Intermodal volumes surge

What is the impact of this increase?

As rising consumer demand continues to burden the supply chains, intermodal volumes are expected to climb to record highs.

While the majority of the shipping activity goes to trucking services, trends are showing higher than normal prices for rail services as well. As with other modes or freight transport, intermodal demand has been very strong since early summer of 2020 and is expected to continue well into 2022. According to the US Bank Freight Payments Index, money spent on truck shipments hit an all-time high in the second quarter of 2021, with limited capacity and rising fuel prices being major factors in the continued rate increase.

However, despite the much-appreciated increase in railway service demand, intermodal services are experiencing challenges with the continued surge in domestic and international volume. The large increase in volume has almost filled the capacity of the majority of North American railroads.

According to the Intermodal Association of North America, Intermodal volumes grew 20.4% year-on-year in the second quarter of 2021, making this the largest year-over-year increase since 2010. Intermodal volumes have grown for four consecutive quarters.

“Historically, intermodal has been a kind of overflow mode for shippers when trucking capacity becomes really limited, so I think that’s going to continue to be the case,” said Gerard Burke, chairman of the logistics and supply chain management department at Georgia Southern University.

It’s clear to see how the railways are benefiting from current conditions. Jeff Trombly, professor of supply chain management at the University of Tennessee in Knoxville said “Trucking rates have gone up so much that it gives an advantage for intermodal shipments.”

Like our team here at Aden Logistics, companies offering intermodal services are upbeat at the shift. We are dedicated to providing our customers with every available mode of transporting their loads to where they need to be.

CONTACT US today to see how our range of services can help you.