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Home Intermodal

Intermodal markets: Rolling strong into Q4

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

(Photo: FreightWaves / Jim Allen)

Intermodal volumes were still up mid-single digits in Week 39 (up 5.5% year-over-year), even as railroads raise prices on shippers and intermodal marketing companies and congestion at Southern Californian ports worsens.

Ocean bookings data, particularly on the trans-Pacific, indicates that imports will stay strong for at least the next month. Intermodal volumes will finish 2020 much stronger than they started the year, despite everything, and will be boosted by truckload rates and capacity issues.

In our view, resolving the trucking industry’s current capacity constraint will take longer than in the 2017-8 cycle because of new regulations, a constricted pipeline of student drivers, and new truck orders that were until recently far below baseline replacement levels. The trucking industry’s current inability to add capacity fast enough to adjust to the COVID goods economy is the foundation for sustained growth in intermodal volumes in the months ahead.

We don’t think, however, that the modal shift between truckload and intermodal is one way. We see opportunities for truckload carriers in inland markets like Chicago, St. Louis, Memphis, Tennessee, and even Houston as the combination of higher volumes and leaner intermodal networks creates service issues.

For now, though, Class Is appear to have found a foothold on improving their basic intermodal service metrics, dwell and train velocity, at least when averaged across their networks.

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Tags: intermodal volumeslogistics researchtransportation research
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Tony Mulvey

Research Associate, FreightWaves

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