Intermodal Volume Holds its Own in Q3

November 26, 2007

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Declining imports from Asia and sluggish domestic traffic demand may have taken its toll on intermodal volume in 2007's third quarter, but total North American volume in Q3 was the second-best quarter ever recorded, according to the Intermodal Association of North America this month.

Increasingly more truck owners are burdened by high fuel prices, a driver shortage and capacity, and are turning to intermodal as a diversified service offering for their transportation portfolios.

Considering such hurdles as increasing import values and domestic freight demand, the current economic slowdown sure has taken its toll on the freight transportation industry. Nevertheless, intermodal growth for the third quarter of 2007 was the second-best quarter ever recorded during any three-month period, according to Intermodal Market Trends & Statistics, a quarterly report published by the Intermodal Association of North America (IANA).

The following are some highlights the IANA recently reported:

The total third-quarter volume of 3,618,617 loadings trailed only last year's third quarter, which came in at 3,699,544 units — or 2.2 percent better; The growth in the third quarter outperformed the second quarter of 2007 by 3.5 percent; Domestic containers for Q3 were 10.0 percent ahead of last year at 919,085; and All domestic equipment inched up 0.1 percent to 1.4 million units compared with third-quarter 2006 totals.

Overall, international intermodal traffic was 2,172,645, having fallen 3.7 percent from last year's third quarter. And domestic volume rose 0.1 percent in the quarter, reflecting "a change from recent years, when international traffic consistently rose at a rate of 6 percent or more, while domestic business increased at a slower pace," according to the IANA.

Through 2007's first nine months, total intermodal volume decreased 0.9 percent to 10.6 million units compared with volume handled during the same 2006 period.

Although there seems to be an uptick in domestic intermodal — occurring during a time when there is plenty of extra long-haul truck capacity, coupled with slumping retail sales and an ongoing decline in the housing market, among other economic factors — that does not necessarily indicate that domestic intermodal volumes will out-pace intermodal volumes anytime soon, noted IANA Vice President of Member Services and Business Development Thomas Malloy in a statement.

Intermodal transport reduces the number of hours truckers drive (improving safety) while also shrinking the economic impact because rail uses less fuel and is cleaner than trucking. Those factors contribute to helping the shipper's bottom line.

Looking ahead, Malloy recently told Logistics Management that the possibility of future intermodal growth is "saddled with the same type of market factors that is currently hindering the economic environment of North America, including the housing slump, poor retail performance and lethargic consumer spending, the automotive market, and housing-related imports."

Nonetheless, Peter Ladouceur of Canadian National Railway Co. recently told top transportation professionals at a conference entitled The Future of Intermodal Transportation in Memphis and the Mid-South: "Today the future is logistics."

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