Intermodal Volume Unexpectedly Weak in July

16 Sep by Vitaliy Dadalyan

Intermodal Volume Unexpectedly Weak in July

FTR’s Intermodal Competitive Index fell more than three points from June to a reading of 0.6 in July, a large drop that nearly brought the ICI into negative territory.

Any reading below zero indicates a less-than-ideal environment for intermodal, while readings above zero are relatively favorable.

Intermodal volume was unexpectedly weak across the board in July with ISO container movements trailing behind import trends. Domestic intermodal was also anemic, according to FTR. Lower diesel prices were a factor in the decline in intermodal volume.

“Intermodal definitely is traversing a rough patch at the moment, with issues on both the international and domestic sides of the house,” said Larry Gross, partner at FTR and author of Intermodal Update. “Nevertheless, there is reason to believe that July’s numbers may have somewhat overstated the problem, since July 2016 had two fewer working days than July 2015 – a 9% difference.”

FTR expects to see a modest rebound into positive territory for the rest of the year, with a significant improvement waiting until 2017 as capacity tightens as a result of the ELD Mandate.

The ICI was designed to build on FTR’s Trucking Conditions Index and Shippers Condition Index, which take the temperature of other important aspects of the trucking industry. The ICI combines different factors, including relative rates versus truck, industry capacity versus demand, fuel prices and intermodal service levels.

Figures above 0 indicate favorable conditions for intermodal to compete with trucking. Figures above 10 show extremely favorable conditions that result in substantial truck and intermodal conversion. Negative numbers indicate less aggressive modal share gains for intermodal and potentially reduced share.

Related: For-Hire Freight Movements Hit New Record High Level

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Source:: http://www.truckinginfo.com/channel/fleet-management/news/story/2016/09/intermodal-volume-has-unexpectedly-weak-month.aspx