Intermodal Growth Raises Spectre of Congestion at Rail Ramps
Escalating trucking charges and tender rejection rates are boosting intermodal traffic in the US – but they also give rise to warnings of congested rail heads, which could trigger detention and demurrage charges.
Intermodal Volumes Show Mixed Trends
At a glance, intermodal traffic in North America is not having a stellar time. In Q1, aggregate volumes actually contracted 0.04%, to 4.54 million loads, statistics from the Intermodal Association of North America show.
That slight decline was due to weaker international flows. Domestic traffic actually rose 3.6%, to 2.3m 53ft containers and trailers, which continued a pattern seen in Q4 25, when overall intermodal volume was down 2% as a result of a 4.7% drop in international volume, whereas domestic containers were up 2.2%.
Trucking Market Pressures Fuel Shift to Intermodal
The momentum is continuing, thanks to the dynamics in the trucking market, where Washington’s push to weed out non-domiciled drivers and those with insufficient command of English, combined with business closures of truckers succumbing to economic headwinds, has brought about tightening capacity that has resulted in rising rates and tender rejections.
“Our intermodal business has good momentum, with tighter trucking supply and higher diesel prices creating tailwinds for freight conversions,” she said.
Maryclare Kenney, SVP and chief commercial officer of CSX
CSX’s intermodal volume was up 6% year on year in Q1, double its overall volume growth in the period.
As Ms Kenney noted, soaring diesel prices are adding to the momentum of the migration from trucking to intermodal.
According to Uber Freight’s market update for April, truckload spot rates were up 27% year on year that month, while contract rates climbed 5%-6%. The report also noted that intermodal rates typically lagged truckload pricing developments by three to six months.
Shippers Shift Mode for Long Hauls
CH Robinson highlighted a migration to intermodal in its March market update, noting that shippers were looking for the shift for distances between 550 and 1,500 miles.
At the time, the company commented that it was too early to determine if the rise in intermodal demand signalled the beginning of a sustained mode shift, or a temporary response to winter weather. Nevertheless, it urged shippers that intermodal transport “should be positioned as a strategic component of transportation planning rather than solely a contingency option”.
Concerns Over Rail Ramp Congestion
However, as it continues, the rise in domestic intermodal volumes is beginning to cause headaches over possible bottlenecks, notably at rail ramps.
“As shippers change modes from trucking to rail, to find relief from higher fuel costs, we could start to see congestion at inland rail ramps that challenge key entry points for many ocean containers in North America,” warned Paul Brashier, VP of global supply chain at ITS Logistics.
He is particularly concerned about Memphis, Chicago, Dallas/Fort Worth, and Atlanta – “The largest concerns are ramps with high outbound volumes,” he added.
While it is unclear how serious the impact on traffic could be, he warned shippers to brace for significant disruption. They should be prepared for post-Covid or 2014 congestion levels, he suggested.
Source: The Loadstar
Compiled from international media by the SCI.AI editorial team.
