The U.S. Intermodal Rise
Intermodal rail makes a comeback in the U.S. market, and efficiency dynamics transform at Laredo Bridge.
As the logistics industry recalibrates, recent trends point to a significant shift from trucking to intermodal rail. Domestic intermodal loaded container volumes have soared to their highest since 2021, potentially signaling concerns for the already beleaguered truckload market.
Here's a snapshot:
- October Trends: A decline in long-haul truckload demand but a surge in domestic intermodal loaded container volumes.
- The Implication: Shippers are increasingly converting truckloads to rail, benefiting from improved services and decreased rates.
- Freight Dynamics: Most freight growth over the past six months involves long-haul freights, often exceeding 800 miles, commonly associated with imports—a prime example being the Los Angeles to Chicago route.
However, the pandemic's wake left the railroads grappling with congestion issues, especially around ports and rail ramps. Even though truckload rates had spiraled in 2020 and 2021, by early 2022, the rapid decrease in these rates led to diminishing discounts for shipping via rail.
Rail Improvements in Mexican Operations
On another front, efficiency improvements in CPKC’s operations in Mexico signal a positive turn after an inactive year. Key metrics such as terminal dwell times have seen remarkable improvements, especially in areas like Sanchez Yard.
Moreover, the industry's most significant international gateway, Laredo, underpins the railroad's advantage over trucks, as the former boasts faster transit times.
As rail continues to grow, the impacts on the trucking market could increase the speed of capacity exits, bringing quicker stabilization.