IANA’s Market Trends & Statistics Report highlights low intermodal volumes for Q4 and all of 2019

The fourth quarter year-end 2019 edition of the Market Trends & Statistics Report issued by the Intermodal Association of North America (IANA) told a familiar story that had been largely intact throughout much of 2019, in that low volumes remained a recurring theme.

Total fourth quarter volume—at 4,446,846 units—saw a 7.4% annual decline. Trailers—at 292,513—dropped 21.4%, and domestic containers—at 1,958,649—dropped 2.7% annually, and the “all domestic equipment” category—at 2,251,162—was down 5.6% compared to the fourth quarter of 2018. ISO, or international, containers—at 2,195,684—fell 9.1%.  

And for calendar year 2019, IANA reported the following annual intermodal tallies: total volume fell 4.1% to 18,146,095; trailers were down 15% to 1,227,511; domestic containers dropped 4.5% to 7,570,940; all domestic equipment was off 6.1% to 8,798,451; and ISO containers slipped 2.2% to 9,347,644. IANA said that historically, trailer volumes are more volatile that other equipment types and that trend will probably continue in 2020.

In the report, IANA called 2019 “a very challenging year for the North American intermodal industry,” with the 2019 volume decline exceeded only by 2009’s output during the 2009 recession, which was subsequently followed by only one other year of annual declines, which came in 2016, but to the levels seen in 2019.

What’s more, IANA noted that volumes in 2019 fell in each quarter across all equipment types.

ISO volumes were impacted by the fourth quarter’s 9.1% annual decline and were up against difficult annual comparisons from the fourth quarter of 2018. But IANA pointed out that the annual comparisons are skewed, in that the U.S. did not impose a 25% tariff on Chinese goods until May 2019, with initial expectations of a January 1, 2019 tariff leading shippers to import goods over the closing months of 2018 in advance of the deadline.

Looking at the entire year on balance, IANA explained in the report that along with difficult annual comparisons up against the pre-tariff surge in late 2018, intermodal volumes were negatively impacted by other factors, including: significantly lower truck prices [rates], extra truck capacity, weaker industrial output, and changes to freight railroad intermodal service, which was seen in ongoing conversions from trailers to containers.

And it added that more of the same could be in store this year, while not at the same rate of decline, due to things like a potential pullback in trade tensions, increasing fuel prices on the heels of IMO 2020, a tightening of truck capacity, and railroads focused on growth.

IANA President and CEO Joni Casey told LM that difficult annual comparisons guaranteed some volume decline, but continued trade tensions throughout the year made predictions difficult on the international side. And she added that last year’s loose truck capacity was also a contributor, in terms of domestic intermodal.

When asked about the impact of the “Phase One” trade deal between the United States and China, and the coronavirus on intermodal operations, Casey said there could be some ramifications for the latter, at this point.

“It’s probably too soon to assess the impact of the “Phase One’ trade,” she said. “However, it does bring some stability to the international sector. The Coronavirus along with the emerging impacts of IMO 2020 bring other elements that could impact the intermodal market.”

As for top of mind issues for intermodal service providers in 2020, Casey pointed to ongoing trade policy and tariffs, highway capacity, and driver classification and the independent contractor being among the most top of mind issues. 

“We will also be closely watching highway reauthorization efforts to ensure that there is adequate funding for intermodal projects and connectors,” she said.