Gains in international intermodal offset by losses in domestic container and trailer moves.
Total intermodal volumes fell 1.5 percent year-over-year in the first quarter of 2019, after posting strong growth in 2018, according to the Intermodal Association of North America (IANA).
IANA’s Intermodal Market Trends & Statistics report shows international intermodal volumes increased 1.2 percent, but domestic containers and trailers moving by rail dropped 4.1 percent and 5.4 percent respectively in the first quarter when compared to the 2018 period.
“A variety of factors across North America played into first-quarter results, including the reduction of tariff-driven imports. Tough year-over-year comparisons also had an impact, which will play a role in the coming quarters,” said Joni Casey, president and chief executive officer of IANA.
Larry Gross, the president of Gross Transportation Consulting, said, “Last year you had a capacity crunch on the trucking side, so intermodal was offering a safety valve of sorts, and all intermodal had to do was have capacity available and people were willing to use it. But now in the first quarter it has returned to a more normal situation where there is sufficient capacity available in trucking for those that are looking for it.
“From a competitive point of view, intermodal has to do more than have an empty box available. They have to have a price and service package that is attractive,” Gross said.
IANA said following a modest drop in the fourth quarter of 2018, intermodal marketing companies’ volumes fell 7.1 percent in the first. IANA said this was the first time since the last recession that both intermodal and highway loads declined during the same quarter.
The decline in domestic intermodal could be an indication of a “migration back to the highways” or “an indication that there is something awry with the price-service package.”
But he also said the decline in intermodal in the first quarter could be partly attributable to weather and flooding and changes in the intermodal networks as railroads adopt “precision scheduled railroading” and prune some secondary intermodal routes from their networks.
Trucking also was hit by bad weather in the first quarter. Chief economist for the American Trucking Associations Bob Costello said last week that “in March, and really the first quarter in total, tonnage was negatively impacted by bad winter storms throughout much of the U.S.
“While I expected tonnage to moderate in the first quarter, the late Easter holiday and the winter storms made it worse. It is likely that tonnage will improve in the second quarter, although year-over-year gains will be significantly below the 2018 annual increase of 6.7 percent,” Costello said.
IANA said the seven highest-density trade corridors, which accounted for 63.7 percent of total volume, were down 0.2 percent for the quarter.
It noted that results varied widely across lanes. The intra-Southeast corridor was the best performer, rising 8.7 percent, and the Midwest-Northwest corridor came in a strong second at 5.7 percent. The increase in the Southeast could reflect the decision by port authorities to establish more inland ports.
IANA said they were followed by the Southwest-South Central lane at 1.0 percent and the trans-Canada lane at 0.8 percent. The Northeast-Midwest corridor declined by 0.5 percent, the Southwest-Southeast corridor by 3.2 percent and the Midwest-Southwest by 5.1 percent.