The intermodal transportation industry stands at a crossroads, facing both unprecedented challenges and opportunities. After years of steady growth that seemed unstoppable, recent market data reveals a sudden shift in momentum. According to the Intermodal Association of North America's (IANA) Market Trends and Statistics Report , intermodal volumes experienced their first decline in 25 consecutive quarters, dropping by 6.1%.
Market Overview: Understanding Intermodal Transportation
Intermodal transportation refers to the integrated use of two or more modes of transport to move goods from origin to destination. This system leverages the strengths of different transportation methods—such as rail's long-haul efficiency and cost-effectiveness combined with trucking's flexibility for last-mile delivery—to optimize logistics operations.
Key Characteristics:
- Operational Efficiency: Optimized routing reduces transit times
- Cost Effectiveness: Lower transportation expenses through modal optimization
- Reliability: Reduced cargo damage and loss
- Sustainability: Lower carbon footprint compared to single-mode alternatives
Market Performance: Analyzing the Downturn
The second quarter of 2016 saw total North American intermodal volume drop to 4,271,162 units, marking a 6.1% year-over-year decrease. This reversal follows 25 consecutive quarters of growth, signaling potential market saturation or external economic pressures.
Modal Breakdown:
- Domestic Containers: The sole bright spot (+3.4% to 1,827,851 units)
- Trailer Traffic: Significant decline (-28.6% to 291,065 units)
- ISO Containers: Notable decrease (-9.3% to 2,152,246 units)
The trailer segment's dramatic reduction stems primarily from Norfolk Southern's restructuring of its Triple Crown Services, which discontinued most RoadRailer operations. Meanwhile, the unexpected ISO container decline—despite stable import growth—suggests shifting distribution patterns, including increased local consumption and direct trucking from ports.
Regional Variations and Competitive Landscape
Domestic container growth showed distinct regional patterns, with western markets outperforming eastern counterparts. IANA analysts attribute this disparity to heightened trucking competition in eastern short-haul markets. Meanwhile, Intermodal Marketing Companies (IMCs) reported contradictory trends:
- Highway Volume: +17.0% to 432,239 units
- Intermodal Volume: -18.1% to 408,868 units
This temporary shift toward trucking reflects current market conditions including excess capacity and low fuel prices, though regulatory changes and rising oil prices may reverse this trend in 2017.
Future Outlook and Strategic Recommendations
Several factors could reignite intermodal growth:
- Economic recovery stimulating consumer demand
- Housing market resurgence driving construction material shipments
- Trucking capacity constraints from new regulations
- Sustained strong dollar boosting imports
Strategic Priorities for Operators:
- Focus on domestic container growth , particularly in western regions
- Optimize network efficiency through advanced analytics
- Develop strategic partnerships with IMCs
- Invest in technology (IoT, AI) to enhance operational visibility
- Expand value-added services to differentiate offerings
Risk Management and Sustainable Development
The industry faces multiple challenges requiring proactive management:
- Economic volatility and trade policy uncertainties
- Regulatory changes affecting modal balance
- Technological disruption in logistics ecosystems
Sustainable intermodal development will increasingly emphasize:
- Carbon footprint reduction initiatives
- Digital transformation of operations
- Collaborative partnerships across supply chains
- Standardization of equipment and processes
While current market conditions present challenges, the fundamental advantages of intermodal transportation—cost efficiency, environmental benefits, and network flexibility—position it for long-term growth as global supply chains continue evolving.