Q2 intermodal volume falls for the eighth consecutive quarter, reports IANA

Second quarter 2023 intermodal volumes again saw declines, according to the most recent edition of the “Intermodal Quarterly” report, which was recently issued by the Intermodal Association of North America (IANA).

Total second quarter volume—at 4,148,328 units—was down 10.4% annually, marking the eighth consecutive quarter of annual declines, and also the largest quarterly decline over that span. While this marked another decline, IANA pointed out that it was topped the first quarter by 5.3%, while coming in below each quarter in 2022.

Trailers once again represented the steepest annual quarterly decline, falling 20.1%, to 183,935, representing the eighth consecutive quarter of double-digit declines (and its fifth straight quarter of annual quarterly declines topping 20%), with trailers accounting for 4.4% of total intermodal loadings, down from 4.9% in the first quarter. Domestic containers—at 1,967,234—saw a 6.3% annual decline, its third straight quarter of declines on the heels of gains over the first three quarters of 2022. All domestic equipment, which is comprised of trailers and domestic containers, fell 7.6% annually, to 2,151,169. ISO, or international containers, dropped 13.2%, to 1,997,159, its second straight quarterly decline.

IANA explained in the report 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 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.