CSX Transportation, Norfolk Southern, and Union Pacific executives touted strong domestic intermodal growth during an investor conference today, noting that volumes are now running above pre-pandemic levels.
UP’s intermodal traffic is up nearly 8% so far in the third quarter, boosted by double-digit percentage growth in parcel and truckload shipments due to e-commerce and the restocking of low retail inventory.
“Demand is at or near peak-season levels,” CEO Lance Fritz says, singling out strong volume from customers Amazon, UPS, and FedEx.
The sharp swing in demand — down in April and May, then up since June — caused congestion at some of UP’s intermodal ramps, Fritz says, partly because customers let boxes dwell at terminals for longer than they should have.
UP’s intermodal trip plan compliance fell 4 points, to 74%, for the third quarter to date but has been improving recently, Fritz says.
Mark Wallace, CSX’s executive vice president of sales and marketing, says intermodal volume is up 6% for the quarter to date.
CSX saw its domestic intermodal volume begin to rise in late June. “And that has carried on,” Wallace says. “The volumes have been very, very strong — much to our delight.”
“Clearly the consumer is back, the consumer is spending,” Wallace says, noting that e-commerce traffic has been particularly strong.
CSX’s intermodal on-time performance, measured by trip plan compliance, was in the low 90% range in the third quarter to date, down from around 95% before the pandemic hit. “We are focused on getting our service levels back to where they were pre-COVID,” Wallace says, noting that the snap back in volumes presented a challenge in putting furloughed train crews back to work quickly.
NS Chief Marketing Officer Alan Shaw says the railroad’s intermodal volumes are above pre-pandemic levels thanks to domestic volume related to e-commerce, tightening truck capacity, and strong rail service.
Shaw also touted the new interline domestic service NS launched recently with BNSF Railway and UP between the Southwest and Southeast, the two fastest-growing regions of the country.
The pandemic has accelerated growth in e-commerce and the way online shopping has disrupted supply chains, Shaw says. As a result, NS believes retailers will begin keeping inventory closer to consumers. And that is a “huge opportunity” for NS because it operates the largest intermodal network in the East, Shaw notes.