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Home Intermodal

Intermodal markets: Escape from LA

by Tony Mulvey
Thursday, December 10, 2020
in Intermodal, News, Rail
Reading Time: 1min read
0

(Photo: FreightWaves / Jim Allen)

Another wave of rate and service volatility, the product of high volumes and tight capacity, will work its way through the country from its source in Southern California. Rates out of Los Angeles spiked as intermodal tender rejection rates, which only come into play during periods of serious disruption, are now more than 22%.

Consumer goods intermodal shippers like Amazon and Samsung, discussed below, import a significant proportion of their containerized freight through the ports of Los Angeles and Long Beach — 75% in the case of Amazon. Over the course of the next six weeks, we expect those shippers and shippers like them to continue to bring a high volume of freight into the country ahead of peak retail season.

In a normal year, intermodal markets cool in the fourth quarter before truckload, as containerized freight volumes fall through the month of December, even as shippers frantically move inventory into position in last-minute truckload moves up until, and beyond, the Christmas holiday. We don’t know if that will be the case this year. COVID has shifted consumer buying patterns from services to goods, which in turn has fueled demand for surface transportation even as the broader economy sputters along. 

In the near term, though, expect capacity tightness and higher rates in both intermodal and truckload to spread from Los Angeles to inland markets like Dallas and Chicago, and then Atlanta, over the next few weeks.

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Tags: Amazonintermodal capacityintermodal ratesintermodal volumelogistics researchPort of Long BeachPort of Los AngelesSamsungtransportation research
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Tony Mulvey

Research Associate, FreightWaves

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