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Home Intermodal

Intermodal markets: A test on the horizon

by Tony Mulvey
Wednesday, August 5, 2020
in Intermodal, Rail
Reading Time: 1min read
0

(Photo: FreightWaves / Jim Allen)

U.S. Class I intermodal volumes were down just 1.8% compared to 2019 last week as the industry benefits from growing imports and tight trucking capacity.

 

In general, intermodal service has held up fairly well, deteriorating only slightly as volumes have slowly ground upward toward par: Train velocities are still fast and terminal dwell times are still short, though both measures are starting to deteriorate.

 

We believe that the most important test of the rails’ ability to operate with fewer crews and assets on the track is about a month away. According to Refinitiv, there are an extraordinary number of containerships docked in Chinese ports — more than at any other time in the past five years and well above trailing averages.

 

Not all of those ships will reach U.S. ports, but many will. The trend toward fewer larger sailings has made port volumes more volatile, container terminals more congested and intermodal service harder to deliver. In our view, an important test — the coming import surge — awaits intermodal marketing companies (IMCs) and rails this fall. With fewer intermodal terminals in important hubs like Chicago, shippers may be forced to rely on spot trucking capacity and longer drays to move their freight.

 

One thing we know for sure: There’s another heat wave coming to West Coast freight markets.

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Tags: intermodal capacityintermodal volumesWest Coast Ports
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Tony Mulvey

Research Associate, FreightWaves

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