Commentary Land Lines
Missing the boom
By Larry Gross
Rosemarie Mosteller / Shutterstock . com
Why is there such a large disparity in demand for trucking and intermodal ?
Tracking intermodal rail volumes in the major North American geographies , one thing that catches the eye is the relatively poor performance of intermodal in the US-Mexico cross border market .
Cross-border steel-wheel revenue moves fell 8.5 % year over year in the first eight months of 2024 and have run behind 2023 levels every month so far in 2024 except for April , according to data from the Intermodal Association of North America ’ s ( IANA ) European Technical Standard Order ( ETSO ) database .
This seems at odds with news coverage speaking of a “ boom ” in the volume of freight crossing the border , driven by near-shoring and “ tariff washing ” of Chinese goods moving to the US via Mexico . What does the data say ?
Mexico-US intermodal volumes flagging as trucking booms
Loaded truck container crossings from Mexico to US , with year-over-year change
Year-over-Year % change
100 %
100 50 %
0 %
-50%
L Oct Jan 2023 Apr Jul Oct Jan 2024 Apr Loaded truck container crossings per month ( Right Axis ) Loaded truck containers Y / Y % change ( Left Axis ) Y / Y % change inbound intermodal revenue moves ( Left Axis )
Jul
900,000
800,000
1,000,000 700,000
600,000
500,000
400,000
According to the US Bureau of Transportation Statistics ( BTS ), the number of “ loaded truck containers ” — which includes dry vans , refrigerated trucks , flatbeds , etc ., both straight trucks and semis — entering the US from Mexico grew 93 % year over year in the first half , a clear signal that the market is indeed booming . But again , this compares with an 8.5 % decline in cross-border intermodal volumes , which begs the question : why is there such a large disparity in demand for trucking and intermodal ?
One theory is that there is a reporting issue in the IANA numbers . It is possible that volume is being trucked across the border and then put on the rails to travel farther inland .
But if that were the case , revenue moves out of the US South Central region would be rising quickly , and they aren ’ t . In fact , year to date through August , outbound South Central revenue moves have ticked up 1.2 %, a substandard performance compared with the 2.9 % year-over-year gain in total domestic volumes for the same period .
It could be an issue of capacity — i . e ., a lack of containers being made available in Mexico to load — due to the heavy imbalance between northbound and southbound traffic . Or it could be a lack of demand in a market where the current intermodal value proposition of service consistency , speed and savings versus truck is simply missing the target .
Either way , answering this question will be important for railroads and intermodal providers , as the cross-border market represents one of the major growth opportunities currently available to intermodal .
Source : Bureau of Transportation Statistics BorderCrossing / Entry Data © 2024 S & P Global email : lgross @ intermodalindepth . com
52 Journal of Commerce | October 21 , 2024 www . joc . com