Intermodal Transportation Eases Capacity Constraints in Los Angeles Market

The recent surge in empty containers arriving by rail to Los Angeles signals a demand for goods exceeding container availability. This demand, driven by consumer goods shipped from Asia to the U.S., heavily relies on the Los Angeles port for entry before being transported eastward. This decades-long trade route creates a significant imbalance in transportation capacity, as resources are constantly strained by the westward flow of goods. Consequently, ships, trucks, and trains often return to Asia empty, lacking a natural mechanism to redistribute capacity. While this route saw increased shipping volume and strained trucking capacity earlier this year, recent data suggests intermodal transport is alleviating some pressure. This is evident in the stable truckload rejection rates and minimal spot rate increases despite a recent uptick in outbound shipment volumes from Los Angeles.