AAR: No Single Solution to the Intermodal Problem

Written by Marybeth Luczak, Executive Editor
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“Rail intermodal volume is clearly not what it has been and could be,” AAR Senior Vice President John T. Gray noted in the association’s Oct. 6 rail traffic report, which found that September 2021 container and trailer volume dropped 6.7% from the prior-year period.

“Keeping intermodal terminals functioning smoothly and at full capacity depends on consistent freight outflows to make room for new freight inflows,” Gray pointed out. “Unfortunately, due to limited availability of downstream truck and warehouse capacity, that’s not happening right now with predictable impacts on rail intermodal volume. There is no single solution to this problem, but railroads are bringing intermodal yard capacity back online to increase storage availability [see “NS: Greencastle, Pa., Intermodal Terminal Going ‘Back Online’”] as well as working with customers and truckers to accelerate container pickup, among other efforts [also see “San Pedro Bay Ports to Speed Cargo Throughput”]. At the same time, railroads continue to see improvements in carload business with a variety of industrial goods, including steel, paper, crushed stone and chemicals showing continued progress in September.”

According to the Association of American Railroads’ (AAR) report, U.S. Class I railroads moved 1,167,682 carloads in September 2021, rising 4.3% (or 47,858 carloads) from the same month last year; and 1,328,527 containers and trailers, dropping 6.7% (or 95,317 units). Total U.S. carload and intermodal originations for the month were 2,496,209, down 1.9% (or 47,459 carloads and intermodal units) from September 2020.

(For August 2021 results, which were similar, see “AAR: Railroads Working to Keep Network ‘Fluid’”; for July 2021, see “AAR: Rail Volumes ‘Decelerate’ in July”; for June 2021, see “Rail Traffic Gains Build in 2Q21.”; and for May 2021, see “AAR: May 2021 Traffic Results ‘Encouraging.’”)

In September 2021, 15 of the 20 carload commodity categories tracked by the AAR each month saw carload gains compared with September 2020. These included: coal, up 40,954 carloads or 13.7%; crushed stone, sand and gravel, up 11,107 carloads or 12.5%; and primary metal products, up 8,675 carloads or 22.4%. Commodities that saw declines in September 2021 from the same month last year included: motor vehicles and parts, down 22,486 carloads or 27.6%; grain, down 17,312 carloads or 14.7%; and petroleum and petroleum products, down 1,616 carloads or 3.1%.

Excluding coal, carloads increased by 6,904, or 0.8%, in September 2021 vs. September 2020. Excluding coal and grain, carloads were up 24,216, or 3.5%.

Total U.S. carload traffic for the first nine months of 2021 came in at 9,009,639, a boost of 7.9%, or 658,222 carloads, from the same point last year; and 10,812,108 intermodal units, a 9.9% bump-up, or 976,362 containers and trailers, vs. 2020.

Total combined U.S. traffic for the first 39 weeks of the year was 19,821,747 carloads and intermodal units, up 9% from the same period in 2020.

Week 39 (Ending Oct. 2, 2021)

Total U.S. rail traffic for the week ending Oct. 2, 2021, was 515,849 carloads and intermodal units, falling 0.5% compared with the same point in 2020, according to the AAR report.

Total carloads for the week came in at 241,910, up 4.2% compared with the same week in 2020, while U.S. weekly intermodal volume was 273,939 containers and trailers, down 4.4% from 2020.

This is the ninth consecutive week of intermodal losses. For more on the decline, see “Week 38: Intermodal Drags Down U.S. Rail Traffic Totals, Again”“U.S. Intermodal: Drop-Off Spans Seven Consecutive Weeks”“Week 36: Intermodal Fall-Off Continues”“North American Rail Freight Up 9.2% Through 35 Weeks: AAR” ; “AAR: Railroads Working to Keep Network ‘Fluid’”“Week 33: Carloads, Intermodal Drop”“Week 32: Carloads Up, Intermodal Down”; and “Week 31: Is Intermodal Losing Steam?”

Chart courtesy of Susquehanna Financial Group. Sources: AAR, company reports, SFG Research

According to AAR, six of the 10 carload commodity groups posted an increase compared with the same week in 2020. They included coal, up 6,468 carloads, to 65,187; nonmetallic minerals, up 2,652 carloads, to 33,081; and metallic ores and metals, up 2,326 carloads, to 23,999. Commodity groups that posted decreases compared with 2020 included motor vehicles and parts, down 3,088 carloads, to 13,303; petroleum and petroleum products, down 610 carloads, to 9,827; and grain, down 534 carloads, to 26,007.

North American rail volume for the week ending Oct. 2, 2021, on 12 reporting U.S., Canadian and Mexican railroads totaled 340,442 carloads, increasing 2.9% from the same week last year, and 356,688 intermodal units, dropping 6.3% compared with 2020. Total combined weekly rail traffic in North America was 697,130 carloads and intermodal units, down 2%. North American rail volume for the first 39 weeks of 2021 was 27,026,291 carloads and intermodal units, up 7.9% vs. 2020.

Canadian railroads reported 81,835 carloads for the week, a 1% gain, and 70,024 intermodal units, a 9.2% fall-off compared with the same week in 2020. For the first 39 weeks of 2021, they reported cumulative rail traffic volume of 5,782,686 carloads, containers and trailers, up 5%.

Mexican railroads reported 16,697 carloads for the week, a 5.9% decline vs. the same week last year, and 12,725 intermodal units, a 25.7% decrease. Their cumulative volume for the first 39 weeks of 2021 was 1,421,858 carloads and intermodal containers and trailers, up 5.3% from the same point in 2020.

Categories: Class I, Freight, Freight Forecasting, Intermodal, News, Short Lines & Regionals, Switching & Terminal Tags: , ,