DC Velocity - March 2010

Intermodal transport broke market share records against trucks in the fourth quarter of 2009, paced largely by giants in the international intermodal sector, according to a study released last month by FTR Associates.

Intermodal’s share of longhaul movements of international and domestic containerized freight—defined as 550 miles and longer—was 13. 3 percent in the fourth quarter, up 0.2 percent from the third quarter and slightly above the previous record set in the fourth quarter of 2008, according to estimates from the Nashville, Ind.-based research and consulting firm.

“Intermodal has gained share for three consecutive quarters” since the U.S. economy and freight volumes dramatically declined in the latter part of 2008, said Lawrence Gross, senior consultant for FTR.

Gross said the latest gains are being driven by international volumes, an indication that U.S. import and export volumes are rebounding faster than domestic traffic. Intermodal’s share of the domestic U.S. market, which had been growing during 2009, flattened out in the fourth quarter, Gross said.

Gross expects intermodal’s momentum to continue during 2010 as long as railroads maintain high service levels. He sees intermodal resuming domestic market share growth even as the international segment continues to rebound.

Intermodal’s gains could be over-the-road trucking’s loss. Shipments of U.S. trailers for heavy-duty rigs fell in 2009 by 44 percent from 2008 levels and to their lowest annualized levels since 1975, according to data from ACT Research Inc., a leading provider of analytical and forecasting data.

According to ACT, 78,000 trailer units were shipped in 2009. By comparison, 80,414 trailer units were shipped in 1975, when Gerald R. Ford was president and motor carrier deregulation was still five years in the future.

In a typical year with a relatively stable economy, about 180,000 trailers are shipped, according to Kenny Vieth, partner and senior analyst at Columbus, Ind.-based ACT.

Vieth said 100,000 trailers should be shipped in 2010 if economic conditions continue to improve. If the economy remains moribund, that number would be reduced to 90,000, he said.

Vieth said the poor economic climate in 2009 reduced demand for new trailers and compelled owners and operators to hold on to their old trailers longer than usual. The nation’s aging trailer fleet starts 2010 “one year older than it has ever been in its history,” he said in an interview.

A terrible resale market for old trailers further dampened demand for new equipment, Vieth said. The lack of aftermar-ket demand and rock-bottom resale values have made it financially non-viable for owners to unload their trailers, he said.

“No one is anxious to trade in their trailers,” Vieth said.

—M.S.

study: intermodal made record gains against trucks in Q4 2009

221

The number of cities in China projected to have 1 million or more inhabitants by 2025.

SOURCE: MCKINSEY GLOBAL INSTITUTE

short takes

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