Commentary Land Lines

shortage, domestic intermodal’ s share has stair-stepped down several times, initially due to precision scheduled railroading( PSR) network pruning in 2019 and then service and capacity issues during the COVID-19 pandemic. Domestic intermodal originations were only 1 % higher in the fourth quarter of 2022 than they were in the second quarter of 2018. But over the same time frame, GDP increased over 10 % and long-haul truck moves grew 11 %.

As a result, domestic intermodal share tumbled from 7.2 % in the second quarter of 2018 down to 6 % in the fourth quarter of 2022. It remained roughly at that level for the next year and a half. Lost shippers, it appeared, were reluctant to come back to intermodal, especially given that good service and low rates were available over-the-road, thanks to abundant truckload capacity.

But now, that calculus appears to be changing. In the second half of last year, domestic intermodal market share improved for two consecutive quarters, breaking well above the 6 % threshold. While a 0.2 % or 0.3 % gain may not seem very impressive, if one goes back to domestic intermodal’ s golden era of growth, from 2008 to 2015, share also grew by about 0.1 % per calendar quarter. Supply chains don’ t turn on a dime. It was the ability of the sector to put together many consecutive quarters of slow improvement that did the trick.

Why is market share growing? Certainly, a very slowly improving truck market gets some of the credit. So too, intermodal service has improved from the dark days of the post-pandemic surge, and the system has displayed admirable resilience against the many recent disruptions. Further, some of the excesses of the PSR-related network simplifications have been reversed and new terminals and routes are being established.

This resiliency is certainly going to be tested in the

Domestic intermodal share picked up steam in H2 2024

Percentage share of domestic intermodal within the US long-haul truck market

Per 7.5

7.0 %

5.8 6.5 %

6.0 %

5.5 % Q4 2020 Q4 2021 Q4 L2022

Q4 2023 Q4 202

Market share

Notes: Long-haul trucking includes dry-van and refrigerated truckloads moving at least 500 miles.

Source: GTC, Transport Futures, ETSO Report

Q4 rolling average

months to come. A good chunk of domestic intermodal is transloaded international cargo, and where that market goes is anybody’ s guess right now. Plus, the cross-border markets are also operating under a cloud of uncertainty. The risk of stagflation— inflation plus slow or no growth— is rising with each new tariff threat and the departures of blue-collar immigrant members of the workforce.

But the domestic market is one of the only places where intermodal has an ability to control its destiny. Continued good service and sharp pricing will be key to maintaining the recovery in market share.

email: lgross @ intermodalindepth. com

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