US intermodal rail traffic softens in September on supply chain woes

Supply chain congestion continued to dampen U.S. intermodal rail traffic in September, sending overall volumes lower for the month, according to the Association of American Railroads (AAR). The lower rail volumes come as the National Retail Federation (NRF) suggests that the congestion is denting the retail industry’s ability to process U.S. import volumes (see below). U.S. intermodal volumes for September were 1.33 million containers and trailers, a 6.7% decline from September 2020. 

“Rail intermodal volume is clearly not what it has been and could be,” AAR Senior Vice President John T. Gray said Wednesday. “Keeping intermodal terminals functioning smoothly and at full capacity depends on consistent freight outflows to make room for new freight inflows. Unfortunately, due to limited availability of downstream truck and warehouse capacity, that’s not happening right now with predictable impacts on rail intermodal volume.”

Gray continued, “There is no single solution to this problem but railroads are bringing intermodal yard capacity back online to increase storage availability as well as working with customers and truckers to accelerate container pickup among other efforts.”

U.S. carloads (in blue: RTOTC.USA), intermodal containers (in orange: RTOIC.CLASSI) and intermodal trailers (in green: RTOIT.CLASSI) graphed on a relative basis over the past year. (FreightWaves SONAR) To learn more about FreightWaves SONAR, click here.

In contrast to lower intermodal volumes, carload traffic rose 4.3% to 1.17 million carloads, amid a nearly 14% gain for carloads of coal and a 15% drop for grain and a nearly 28% decline for motor vehicles and parts. Altogether, U.S. rail traffic was down by almost 2% year-over-year in September to nearly 2.5 million carloads and intermodal units.  “Railroads continue to see improvements in carload business with a variety of industrial goods, including steel, paper, crushed stone and chemicals showing continued progress in September,” Gray said.

Meanwhile, U.S. retail import volumes could be even higher were it not for the supply chain congestion slowing the movement of backed-up cargo on both the West and East coasts, NRF said Thursday. NRF and consulting firm Hackett Associates produce a monthly report that analyzes U.S. import data. “The cargo is there for larger gains at several ports but congestion issues are impacting fluid operations,” NRF Vice President for Supply Chain and Customs Policy Jonathan Gold said. “Ships will eventually get unloaded but the pressure is on for everyone to work together to get the containers out as quickly as possible.”

Yet despite the backlogs, retail imports are still relatively high. NRF’s and Hackett Associates’ monthly global port tracker determined that U.S. ports covered by their report handled 2.27 million twenty-foot equivalent units in August, which is 3.5% up from July and 7.8% higher than August 2020. August’s volumes also tied with March as being the second-busiest month since NRF started tracking imports in 2002, NRF said.

First place goes to May, which saw 2.33 million TEUs handled during the month. NRF and Hackett anticipate September imports to be 6.7% higher year-over-year to 2.25 million TEUs. For the full-year, 2021 could total 26 million TEUs, which would be an 18% increase from 2020 as well as a record year. 

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