October 6, 2023

Rail intermodal volumes stabilize in September


September was the highest month in 2023 for U.S. intermodal traffic, finding support in the peak season, according to the Association of American Railroads.

U.S. freight railroads originated 1 million containers and trailers in September, a 0.7% increase from September 2022. Year-over-year (y/y) comparisons so far this year have had intermodal volumes trailing year-ago levels.

“Intermodal had the best volume month of the year in September, showing, after three years, that ‘peak season’ still exists although much more reserved and occurring somewhat later than past peaks,” AAR Senior Vice President John T. Gray said in a Wednesday release.

That increase, albeit relatively modest, lent support to overall volumes in September. Overall volumes rose 1.5% to 1.93 carloads and intermodal units. Carloads, meanwhile, grew 2.3% y/y to 921,716.

A comparison of intermodal container volume. (FreightWaves SONAR) To learn more about FreightWaves SONAR, click here.

Year to date, U.S. volumes total about 18.1 million carloads and intermodal units, a 4.3% decrease from the same period in 2022. Carloads are 0.3% higher, at nearly 8.8 million, while intermodal units are down 8.2% to 9.3 million containers and trailers.

BNSF’s plans to tackle harvest season

While intermodal volumes rose in September, grain volumes fell 9%, according to AAR.

Nonetheless, fall and winter are peak times to move grain volumes as producers harvest their crops for export, domestic consumption or storage. 

“Rail traffic, although improving, remains in uncertain territory along with the economy. … [But] grain shipments improved slightly from extremely low summer levels, while chemicals and petroleum products had reasonably solid months. However, a sustained boost across rail categories will require stronger overall industrial growth,” Gray said.

Year-to-date grain volumes are down 12.7% to 701,385 carloads, according to AAR.

Western U.S. Class I railroad BNSF expects to add 50 locomotives to its fleet to handle the volume increases that come around harvest season. BNSF (NYSE: BRK-B) also plans to add hoppers to the network and pre-position those where there might be greater need.

The railroad says it operates 382 grain shuttle trains, or trains that consist of 100-plus dedicated grain cars or hoppers, in the fall. Roughly 80% of BNSF grain volumes move by shuttle, the railway said in a mid-September update.

“At BNSF, we are extremely proud to be part of the agriculture supply chain and move grain all year to both domestic and global markets,” said Angela Caddell, group vice president of agricultural products, in an article on BNSF’s website. “Every year, we collaborate with customers, plan and position our resources to execute a successful ramp-up for the busy fall harvest.”

For the winter, BNSF will have a new rail-bound snowplow as well as additional switch heater upgrades with stronger blowers and reliable fuel sources. This equipment will also be placed in strategic locations in advance of predicted significant weather events, BNSF said.

The railway is also partnering with AccuWeather Enterprise Solutions to provide operations employees with weather information, and it will have a “Grain Desk” aimed at coordinating grain origins and destinations to BNSF’s operating departments. 

BNSF’s competitor Union Pacific (NYSE: UNP) expects some uplift for grain during the 2023 harvest season, according to an executive’s remarks at a recent investor conference.

“We had a bad harvest in 2022. It’s shaping up to be better for us in 2023,” UP CFO Jennifer Hamann said at Morgan Stanley’s investor conference on Sept. 12.

She continued, “I do think on the grain side of things, we’ve got the potential for some decent growth there, sequentially. Year over year, it’s probably still going to be a pretty tough comparison for us.”

U.S. grain carloads since 2020. (FreightWaves SONAR)

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Click here for more FreightWaves articles by Joanna Marsh.


The second annual F3: Future of Freight Festival will be held in Chattanooga, “The Scenic City,” this November. F3 combines innovation and entertainment — featuring live demos, industry experts discussing freight market trends for 2024, afternoon networking events, and Grammy Award-winning musicians performing in the evenings amidst the cool Appalachian fall weather.

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