In the bustling freight corridors between the US and Mexico, a surprising trend has emerged: despite a surge in overall freight volumes, intermodal rail performance is not keeping pace. The latest data from the Intermodal Association of North America (IANA) reveals that cross-border intermodal rail volumes decreased by 8.5% year-over-year in the first eight months of 2024, diverging from the broader trend of booming freight activity.
This discrepancy is particularly striking given the overall growth in freight traffic, which has been bolstered by near-shoring and the influx of Chinese goods entering the US via Mexico, commonly referred to as “tariff washing.” While truck-loaded containers entering the US from Mexico saw a staggering 93% increase in the first half of the year according to the US Bureau of Transportation Statistics, intermodal rail has not mirrored this growth.
Several theories could explain this underperformance. One possibility is a reporting anomaly within the IANA data, suggesting that freight may be crossing the border by truck and later transitioning to rail further inland. However, this does not align with data showing only a modest 1.2% increase in outbound revenue moves from the US South Central region, a key area for such transfers.
Capacity constraints might also play a role. There could be a significant mismatch in container availability, exacerbated by the lopsided northbound versus southbound traffic. Moreover, the value proposition that intermodal rail traditionally offers—consistency, speed, and cost savings—may not currently align with market demands in this corridor.
The underutilization of intermodal solutions in such a dynamic market raises critical questions for railroads and intermodal providers. As the US-Mexico freight market continues to expand, understanding and addressing these discrepancies will be crucial for tapping into what remains a significant growth opportunity for the intermodal sector. This situation underscores the need for strategic adjustments to enhance intermodal rail’s appeal and performance in cross-border operations.
