Intermodal Freight Gains 4.9% in 2011, Boosted By Strong Domestic Shipments

Truck-rail intermodal freight increased 4.9% in 2011 from the previous year, led by a strong gain in domestic shipments and putting last year’s volume in a virtual tie for the second-best annual volume ever, the Intermodal Association of North America reported.

Domestic shipments increased 9.6% in 2011, while international volume gained 2.8%. In the fourth quarter, intermodal grew 4.1% from a year earlier, with domestic shipments increasing 7.9% and international freight gaining just 0.7%, according to IANA’s Feb. 3 market trends and statistics report.

North American intermodal shipments finished 2011 at 14.072 million, nearly matching the 14.078 million in 2007, but short of the record 14.2 million revenue shipments in 2006. Fourth-quarter volume rose to 3.60 million shipments from 3.46 million, the eighth consecutive quarterly gain.

“Intermodal’s growth in the face of a sluggish economy suggests that rail continues to take share from trucking,” the report stated. “Domestic containers probably gained share from highway movements as truckers continue to face capacity constraints, rising fuel and other costs, driver shortages, and reduced productivity due to tightening regulatory requirements.”

One sign of that growth was the fact that domestic container freight rose more than twice as fast as truckloads traveling more than 550 miles, the traditional intermodal market, the report said. There were 23.3 million truck shipments over 550 miles.

The trade group’s report forecast steady growth for this year, and predicted that trucking shipments would increase as well.

“With intermodal rebounding handsomely from the third quarter’s disappointing results, the industry is well positioned entering 2012,” IANA, based in Calverton, Md., stated. “The boom in big containers during the fourth quarter should boost the confidence of those betting on continued domestic gains, including both container fleet owners and railroads.”

The optimistic intermodal forecast didn’t include percentage growth, and was tempered by Asian freight trends.

“As always, it will take a few months — and getting past the calendar distortions of the early Lunar New Year — to get a good handle on the direction of container imports.”

Last year, international container shipments sagged in the fall, dropping 5% below the year-earlier period in October, which in the past often has been the peak month of international shipments tied to holiday retailers.

Instead of the October peak, August was again the busiest month for international intermodal freight. Fourth-quarter international volume rose last year because shipments grew in November and December, IANA reported.

“Now that the economy is growing, trucking is taking off, projected to add 4% or more in volume during 2012,” the report said, building on a fourth quarter when highway shipments rose 4.5% to 149.6 million.

“If this were all that was happening, the market could deal with it easily. Driver hiring has been expanded enough to deal with approximately a 4% gain,” the report continued, before adding that the spring shipping surge could squeeze the driver supply and result in higher rates and shipping delays. The report also highlighted freight trends in the Pacific Northwest, where Canadian and U.S. ports have been battling for business.

IANA said Western Canadian intermodal loads rose the fastest, 9.4%, of any geographic region in the fourth quarter because of freight growth through the Port of Prince Rupert, British Columbia.

Meanwhile, Seattle and Tacoma, Wash., did recover a bit in the quarter, rising 1.2% last quarter after declines of 17% or more in the second and third quarters of 2011 on a year-over-year basis.

The report also gauges trends for intermodal marketing companies, or IMCs, which showed 8.8% growth in intermodal loads in the quarter, in sharp contrast to a 4.4% drop in highway loads arranged by the marketing companies, which act like brokers to arrange freight shipments.

“IMC highway volume struggled again in the fourth quarter,” the report said. “The year-end results were the third consecutive quarterly (sequential) decline for IMC highway loads, likely a reflection of trucking capacity constraints that limited IMC’s ability to broker loads.”