Trucking Companies Bet on Intermodal Growth

Posted on April 1, 2022.

Trucking companies are further expanding into intermodal operations for new avenues for growth.

“What we have seen, probably over the last few years, was market shares shift away from domestic intermodal to truck and international intermodal,” Citigroup analyst Chris Wetherbee told Transport Topics. “I think there’s an expectation for a few reasons that as this year plays out and we go into next year, that there is the opportunity for market share to shift back to domestic intermodal, supported by the rails, that will generate growth for all of these companies.”

Wetherbee noted the most important drivers of intermodal growth are supply chains unwinding, fuel costs and the environment. Environmental, Social and Governance (ESG) initiatives have become more popular due to customer demand and government regulations that have pushed more carriers to consider ways to be carbon neutral and fuel-efficient.

“You have the expectations that the railroads are going to start getting their operational act together after, let’s face it, over a year of disappointing results,” Cowen and Co. analyst Jason Seidl told TT. “Then, I think, there’s been a big push with companies looking at their own ESG scores.”

J.B. Hunt Transport Services plans to grow its intermodal fleet by 40% to as many as 150,000 containers in the next three to five years as part of a joint effort with BNSF Railway Co. Schneider National on Jan. 19 announced plans to expand its intermodal service by moving its primary Western rail partnership to Union Pacific Railroad.

“It’s clear that intermodal is an important growth engine, both for the railroads and as a method of how the shippers want to move their freight,” Bank of America analyst Ken Hoexter told TT. “And so, the carriers are trying to get improved service and improve fluidity in their network.”

Original Post: https://www.ttnews.com/articles/trucking-companies-bet-intermodal-growth