Savings on the spot rate side of intermodal grew versus truckload in the latest Journal of Commerce (JOC) Intermodal Savings Index, while contract rate savings was flat - but remained strong in its own right. Intermodal spot rates were 23.4% below truckload in the second quarter of 2024, a record number for that time of year over the decade the index has been around.
The reason for the gap? A combination of still declining intermodal spot rates and rising truckload spot rates during May and June particularly. For comparison, spot rates via intermodal saved 17.4% vs. truck in the first quarter, and a year ago, the margin was even tighter at 12.6%. Authors don't expect continued growth on this front, as intermodal spot rates will likely begin to catch up to the truckload figures, which are continuing a steady climb relating at least partially to seasonality.
Contract rate savings stayed nearly flat both quarter to quarter, and year to year, coming in at 25.3% compared to their over the road counterparts - 0.2% less than the first quarter and 0.1% more than the same period in 2023. Unlike spot rates, forecasters expect the contract market to remain steady into 2025, with similar distance persisting between truckload and intermodal.
And steady suggests at best a status quo at figures that have declined quite a bit from the pandemic-related peak of 2022 - meaning a freight market bounceback still looks to be a distance away. General consensus indicates contract rates won't likely drop further over the next several months, but any rate increases for the next round of contracts next year should be well under 10%.
The better news side of the equation is continued growth in volume, even if it hasn't been a major jump. After a dip in April, Intermodal Association of North America (IANA) statistics show the number of domestic containers hauled at 2.07 million, slightly higher than last year, but below the 2.1 million of the same period in 2022. For the first half of this year, overall North American volume gained 4.2% over last year. Authors say if volume growth continues in that range, contract rate increases would be more likely in 2025.
Another positive also continued from the prior quarter, with service still looking good. While average speed for an intermodal train is down slightly (2.3%) from last year, it's still 5.5% higher than this time two years ago. And the average number of trains held per week (at 19) was unchanged from last year, but still 37 fewer than 2022.
For more information and commentary on the intermodal market from April to June of 2024, subscribe to the Journal of Commerce to read the full report.
Each quarter, the Journal of Commerce (JOC) releases its proprietary Intermodal Savings Index, which combines real data from the intermodal and truckload marketplace with forecasts and more. We provide statistics used in this valuable look at the intermodal market as it relates to truckload options. Find some of our contributions in our weekly Intermodal Spot Rate Pricing Trendline Analysis.
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