For long haul freight moves, often defined as transporting freight more than 500 miles, intermodal rail transport is losing market share to trucking, despite its costs and environmental advantages.

Supply Chain Digest Says...   Some shippers simply decided the faster and more certain transit times via truck were worth the extra costs and much higher CO2 emissions per ton-mile of freight moved.     What do you say?   Click here to send us your comments       Click here to see reader feedback

That according to a report last week from the Wall Street Journal.

According to the weekly volume report from the Association of American Railroads, US intermodal rail car movements were down nearly 12% in the first six weeks of this year versus the same period in 2021. Intermodal transport involves moving shipping containers via rail for long distances, with trucks being used to bring containers to rail yards and picking them up for final delivery on the other end.

That drop to start 2022 comes after rail volumes fell in the second half of last year in an environment of strong overall freight volumes.

“Shippers are more often than usual choosing highways over railroads because shortages of labor, equipment and warehouse space across supply chains can create unpredictable delays,” the Wall Street Journal piece notes.

The move from rail to truck is still modest. Gross Transportation Consulting estimates that intermodal loads have lost a little over 1% of their market share to trucking since the Covid-19 pandemic began. But that small percentage loss still represents tens of thousands of containers per week that didn’t go on trains.

One big factor is an industry-wide shortage of containers, resulting in delays to move freight via intermodal.

Intermodal was doing well in the latter part of 2020 and through the first half of 2021. But then huge delays in processing containers coming from West Coast ports in summer months at the key Chicago rail yards was too much for some shippers.

The delays were the result of too many containers coming into the rail hubs. That then resulted in shortages of containers and chassis that further exacerbated the impact of the congestion.

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All that mess caused several rail carriers to for a period of time restrict container volumes into Chicago until the congestion was cleared.

Some shippers simply decided the faster and more certain transit times via truck were worth the extra costs and much higher CO2 emissions per ton-mile of freight moved. The desire to take time out of deliveries has increased as delays getting containers out of ports continue on.

But with rising truck volumes comes higher rates. Electronic load board DAT Solutions says spot rates on the Los Angeles to Chicago routes are up 59% year-over-year to a hefty $1.04 per mile.

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