August intermodal volumes see another month of declines, reports IANA

The ongoing decline for intermodal volumes continued in August, according to data provided to LM by the Intermodal Association of North America (IANA).

Total August volume, at 1,463,123 units, decreased 7.5% annually, faring better than the 9.8% annual decrease seen in July.

Domestic containers, at 710,920, was the lone segment to see an increase, up 1.8% annually. Trailers, at 52,127, saw a steep 27.8% annual decrease. And all domestic equipment, which is comprised of trailers and domestic containers, was off 1.0%, to 763,047 units. ISO, or international, containers, at 700,076 units, were down 13.7%.

On a year-to-date basis through August, total intermodal units, at 10,891,762 units, were off 9.3% annually. Domestic containers were down 4.5% annually, to 5,255,054, and trailers fell 24.6% annually, to 484,425. All domestic equipment totaled 5,739,479, for a 6.6% decline. ISO containers were off 12.1%, to 5,152,283.

In its recently-issued Intermodal Quarterly Report, IANA explained that sluggish economic conditions are impeding domestic output and containerized imports. And it added that both wholesale and retail inventories are still at “relatively high levels,” and subsequently dampening the need to move goods, while truckers have hired drivers and also brought on tractor and trailer capacity, which it said is creating a competitive environment where truckers are chasing traffic that would typically move via intermodal.

And from a seasonal perspective, IANA said that things look more promising over the second half of 2023.

“Container volume is following a more typical peak season pattern and points to higher results in the second half of the year,” said IANA. “Loadings peaked in March last year, and weaker comparisons in the second half of 2022 will help boost this year’s performance, supported by improvements in port throughput, chassis supply, drainage availability, and rail network fluidity.”

IANA President & CEO Joni Casey previously told LM that intermodal volumes, for the second quarter and first half of 2023, did not meet expectations.

“We were hoping for a little more dynamic increase in loads, but slower demand impacted volume more than expected,” she said. “It has also taken longer for more positive GDP numbers to work their way into the supply chain. Q2’s volume related to auto production though, has been a welcome bright spot for intermodal.” 

And she added that a combination of still-high inventories, inflation, and reduced consumer demand are all contributing factors for lower intermodal volumes, with the caveat that it is perhaps slightly weighted towards reduced consumer spending.

When asked about prospects for the 2023 Peak Season, from an intermodal perspective, Casey observed that with the risk of recession lowering and inventories being worked down, IANA is anticipating more positive numbers for the second half of the year including 2023 peak season, albeit more muted than previous peaks.

Larry Gross, president of Gross Transportation Consulting, observed that both the domestic and international intermodal sectors saw significant declines during the second half of 2022, as the unprecedented post-pandemic surge finally ran out of steam.

“More recently, the declines abated in Q1 of this year and both sectors now appear to have turned the corner,” said Gross. “While significant annual deficits remain, the comparisons are much more kind when looking at pre-pandemic traffic levels. With regard to capacity, substantial numbers of new domestic containers and chassis have now arrived. Further, with lower volumes, congestion on the network has ended and this has resulted in greatly improved equipment cycle times and better productivity. This has restored fleet capacity that had been lost during the service crisis. The bottom line is that there is plenty of capacity available to meet current and upcoming demand levels.”