Passport Research: Intermodal Markets: Signs of life?

Intermodal volumes were stronger than their four-week trailing average in week 20, though still down 14% compared to the same period in 2019. Air pockets remain in containerized freight networks — there will be soft periods on a lag to demand going forward — but it seems clear to us that the bottom is in.

Barring a severe second wave of infections in the fall, we are increasingly confident that the worst public health and economic impacts of the coronavirus occurred in April. On April 14, Bank of America Merrill Lynch credit card consumer spending data bottomed; two days later, truckload volumes bottomed. Five days after that, daily coronavirus deaths in the U.S. peaked at 2,863 on April 21. All three metrics — consumer spending data, truckload volumes and coronavirus deaths — have steadily improved since those inflection points.

Deutsche Bank transports analyst Amit Mehrotra highlighted, in a lengthy, wide-ranging interview with FreightWaves published Tuesday, the fact that Europe is about one month ahead of the United States with regard to the pandemic and saw truckload volumes accelerate sharply in April.

To be clear, though, Mehrotra thinks that container imports will be challenged through September: “What we’ve seen so far is a supply-chain-driven decline in volumes. I think what’s coming is a second wave that is an organic-demand-driven decline in volumes.”