Intermodal providers

Intermodal providers might see a small bullwhip effect, in which international volume declines in May and June but rebounds in July and August as shipments delayed due to now-paused tariffs on Chinese goods begin arriving in Southern California.

The US’ second-largest intermodal carrier has not yet felt the effects of US tariffs on China but notes the delay in impact between the ports and the rails could take a few weeks.

As port volumes plunge along the West Coast, the downstream effects will likely be felt in the coming months, with softening demand to move freight into middle America on trucks and trains.

Relative stability may indicate that during the coming trade war, transloading could fare better than inland point intermodal, writes Larry Gross.

Insufficient volumes, including on the lane between the Port of Virginia and Memphis, have forced the railroad to reallocate resources to areas where it believes container business will grow in the future.

The companies say it is important to be agile with capacity deployment if there is a significant decline in volumes crossing the docks at Los Angeles and Long Beach amid the trade conflict with China.

But the largest US intermodal provider said customers have not yet meaningfully adjusted their freight forecasts, and shippers continue to tender the quantity of loads outlined in their contracts.

Damage from last fall’s Hurricane Helene continues to affect CSX’s operations in the Southeast, while the fast-tracking of construction work at Baltimore’s Howard Street Tunnel provides another challenge.

The expedited service will require terminals within the Northwest Seaport Alliance to load rail-bound trains within 48 hours of vessel arrival, significantly faster than the average dwell times of eight to 15 days experienced last year during a surge in container volumes.

The terminal operator says buying the railroad that connects ports on the canal’s Pacific and Atlantic sides fits into its overall strategy of offering more services to shippers.

The initiative, called RailGreen, will allow intermodal customers to purchase verified carbon certificates reflecting their use of lower-emission freight options.

The deal comes as the world’s largest container shipping company looks to establish a bigger foothold in surface transportation.

The port authority on Wednesday completed an expansion of Inland Port Greer ahead of the opening of the near-dock Navy Base Intermodal Facility (NBIF) at the Port of Charleston later this year.

Executives from CSX and Norfolk Southern say that while the market is no longer as strongly pro-shipper as it was a year ago, conditions have yet to shift in favor of rail carriers.

Domestic intermodal’s share of the US long-haul truck market has risen over the past two quarters, although that resiliency is going to be tested in the months to come, writes analyst Larry Gross.

Tariff concerns and fears of labor unrest helped grow volumes at key ports along the West Coast last month, with the gains coming at the expense of the Northeast and mid-Atlantic.

The latest Journal of Commerce Intermodal Service Scorecard shows how the performance of North American Class I railroads suffered due to congestion caused by high cargo volumes in Southern California and severe weather in the Southeast.

While trucking companies and intermodal carriers believe contract rates will rise this summer, shippers are skeptical given past predictions that have fallen by the wayside.

While tariffs and the trade wars that could result are indeed a serious matter, the direct effects of potential US tariffs on Canada and Mexico on the North American intermodal market would be “relatively minor,” writes Larry Gross.

In terms of raw dollars, intermodal shippers saved an average of $741 per container versus truckload for spot market transactions across the 120 lanes in the Journal of Commerce Intermodal Savings Index, up from $649 one year ago.

A spokesperson for NS says requiring truckers to have appointments to pick up containers at the Chicago facility allows for “stack grooming,” meaning it gives the railroad information in advance on which boxes to make available.

The planned development in Eastern Canada marks the latest stage in a nearly two-year-old partnership between the company and the Class I railroad.

The effort coincides with UP’s plans to open a new terminal in Kansas City, Kansas, in the third quarter of this year that would alleviate pressure on the railroad’s existing terminal across the border in Missouri.

The largest intermodal provider in the US says it’s time for shippers to talk about higher rates for service but understands the shift is not likely to occur until the second half of the year.

The Barstow International Gateway will be a transloading hub where the contents of ocean containers come to be transferred into 53-foot domestic containers to travel inland, ensuring quicker turnarounds of ocean boxes moving back to the ports of Los Angeles and Long Beach.

Projections for North American intermodal will likely be upended by some “black swan” event that isn’t even on the radar right now as there seems to be no shortage of potential hot spots and disruptors looming, writes Larry Gross.

Domestic intermodal providers are frustrated that they’ve been unable to win significant rate increases in contracts in early 2025, but capacity in trucking and rail is still abundant and easy to procure.

Despite the kudos for railroads, some market players question the value of pandemic-era comparisons, suggesting that 2024’s peak season aligns more closely with pre-pandemic trends.

It’s difficult to imagine international intermodal growing much more, if at all, on the US West Coast in 2025.

The considerable intermodal ocean volumes that ordinarily would have moved in 2025 have likely been pulled forward into 2024, writes analyst Larry Gross.

With a prolonged peak season, some non-asset-based intermodal marketing companies are reporting difficulties securing rail-owned containers and slots on trains in Chicago, Portland and Oakland over the past month.

DCLI equipping domestic chassis with GPS fills an information gap on when shippers sit on cargo excessively.

Rail executives assured investors that the availability of labor and other nearshoring opportunities in Mexico will keep North American trade strong, regardless of tariffs.

Rising regional trade along the old Silk Road between China and Europe is driving up containerized rail volume on the middle corridor and the logistics infrastructure is struggling to keep up.

While some shippers say they are still facing a measure of disruption, CSX says it has recovered following a rough patch in keeping cargo flowing through central Florida after hurricanes Helene and Milton battered the state.

The new charges apply to both spot market business originating in Southern California and to contractual agreements when weekly limits are surpassed by shippers using rail-owned containers.

Shippers, brokers and trucking executives at a Traffic Club of Chicago forum all said the long freight downturn isn’t finished — but are hopeful it’s nearing an end.

While intermodal providers increased pricing in Southern California, truckload carriers also raised rates as demand grew with surging port volumes, negating any modal shifts based on budgetary concerns, the latest Journal of Commerce Intermodal Savings Index showed.

A second intermodal option is coming for shippers moving cargo between Mexico and the Southeast US beginning in December.

Despite multiple highly disruptive exterior events, from hurricanes to labor strikes, there has not been an intermodal service meltdown in North America, writes Larry Gross.