Surface Transportation
2025 Annual Review & Outlook
Chugging uphill
Strong 2024 sets international intermodal up for tough comparisons
By Ari Ashe
A look back : Thanks to strong import growth in Southern California , international intermodal demand from the US Southwest to the Midwest , Southcentral and Southeast surged more than 30 % year over year in the first 10 months of 2024 , according to the Intermodal Association of North America . Lanes that benefitted include Los Angeles to Chicago , Dallas , and Memphis . With the heightened demand , some familiar service issues resurfaced . Dwell times for ocean containers leaving the ports of Los Angeles and Long Beach by train , for example , rose to a two-year
Intermodal wins when trucks are more difficult and more expensive to procure and rail service is reliable .
high in September , according to the Pacific Merchant Shipping Association . There were also recurring delays on transfers inland at the Port of Tacoma , specifically for Union Pacific ( UP ) customers . Volumes of 53-foot containers on the same lanes climbed between 8 % and 12 % through October , leading domestic intermodal providers to institute their first peak season surcharges in three years . While the surcharges didn ’ t rise to the level of $ 5,000 per container — like they did in 2020 and 2021 — spot market rates rose $ 500 to $ 750 per box in Los Angeles and surcharges of between $ 250 and $ 1,250 per load were assessed on select shippers who exceeded their contractual allotments . Other major developments included new
The big picture : International intermodal volumes grew by double-digit percentages in 2024 thanks to a surge in freight to the West Coast ports , but those higher volumes caused issues getting ocean containers out of terminals . Domestic intermodal grew at a slower rate , and while there were service disruptions to and from Southern California , the delays were not as severe as for international cargo .
expedited UP trains from Los Angeles to Chicago in March and Canadian Pacific Kansas City , CSX Transportation and Schneider National announcing a joint Mexico – US Southeast intermodal service in December .
A look ahead : It ’ s difficult to imagine international intermodal growing much more — if at all — on the West Coast in 2025 . Volumes may grow more on the East Coast , especially once the International Longshoremen ’ s Association agrees to a new coastwide labor deal . International intermodal rose on key inland lanes to Atlanta , Chicago , Memphis , Nashville , and the Ohio Valley rose but only about 5 % to 7 %, which means the upside for 2025 is higher on these lanes . Lower growth in domestic intermodal may mean volume grows again in 2025 . The litmus test will be volumes in Chicago . While traffic from Los Angeles to Chicago grew , volumes from Chicago to Los Angeles and Oakland-Lathrop-Stockton were flat last year . Volumes from the Northeast , Southcentral and Southeast to Midwest were also flat year over year , including lanes such as Atlanta to Chicago , Dallas to Chicago , Elizabeth to Chicago , and Harrisburg to Chicago . As such , growing domestic intermodal in 2025 will necessitate winning more business on these lanes .
The next inflection : The strength of the trucking market will determine whether domestic intermodal can grow in the lanes that were flat in 2024 . Intermodal wins when trucks are more difficult and more expensive to procure , rail service is reliable , and environmental goals must be met . For some shippers , three out of the four of those conditions have been met , but they ’ re still using trucks because it ’ s easy to find capacity . International intermodal passed its inflection , so growing on the East Coast while maintaining current volume on the West Coast would be a win in 2025 .
email : ari . ashe @ spglobal . com
Domestic intermodal volumes out of the US Southwest grew 8 % to 12 % through October . Summer _ Wind / Shutterstock . com
70 Journal of Commerce | January 6 , 2025 www . joc . com