Intermodal volumes continued to decline in May, according to data provided to LM by the Intermodal Association of North America (IANA).
Total May volume came in at 1,418,733 units, falling 8.8% annually. While topping April’s total volume, which came in at 1,300,416 units, May’s annual decline was not as steep as April’s 15.4% annual decrease.
Domestic containers were down 4.9% annually, to 666,326, and trailers fell 17.7% annually, to 62,165. All domestic equipment, which is comprised of trailers and domestic containers, totaled 728,491, for a 6.2% annual decrease. ISO, or international, containers, dropped 11.3%, to 690,242.
On a year-to-date basis through May, total intermodal units, at 6,659,302 units, were off 10.1% annually. Domestic containers were down 6.8% annually, to 3,216,751, and trailers fell 26.3% annually, to 313,120. All domestic equipment totaled 3,529,871, for an 8.9% annual decrease. ISO, or international, containers, dropped 11.3%, to 3,129,431.
IANA President and CEO Joni Casey recently told LM that on a general basis intermodal industry growth remains dependent on the business environment and external factors, including prevailing economic conditions—inflation vs. recession; consumer spending; and excess OTR (over-the-road) trucking capacity.
“However, while volume numbers are still off from a year ago, they have increased week-over-week for the last month, which is a promising sign,” she said. “Cross-border trade with Mexico is one anticipated growth area for intermodal as well.”
Addressing inventories, as companies take steps to draw down inventories and get them to levels that are more in line with current demand patterns, Casey noted that as inventories rebalance, freight volumes should increase, adding that intermodal is well-equipped to take a share of that growth, as network fluidity and equipment availability recovers.
As for the long-running decline in trailer volumes, she said that the decline is expected to continue, also observing that to the extent that this traffic is being converted to trailers, does present a major concern.
Looking ahead to the second half of the year, Casey described the period as a moving target, in a sense.
“The ‘new normal; seems to be moving towards ‘flatter’ longer peaks,” she said. “If gains in weekly volumes continue, we may see more of a traditional peak season—ramp up to September, and holding through October and November heading into the Holidays.”
What’s more, a recent IANA report highlighted how consumer spending levels remain stronger than anticipated, with the first quarter seeing solid spending on a seasonally adjusted basis, against the backdrop of consumers dealing with the duo of higher interest rates and saving less money each month than they did prior to the pandemic.
On the import side, IANA described it as a wild card, in regards to the 2022 shift in the re-routing of containers from the West Coast to the East Coast and Gulf Coast.
“The all-water rerouting of containers to the East Coast and Gulf Coast also has moved some volume from rail intermodal to truck, which is more competitive in those shorter lanes,” it said. “Pending a new West Coast labor agreement, at least a major portion of that freight should return to the West Coast and more intermodal-friendly lanes.”