North American Intermodal Freight Declines for First Time Since 2009

Intermodal freight shipments fell 6.1% in the second quarter, ending 25 consecutive year-over-year increases, hurt by fewer international and trailer shipments, the Intermodal Association of North America reported.
Total North American intermodal loads were 4.27 million, down from 4.55 million. Trailer shipments fell to 291,000, a 29% decline, in part because Norfolk Southern Corp. scaled back its Triple Crown trailer freight network. Domestic container freight rose 3.4% to 1.83 million loads, and international intermodal slipped 9.3% to 2.15 million.
The sharp decline in trailers was somewhat expected, the IANA report said, since the Norfolk Southern action was announced in September of last year. The decline is expected to continue in the third quarter and moderate in the fourth quarter.
In the international business, the decline was the largest since the fourth quarter of 2009, though part of the reason could have been 2015 port issues early last year that pushed some freight into the second quarter of last year. The trade group said the decline was a bit confusing since international freight trends typically correspond with global trade statistics that were more favorable than the IANA total.
The group sounded a more optimistic second-half tone, suggesting that international intermodal could grow as much as 3.3% in the second half to neutralize the drop in that freight during the first six months of 2016.
With consumer spending healthy and the dollar still highly valued, imports should strengthen in the second half, the report said, cautioning that high inventories could hold back growth. "Certainly, 2016 will continue to be challenging for intermodal demand. For overall loadings, there may be enough recovery in the second half to deliver an increase, albeit modest, for the full year."

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