Logistics Management | FTR Data Points to Decent Intermodal Market Outlook but Potential Policy Changes Loom
Intermodal market conditions were described as “in reasonably positive territory,” according to the most recent edition of the Intermodal Competitive Index (ICI) released this week by freight transportation consultancy FTR.
The objective of the ICI is to provide its viewers with an assessment of the competitive posture of domestic intermodal transport versus over-the-road truck transport, adding that it is a compendium of different factors, including relative rates vs. truck, industry capacity vs. demand, fuel prices and intermodal service levels.
As for how the ICI is gauged in terms of metrics, FTR said figures above 0 indicate favorable conditions for intermodal to compete with truck, and figures above ten show extremely favorable conditions that would result in substantial truck to intermodal conversion. Conversely, negative numbers indicate less aggressive modal share gains for intermodal - and potentially reduced share.
For December, the most recent month for which data is available, the ICI was 6.98, which was ahead of November’s 5.0 and October’s 5.26, with FTR noting that intermodal finished 2016 with decent momentum. And it added that the ICI is expected to see gains in the coming months as a result of what it called a robust rate environment, while cautioning there are also some tailwinds in the form of potential trade policy changes issued by the White House.
“About half of all North American intermodal volume depends, to a certain extent, on our international trade,” said Larry Gross, Partner at FTR and principal author of Intermodal Update, in a statement. “This includes cross-border movements and import/export movements, both in international containers and as transloaded cargo in domestic containers and trailers. As of today, we have not programmed in any potential effects from changes in U.S. trade policy, but such alterations could have a profound negative impact on intermodal prospects. Most damaging would be if we got into a tit-for-tat trade conflict with one or more of our worldwide trading partners, a prospect we still consider unlikely as of now.”
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