads 3.5 percent to 11,020,960 units and boosted intermodal volume 5.7 percent to 9,802,259 units compared with the same 2013 period. Canadian railroads reported a 1.4 percent increase in carloads to 3,015,371 units and a 7.1 percent gain in intermodal volume to 2,169,836 units, while Mexican railroads’ carloads ratcheted up 1.7 percent to 593,441 units and intermodal volume rose 4.3 percent to 396,140 units.

Through 38 weeks, 13 reporting U.S., Canadian and Mexican railroads handled 14,629,772 carloads, up 3 percent, and 12,368,235 containers and trailers, up 5.9 percent compared with the same 2013 period.

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