Dive Brief:
- A year ago, the Association of American Railroads (AAR) exclaimed August 2017 was the best month in intermodal history. But last month shattered that mark with a new record, as railroads shipped 5.1% more containers and trailers than the previous high.
- Intermodal shipments rose to 1,442,920 units in August 2018, 70,198 more units than last year. Carloads also rose in August, reporting a 3.8% YoY rise in shipments to 1,386,026 units.
- The figures represent not just a year-over-year jump, but also a surge in this year's transportation volumes. In July, railroads transported just 1,108,142 intermodal units.
Dive Insight:
August is traditionally one of the strongest months for container transportation, as supply chains get their inventories in order ahead of the fourth quarter. It is no surprise volumes surged again this year.
By and large, the U.S. economy is doing so well it is bolstering rates and volumes across modes of transportation. June was among the strongest months for inbound container shipments at ports, and railroads are well positioned to move these goods. These trends are helping railroads rise with the tide, and with little additional work.
But there are other factors at play this year, which may be creating a sort of bubble in the data:
- As tariffs take effect, rumors abound that shippers are rushing shipments to avoid paying higher duties.
- The trucking market is tighter than normal thanks to stricter hours-of-service regulations, leading to more truck-to-rail shipment conversions.
The question today is: How much of the jump can be attributed to seasonal variations and general economic growth versus the other less predictable factors named above?
