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Transport Topics | Intermodal Outlook Positive for 2018

09.29.17 | Ari Ashe

Intermodal transportation has rebounded this year after receding in 2016, and analysts forecast that next year also will be strong for the industry.

In 2016, total intermodal traffic declined 2.1%. International intermodal business fell 3.3% and domestic slipped 0.7%.

However, this year, intermodal has grown 3.7% year-to-date with international up 4.9% and domestic 2.6% better than 2016, according to FTR. The research group predicts 4.7% growth for the full calendar year, led by a 5.2% increase in international business.

While FTR intermodal expert Larry Gross forecasts a slight deceleration to 4.2% in 2018, he still presented a favorable report at the 2017 Intermodal Association of North America conference.

“Primarily, the pullback will be on the international side because we’re not convinced this current burst of activity on the import side will be sustained,” he said. “On the other hand, we feel domestic [business] will continue to be very strong. The full ELD effect won’t be felt until 2018 because they’re not going to enforce it in any real way until April.”

In the short term, Gross believes the transition to electronic logging devices will cause a ripple effect for owner-operators next year. Long term, he thinks most commercial fleets will adjust, although rates will remain above pre-ELD levels because fleets will be unable to compensate fully for the productivity loss. Historically, when over-the-road prices climb, shippers tend to look to intermodal rail to remain within their transportation budgets.

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