INTERMODAL

west coast port complexes. Somewhat concerning for overall intermodal growth is the lack of trailer conversions to container freight.

FTR Transportation Intelligence notes rail rates for intermodal freight are expected to decline on a year-over-year basis during the first three quarters of 2023 before turning up slightly as the peak season ramps up.

This will be in sharp contrast to the outlook for carload rates which are expected to see increases remain in the mid-single digits and possibly higher.

Carriers have been steadfast in their focus on rail inflation-plus pricing in recent years and there is no sign that will change any time soon. In fact, that focus is likely to be even more intense in the wake of last year’s labour agreement which will lead to higher employment costs for the carrier over the life of the agreement.

Most have already made the sizeable back-pay payments required under the retroactive aspect of the agreement.

As carriers move toward local negotiations, the costs of the contract may continue to rise due to additional paid time off. Those costs will ultimately be passed on to shippers in the form of higher rates, concludes the transport consultants.