CSX’s Q2 2024 intermodal business saw a 5% increase in total containers, boosted by international shipments, while domestic containers declined.
CSX Corporation’s Intermodal business delivered mixed results in Q2 2024. Overall CSX’s intermodal business recorded an increase of 5% to 716,000 containers in Q2 2024, up from 677,000 containers over the same period in 2023.
CSX did not give a breakdown, but said its international container business increased due to “international shipments driven by higher imports through East Coast ports and inventory replenishments.”
Domestic intermodal containers, however, decreased due to what CSX called a “soft trucking environment”.
A trucking market where spot rates have fallen for several consecutive quarters is something all railroads and intermodal service providers have struggled with this year. While port volumes have been strong, the trucking industry has actually been struggling with lower demand compared to 2023 and rates have been falling.
Intermodal volumes for some of the Class I railroads have fallen over 2024 as trucking became cheaper. CSX, however, has seen its container numbers increase in Q2.
Kevin Boone Executive Vice President and Chief Commercial Officer, said the international intermodal market is “stabilising”, and CSX’s volume growth reflects strong import activity and favourable partnerships.
The domestic intermodal market, moving 53ft containers within North America, is more difficult. Boone said CSX’s sees “potential for modest domestic intermodal improvement, benefitting from incremental modal conversions, expanding partnerships, and new lane offerings”.
Growing revenue, however, is more difficult. While CSX’s intermodal volumes grew 5% in Q2 revenue did not keep pace, increasing by 3% to US$506m. “Persistently weak trucking rates continue to cap near-term pricing upside,” Boone said.
There might be some relief on the horizon in this area. Coyote Logistics, which UPS is now selling to RXO, Inc., for US$1.025 billion, publishes the “Coyote Curve” index of truck contracts and spot rates. In its outlook for Q3 2024 Coyote noted that its index has now started to increase closer to the rate of inflation, after having been flat for four consecutive quarters.
Coyote says motor carriers are getting similar spot rates to nine years ago, though their operating costs have increased substantially. “Simply put, there is no room for rates to drop, as many carriers have been running at unsustainable levels,” Coyote said.
With several bankruptcies in the industry over the last 12 months reducing supply, “it’s likely we’ll finally see this index head up as well in the coming quarter,” Coyote said.
*This story first appeared in the September print issue of WorldCargo News
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