Surface Transportation
Trucking | Rail | Intermodal | Air & Expedited | Distribution
Outbound Southwest intermodal rates could rise more than in other lanes thanks to higher volume growth . Michael LaMonica / Shutterstock . com
three-month basis when September volume totals are released in mid-October .
But volumes from the US Southwest outpaced the national average , rising 7 % year over year to the Midwest , 12.4 % to the Northeast and 19.3 % to the Southeast during the same period . Those outbound Southwest lanes include Los Angeles to Atlanta , Los Angeles to Chicago , Los Angeles to Elizabeth , NJ , and Los Angeles to Memphis , Tenn ., all high-volume intermodal lanes .
“ We ’ d expect the rates to move in a similar direction .”
“ I think we ’ ll be in the low single digits nationally , but for the Los Angeles outbound lanes , contracts will probably go up by mid-single digits ,” said Savannah Flament , director of rail pricing for Matson Logistics , which serves shippers with a combination of Matson-branded containers and rail-owned containers . “ I could see in Los Angeles , we ’ re perhaps in the 5 % -to-7 % range .”
Rates might also go up slightly more than the national average in the Pacific Northwest because of a significant spike in port volume in Tacoma , which has resulted in recurring delays in Union Pacific Railroad ’ s intermodal network , as well as increased demand for domestic capacity .
Competition between rail and truck should remain heated for the local eastern US lanes . Intermodal routes in this corridor often save shippers no more than $ 500 per container , and in some cases less than $ 100 , according to ISI data , making it difficult to raise rail rates until the trucking market shifts .
Domestic container volume from the Southeast to Midwest — e . g ., Atlanta to Chicago — only rose 0.8 % year over year between June and August , according to IANA . From
www . joc . com
the Northeast to Midwest — e . g ., Elizabeth to Chicago and Harrisburg to Chicago — volume rose only 1.6 %.
“ The East Coast is one of the hardest regions for us to compete with truckload capacity , so we are hoping to see truckload contracts to go up in the east to give us some room to win business ,” said Sheila Weatherly , director of pricing for Knichel Logistics , a non-asset intermodal provider .
Pricing directors , however , noted that each shipper contract is unique , with numerous factors determining how intermodal providers will respond to bids .
“ My advice for shippers is to be aware of your network and understand that you might be paying a little bit more if you ’ ve got a lot of Los Angeles outbound business in your bid ,” Flament said .
email : ari . ashe @ spglobal . com
Contract truckload , intermodal rate decline continues in August
Average contract rates for US truckload and intermodal rail , in USD per mile
USD per mile
$ 2.1 $ 2.0
$ 1.0
$ 1.5
$ 1.0 L Jan 2023
Jul Jan 2024
Contract Truckload Shipper Rates Notes : Rates reflect an average of 120 lanes in truckload and rail
Source : JOC Intermodal Savings Index
Contract Intermodal Shipper Rates
Jul Jul , 2024
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October 21 , 2024 | Journal of Commerce 43
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