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October 28 2019

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50 The Journal of Commerce | October 28 2019 Surface Transportation THIRD-QUARTER INTERMODAL vol- umes saw their sharpest decline in three years last quarter as the market showed no signs of bottoming despite the arrival of peak season. Although a number of Class I railroads and intermodal marketing companies declared this summer that a bottom was near, intermodal traffic dropped 4.6 percent in the third quarter, the steepest decline for the July–September period since 2016. "Volume has really been stagnant over the last three months," said Ron MacDonald, senior vice president of Cornerstone Systems, an intermodal marketing company. "We haven't really seen any major changes. The imports did not come in, and that has a big variance on the volume because of the transloading. "So overall, it's like we're in July and stuck in July," he added. July is considered part of the offseason in intermodal. The Class I railroads moved nearly 4.8 million containers and trailers in the third quarter, down from 5 mil - lion in the year-ago period, accord- ing to the Association of American Railroads (AAR). Every United States railroad finished the summer with less volume than a year ago for the second consecutive quarter. Inter- modal volume fell 3.6 percent in the first nine months of 2019 versus a year ago, according to AAR. Domestic intermodal business has led the poor market in 2019. Through August, domestic intermodal vol- umes had dropped 6.3 percent while international container business had risen 0.3 percent, according to the Intermodal Association of North America (IANA). The rolling three- month average, however, is much worse for all types of containers. IANA said domestic volume was down 8.1 percent and international volume 1.9 percent lower between June and August on a year-over-year basis. Union Pacific Railroad suffered a particularly sharp decline in the third quarter. The Class I railroad handled 912,852 containers and trailers, down 11.6 percent from 2018 and 3.4 percent lower than 2017. UP has issued a $200 surcharge on group rates, which small shippers can lock in as annual rates. UP hasn't imposed a peak season surcharge on large shippers this year. In comparison, UP applied a $1,250 peak season surcharge on excess freight out of Southern California in July 2018. The use of rail-owned 53-foot containers declined nearly 13 percent through August on both a year-to- date and quarter-to-date basis com- pared with last year. Trucking | Rail | Intermodal | Air & Expedited | Distribution Failure to launch Peak season US intermodal volumes disappoint By Ari Ashe Intermodal traffic dropped 4.6 percent to less than 4.8 million containers in the third quarter. "Volume has really been stagnant over the last three months; it's like we're stuck in July."

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