The North American intermodal market presented a complex picture in the second quarter of 2023, with robust domestic container demand offsetting persistent challenges in international shipping, according to the latest Intermodal Quarterly Report from the Intermodal Association of North America (IANA).
Mixed Performance Across Market Segments
Total intermodal volumes declined 4.3% year-over-year to 4.63 million TEUs (twenty-foot equivalent units) in Q2, though the rate of decline showed improvement from the first quarter, suggesting potential market stabilization.
Domestic containers emerged as the strongest performer, with volumes increasing 4.0% to 2.1 million TEUs. This growth reflects resilient U.S. consumer demand and companies' increasing focus on domestic supply chains amid global uncertainties.
In stark contrast, trailer volumes plummeted 25.2% to just 230,200 TEUs, marking their fourth consecutive quarterly decline and reducing trailers to a record-low 5% share of total intermodal traffic.
International container shipments decreased 8.4% to 2.3 million TEUs, though the decline moderated from Q1's 15.5% drop. These shipments continue to face headwinds from port congestion, pandemic-related disruptions, and chassis availability issues.
Diverging Domestic and International Trends
IANA President and CEO Joni Casey noted the unusual market dynamics: "While international container volumes actually exceeded domestic volumes this quarter—which is more typical—the year-over-year decline shows the ongoing challenges in global trade."
The domestic market's relative strength stems from several factors:
- Reshoring of manufacturing and supply chains
- Preference for containerized transport over trailers
- Improved rail infrastructure supporting intermodal efficiency
Peak Season Outlook and Economic Factors
Looking ahead to the traditional peak shipping season, Casey observed that while seasonal patterns persist, their intensity has diminished. "We expect more balanced freight patterns throughout the year rather than dramatic peaks and valleys," she noted.
Economic factors present both challenges and opportunities:
Key Challenges Facing the Market
The report identified several critical issues affecting intermodal performance:
1. Global Economic Conditions
Slowing growth, trade tensions, and geopolitical risks continue to pressure international trade volumes.
2. Supply Chain Disruptions
Port congestion, equipment shortages, and labor issues persist, though some bottlenecks have eased.
3. Pandemic Aftereffects
While COVID-19 impacts have diminished, potential new variants and regional outbreaks remain concerns.
Strategic Recommendations for Industry Players
The report suggests several strategies for intermodal providers navigating this complex environment:
- Enhance supply chain visibility and optimization
- Invest in automation and digital transformation
- Expand service offerings to create integrated logistics solutions
- Prioritize sustainability initiatives
- Develop workforce capabilities through training and retention programs
Long-Term Prospects
Despite near-term challenges, the intermodal sector maintains strong fundamentals for long-term growth. Industry observers cite several positive factors:
- Ongoing infrastructure investments
- Environmental advantages versus trucking
- Potential for technology-driven efficiency gains
- Growing preference for resilient supply chains
As the market continues to evolve, adaptability and strategic focus will separate high performers from the rest of the pack. The divergent trends between domestic and international segments highlight the need for tailored approaches to each market sector.