BLOOMINGTON, Ind. — Intermodal volumes and related rates are on the rise this year, buoyed by a strong U.S. economy, but a shortage of rail capacity is also pushing more of the freight onto trucks, FTR Transportation Intelligence reports.

“We’re still expecting healthy growth in rates, even in the back half of the year,” said senior transportation analyst Todd Tanausky, during a webinar on the topic.

While related shipments in 53-foot trailers have been dropping since December, monthly moves are still up by double digits when compared year over year, the analysts say. February’s trailer totals were up 19%, and January’s totals were up 16%. In contrast, February container shipments were up 8% over the same month in 2017, and January volumes were up 4%.

The international intermodal freight moved on domestic trailers is expected to increase 11.6% this year and 2% next year, FTR predicts. Domestic container moves are expected to rise a respective 6.4% and 5.8% in the same time periods. Overall, intermodal freight is forecast to rise 6% this year and 4% in 2019.

Canada’s railways have placed significant constraints on available intermodal capacity, though. Both CN and CP are counting on spring thaws to ease this winter’s delays, caused by the combination of unexpectedly high demand and extreme temperatures that have led to icy tracks and malfunctioning switches, which reduce train speeds and place limits on the number of railway cars that can be coupled. Railways across North America have reduced crew complements and locomotives to improve profit margins, too.

“We’re basically about a mile per hour slower than we were at this time last year,” Tanausky said, stressing that can play a significant role in traffic flows.

“Railroads have really focused on operating ratios for a whole host of reasons,” he added. As demand increases, however, it’s difficult to rebuild that capacity very quickly. Railroads can’t head to a local Walmart to buy a locomotive, and furloughed railway workers may not be waiting around for the call back to work, he said. In contrast, it can be easier to head to a truck dealership to add capacity to a fleet.

Shippers who face longer cycle times on railways also need more containers to move their goods, and that has shifted more freight onto readily available trailers, he said.

In the meantime, strong economic conditions continue to increase intermodal volumes.

“So much of what moves by intermodal is really dependent on consumer spending,” he said. Payroll employment is trending upward, bringing disposable income with it. “The economy’s growing, people are investing, people have money to spend.”

Retail spending continues to rise, and even U.S. home sales are still above where they were last year. And consumers buying the homes need to stock them with TVs, furniture, and other goods which move through intermodal traffic, Tanausky said. Automotive-related shipments have dropped in the wake of high replacement demand caused by hurricane-related damage last year, but parts are still moving.

Business inventories are also down from where they were earlier in the year, he said, referring to another factor that can drive intermodal volumes. “As people order things, they don’t necessarily have it in a warehouse.”

It all means that shippers may have to think about moving goods earlier than they traditionally have.

As with any projections, the numbers could shift. NAFTA negotiations could derail the automotive sector; rising interest rates and federal deficits could introduce their own issues; tariffs of any sort could throw things into disarray. “That’s a big deal for intermodal because most of what moves through intermodal comes from another country,” he said.

Tanausky thinks the risk of an all-out trade war is pretty minimal. He’s more concerned about the threat of NAFTA becoming a political football during U.S. midterms and an upcoming election in Mexico.