We’ve apparently been in a freight recession for two years now, but rail intermodal is having a strong growth year, aided by an easy comp against 2023, which was the weakest year for U.S. intermodal loadings since 2013. Total U.S. intermodal loads are up 9.4% YTD and 9.7% QTD in 3Q24.
BNSF leads with 17% YTD growth, Union Pacific is up 6% YTD but +13% QTD after catching a recent surge, Norfolk Southern has grown loads by 8%, and CSX is up 5% YTD. In contrast, U.S. YTD non-intermodal loadings are down 3.4%, propelled by the latest step down in coal to the tune of -14.5% YoY.
Strong intermodal growth is of course a good thing, but rail networks don’t like surprises, so we’re wary of backslides in operating efficiency, which we’ve predictably seen. Most of the damage has been in the west, where BNSF and UP intermodal network velocities are mired in the bottom quartile of historical performance. CSX and NS are doing better, due mainly to materially less volume pressure.
With that as a backdrop, Labor Day was a welcome reprieve from this volume pressure. In the chart below you can see the impact it had on the intermodal networks of the four U.S. Class I’s. Compared to the week prior, volumes in the week ending Sept. 7 were between 7% and 12% lower, and this breathing space allowed BNSF’s intermodal network to accelerate by 4%, CSX by 3.3%, and NS by 3.2%. Union Pacific’s reaction—or lack of—was odd, as the network didn’t materially accelerate as loads backed off 7%. We can’t explain it, but UP is hosting a tour of its Dallas intermodal terminal on Sept. 18 as part of its Investor Meeting, so we’ll ferret out the answer then.
Regardless, the point is that Labor Day and its associated volume-light week came at a helpful time in terms of intermodal network health, which most of the networks exploited, although there remains a lot of work to do in the West to get these boxes cycling faster.
