Intermodal volumes for U.S. Class I railroads are positive year-over-year for the first time in 2020, excepting anomalous comparisons for the week of July 4 (July 4 fell on a weekend this year, so its impact to freight was dampened). The road to get back to par has been a rocky one, though, as the capacity added back by the Western railroads has lagged their customers’ demand.
We expect continued intermodal volume growth through the back half of the year, recurring problems with network balance and more rate inflation.
Truckload carriers are increasingly bullish on contract rates (see Knight-Swift CEO Dave Jackson’s call with Bank of America Merrill Lynch analyst Ken Hoexter) and we believe that given the unpredictability of trucking capacity in the current environment, intermodal has a role to play in giving shippers more options and capacity. Whether the railroads will sort out the deployment of equipment, power, and crews to their networks and service their customers’ freight is another matter.
Intermodal spot rates out of Dallas are up this week; we believe that Chicago will eventually tighten and rates there will inflate as well as volumes grow. The newly streamlined and rationalized intermodal networks of the PSR era have not yet been tested in a positive year-over-year volume environment; we’re watching especially Union Pacific’s Chicago terminals, reduced from six to three.
You have selected content that's only available to members of FreightWaves Passport. As a member, you gain immediate access to the most in-depth and informative freight research available. It's your gateway to continuing education.
Members also get:
- Access to exclusive community dedicated to discussing the most important challenges facing freight.
- Monthly and Quarterly Freight Market reports keeping you informed of industry trends.
- Much, much more!
Click below to learn more and sign up today!
Existing Passport subscribers log in above.