Intermodal Trucking Sees 2020 As Year Of Tough Laws, Cost Increases
Intermodal and drayage carriers are winding down a year that for many meant only modest growth in container trucking. On the international side, the National Retail Federation projected another record year for U.S. container imports, but it would amount to only a 1% increase in volumes over 2018. Domestic rail containers, meanwhile, saw a steeper drop of 4% from 2018.
As the industry looks toward 2020, there is hope among intermodal executives that container volumes will keep growing, albeit much of the growth may be in certain regions and for specific goods. Likewise, intermodal carriers want to see more done on the maritime link in the supply chain to improve efficiency. For its own part, container trucking will have to wrestle with a slew of regulations and cost increases that will require them to be more efficient as well.
Here are some views on how 2020 will shake out for intermodal.
The high water mark for drayage remains from 2018, when inbound international container volumes rose 6.5% and domestic volumes rose 5.5%. Against those tougher comparables, the 2019 peak season “was considerably softer than last year,” said Andy Garcia, executive vice president of Oakland, California-based GSC Logistics. “The forecast for 2020 is, at this time, somewhat flat, unless the tariff issues are resolved.”
The U.S. and China announced a preliminary truce in their trade war, a step that should give shippers more confidence, said Donna Lemm, vice president of national sales at Memphis, Tennessee-based IMC Companies. She hopes the truce can lead to more stability in international trade.
“We are very encouraged with the phase one announced agreement,” Lemm said. “The news is welcome not only for U.S. importers but for our agricultural exporters as well.”
But more normal trade relations with China are not likely to halt shippers from diversifying their manufacturing to other low-cost sources in Southeast Asia and the Indian Subcontinent. That trade shift, along with ongoing population shifts, are pushing up container volumes at Atlantic and Gulf Coast ports. To read more, visit Freightwaves.
Posted: December 20, 2019