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October 2024 Industry Update: Intermodal
Intermodal rates have started trending higher as overall volumes remained resilient in September.
Spot Rates
Key Points
- The FreightWaves SONAR Intermodal Rates Index (INTRM.USA), which measures the average weekly all-in door-to-door intermodal spot rate for 53’ dry vans across a majority of origin-destination pairings, registered a 3.4% increase MoM, or $0.05, in September to $1.53.
- Compared to September 2023, intermodal spot rates were down 7.3% and were 20.1% below the 5-year average.
Volumes
Key Points
- Total loaded volumes for 53’ containers for all domestic markets, measured by the FreightWaves SONAR Loaded Outbound Rail Volume Index (ORAIL53L.USA), declined by 2.4% MoM at the end of September compared to the end of August.
- Total loaded volumes for 53’ containers in September registered 4.1% higher compared to both September 2023 levels and the 5-year average.
Intermodal Summary
Rail activity remained robust in September despite persistent economic challenges and competitive pressures from the struggling truckload sector. According to the latest report from the Association of American Railroads (AAR), U.S. railroads originated 1,117,166 intermodal containers and trailers in September, marking a 10.7% YoY increase from September 2023 and making it the second-highest month for intermodal movements in 2024, following August. However, total carloads excluding intermodal volumes saw a slight decline of 0.5% compared to September 2023, primarily due to ongoing softness in coal, crushed stone and nonmetallic minerals. Combined total rail volumes for September reached 2,031,385 units, representing a 5.4% increase over the same period last year.
Intermodal rates also began to show signs of improvement in September. Both contract and spot rates posted gains, with intermodal contract rates, which had remained relatively flat since Q2, rising 5.1% MoM, increasing by $0.08 to $1.65 from $1.57 in August. Compared to September 2023, intermodal contract rates were up 3.1% YoY and nearly in line with the five-year average, slightly higher by 0.5%. While intermodal spot rates also gained momentum in September, the limited upward movement indicates that intermodal capacity remains ample, and carriers continue to be competitive in expanding their market share. However, the increase in spot rates was not uniform across major markets. Southern California, for instance, saw a notable rise in rates driven by increased imports, while outbound rates from Chicago dropped by as much as 9%, leaving them approximately 25% lower than September 2023 levels.
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