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  April 29th, 2024 | Written by

US Intermodal Gains Momentum Amid Trucking Challenges

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Following a period of sluggish performance, US intermodal traffic is on the rise, signaling potential for further growth. Union Pacific’s new route between Chicago and southern California, along with the addition of on-dock rail service at the port of Houston, highlights the railway’s focus on capturing intermodal traffic from trucking.

Intermodal traffic in the US is up by 9% compared to the same period last year, with promising expansion expected in Mexico as well. Nearshoring and disruptions in cross-border trucking are contributing factors, leading to increased demand for intermodal transport.

Domestic intermodal services in Mexico have experienced significant growth, with a surge of 36% last year. The trend of nearshoring is expected to drive cross-border volumes, presenting opportunities for rail carriers to compete with trucking.

US rail carriers, like Union Pacific, are prioritizing network efficiency improvements to attract shippers currently using trucking services. S&P Global’s outlook suggests that rail carriers are poised to make substantial gains in business currently dominated by trucks, especially with the expectation of rising trucking rates.

The trucking market, particularly the truckload sector, continues to face overcapacity, leading to challenges for players like Knight-Swift Transportation and JB Hunt. Rising diesel prices further exacerbate the situation for truckers, especially smaller operators.

Overall, the rise of intermodal transport presents a competitive alternative to trucking, with rail carriers expected to capitalize on improved efficiency and rising demand for freight transportation.