Digital Edition

July 6 2020

Issue link:

Contents of this Issue


Page 24 of 47

July 6 2020 | The Journal of Commerce 25 Land Lines Lawrence Gross INLAND POINT INTERMODAL (IPI), the movement of ISO containers with import and export cargoes on rail, is among the more volatile sectors of intermodal. Although the systems are massive and slow to change, clear patterns can be seen over time. The focus of IPI has been moving away from the US West Coast towards the East Coast and western Can- ada. Along with its implications for individual railroads, this shift brings shorter lengths of haul and diminish- ing industry revenue per move. IPI's share of the total intermodal pie peaked in 2006, when it accounted for 60 percent of all intermodal reve- nue moves, according to Intermodal Association of North America (IANA) ETSO data. Over the next seven years, this share fell rapidly to about 50 percent in 2013, as importers moved toward four- or five-corner port routing strategies even as domestic intermodal came into its own. Since that time, however, IPI share has remained within a narrow range, no lower than 49.9 percent and no higher than 51.5 percent. Thus far in the first five months of 2020, its share stands at 50.3 percent. IPI movements remain concen- trated in certain corridors. In 2006, the top 10 region-pairs accounted for just under 85 percent of all IPI moves. Thus far in 2020, the top 10 share stands just one percent lower. Although overall IPI share is rel- atively stable, the world within the IPI universe is anything but. There have been major changes, with win- ners and losers clearly visible. In the first five months of 2020, the Intra-Southeast IPI corridor has more than doubled its share, from 5 percent to over 10 percent, reflect- ing intermodal gains from the inland ports of Savannah and Charleston. This volume otherwise would have gone by highway. Intra-Mexico volume was not reported to IANA until 2014, when this market accounted for 4 percent of all IPI moves. It moved up to 4.7 percent the following year but since then has steadily declined to settle back in 2020 to where it started. Setting these two cases aside, most of the other corridors reflect the ongoing battle for control of the traffic moving into the US interior. The big losers have been the US runs off the West Coast into the Amer- ican interior. Midwest– Southwest (California) IPI flows have lost 4.2 percentage points in share since 2006, while South Central (Texas)–Southwest has declined an even larger 6.2 percentage points. Midwest–Northwest (PNW) has also been a big loser, with share dropping by over half from 9.2 percent in 2006 down to just 4.4 percent thus far this year. The two big gainers in this list have been Northeast–Midwest, reflecting the rise of all-water movements into the east coast (including NY-NJ, Phila- delphia, Baltimore, and Norfolk), and Midwest–Western Canada, due to the success of Canadian rail intermodal services connecting Vancouver and Prince Rupert with Chicago, prin- cipally at the expense of US Pacific Northwest ports. Obviously, this has created win- ners and losers among the Class I railroads. But even from an overall intermodal perspective, it's clear that the general trend is away from long-haul lanes and toward much shorter lanes. But simply tracking intermodal revenue loads provides only a partial picture. While revenue IPI move- ments were a modest 4 percent higher last quarter than 15 years prior, IPI revenue-miles dropped by over 10 percent during that time. Average IPI length of haul has declined from 1,634 miles in the fourth quarter of 2006 to 1,393 miles in the first quarter of this year. Some of the changes we have seen in the IPI sector reflect the always-fierce competitive battle between the railroads. But it's clear that many of these differences stem from large shifts in the intermodal environment over which the sector has very limited control. JOC email: Switching tracks Inland point intermodal flows show cargo shi away from US West Coast Although overall IPI share is relatively stable, the world within the IPI universe is anything but. Sarnia /

Articles in this issue

Links on this page

Archives of this issue

view archives of Digital Edition - July 6 2020