The intermodal transportation market, long considered the "rising star" of logistics for its efficiency, cost-effectiveness, and environmental benefits, has recently shown signs of significant cooling. According to data released by the Intermodal Association of North America (IANA) and the Association of American Railroads (AAR), total intermodal volumes in September declined by 3.7% year-over-year - a notable reversal from previous rapid growth trends.
September's Chilling Numbers: The Data Speaks
Key metrics from the September reports reveal a concerning pattern:
- Total throughput decline: September's total intermodal volume reached 1,489,303 units, down 3.7% from 2018 levels - representing nearly 50,000 fewer shipments.
- Trailer transport collapse: Trailer volumes plummeted 19.1% to just 94,337 units, indicating weakening short-haul demand that may reflect broader economic conditions.
- Domestic container downturn: Domestic container shipments fell 3.9% to 625,332 units, suggesting weakening domestic trade activity.
- International container slowdown: ISO container volumes declined 1.3% to 769,634 units, signaling ongoing challenges in international trade.
Multiple Factors Converge: Understanding the Causes
Industry analysts identify several interconnected factors driving the downturn:
Trucking capacity rebounds: Unlike 2018's truck shortage, 2019 saw looser trucking capacity and more competitive pricing. When highway transport costs approach rail-competitive levels, shippers often prefer trucking's flexibility for door-to-door service.
Trade tensions take toll: Ongoing trade disputes have particularly impacted international intermodal flows. Gene Seroka, Executive Director of the Port of Los Angeles, warned: "The unwise U.S.-China trade war continues to severely disrupt American exporters and manufacturers. Our exports have declined for 11 consecutive months."
Industrial slowdown: Weakness in industrial production has reduced demand for machinery and auto parts transportation. CSX's EVP of Sales & Marketing Mark Wallace noted: "Industrial production remains very weak... this has affected significant intermodal volume."
Rail Data Confirms: Historic Quarterly Decline
AAR's complementary data reveals:
- September U.S. intermodal container/trailer volumes fell 5.9% (65,989 units)
- Weekly average intermodal originations hit 2016 lows (265,371 units)
- Q3 saw the largest quarterly decline (5.8%) since 2009's recession
- Year-to-date volumes remain 4.1% below 2018 (441,953 fewer units)
Despite this, AAR noted 2019's total remains the second-highest in history, suggesting underlying market resilience.
Expert Outlook: Short-Term Pain, Long-Term Gain
ABH Consulting's Tony Hatch suggests the downturn may be temporary: "Domestic intermodal's decline appears transient, potentially related to railroad management strategies beyond Precision Scheduled Railroading (PSR)... awaiting cyclical reversal and more rational trade policies."
Industry leaders are adapting strategies:
- Focusing on resilient consumer goods shipments (e.g., holiday e-commerce)
- Implementing operational improvements through technology
- Developing customized logistics solutions
Path Forward: Challenges and Opportunities
The intermodal sector faces a complex landscape requiring:
- Monitoring trade policy developments
- Enhancing rail efficiency through PSR and technology
- Expanding service diversification
- Investing in IoT, AI, and automation solutions
While current headwinds are significant, the fundamental advantages of intermodal transportation - efficiency, sustainability, and cost-effectiveness - position it for long-term growth as market conditions stabilize.