CSX’s intermodal volumes
In recent weeks, CSX’s (CSX) intermodal traffic has been on an upward path. In the week ended March 25, 2017, its total intermodal traffic rose 7.3%. Overall intermodal volumes reached ~55,000, compared to 51,000 units in the week ended March 26, 2016. However, trailer volumes witnessed a ~10.3% fall.
The percentage rise in CSX’s overall intermodal traffic was in line with the rise reported by rival Norfolk Southern (NSC) during the same period. The rise in CSX’s intermodal traffic for the 12th week lagged behind the rise reported by US railroad companies overall.
Why intermodal matters to CSX
Key corridors such as Interstate 95, Interstate 90, and certain Southeastern US corridors drive growth in merchandise and intermodal volumes. CSX expects a 95.0% clearance for its double-stack container traffic on the East Coast at the end of 2017. Its new Carolina Connector terminal is expected to provide hub connectivity to additional lanes in the mid-Atlantic market.
For CSX, excess truck capacity is a deterrent to intermodal business growth. The company expects some short-haul volume losses in the domestic intermodal space over the next few quarters.
However, in 2017, CSX is hopeful that its implementation of trucking regulations such as the electronic logging device will tighten truck capacity. These regulations could lead to higher intermodal volumes in the future.
Railroad companies (GWR) are four times more fuel-efficient than trucks (JBHT). About half of the US rail intermodal volume consists of imports and exports. Railroads are also more environmentally desirable than truck freight transportation due to trucks’ heavy reliance on highways.