Shorter-haul Intermodal Declines in Importance

The share of domestic intermodal revenue movements accounted for by moves of 1,000 miles or less has declined in the past year, according to a recent analysis by FTR Associates.

Domestic intermodal equipment moving less than 1,000 miles accounted for 42% of total North American domestic equipment revenue moves, down 1% from the same period in 2009. Similarly, movements of less than 1,500 miles also declined in importance by 1.2% during the same period. Domestic intermodal equipment consists of trailers plus containers of 48 and 53 feet in length. The analysis is based upon Intermodal Association of North America (IANA) data.

"Given the recent emphasis placed on shorter-haul markets by major intermodal players and the eastern railroads, these results are somewhat surprising" says Lawrence Gross, senior consultant for FTR and author of the analysis. "The number of domestic equipment revenue movements of less than 1,500 miles in Q4 2009 was lower than 12 months earlier, even as such movements of greater than 1,500 miles increased."

According to Gross, the study also reveals another interesting factor. "Domestic intermodal is particularly weak in the 1,000 to 2,000 mile range. This accounts for a far lower percentage of movements than either the 750 to 1,000 mile range or the 2,000 to 2,500 mile range. We believe this is because most moves of between one and two thousand miles involve more than one railroad and the need to interchange impedes intermodal's ability to compete."

Source: http://logisticstoday.com/