Rail Is Winning Freight From Trucks and Struggling to Move It

American railroads are getting the volume they have chased for a decade, and discovering they cannot run it at speed.

Intermodal traffic has climbed across all four US Class I systems as record diesel prices and firming truckload rates push shippers off the highway. BNSF is up 9.5 per cent, CSX 8.3 per cent, Norfolk Southern 5.1 per cent and Union Pacific 3.3 per cent. Every one of those carriers is simultaneously running its trains slower than it has in years.

Intermodal train speeds have fallen to multi-year lows across the board. BNSF and Union Pacific are at ten-month lows, Norfolk Southern near a twenty-month low, and CSX has hit a seven-year low. Terminals congest, cars sit longer, and the on-time performance that persuaded shippers to switch in the first place starts to slip.

The dynamic is familiar to anyone who has watched precision scheduled railroading run into a demand spike. Networks optimised for cost efficiency carry little slack, and slack is exactly what absorbing a surge requires. As one analyst put it, volumes are the enemy of speed.

The railroads are responding with crews. Norfolk Southern is recruiting at roughly half its terminals and CSX has moved to fill conductor positions, though training a conductor takes months that the current peak does not allow.

The contrast north of the border is instructive. Canadian National and CPKC are both carrying less intermodal freight and running faster for it.

The commercial risk is straightforward. Freight that moved to rail because trucking got expensive will move back the moment rail service becomes unreliable, and the carriers will have spent the upcycle proving they cannot handle growth, a record being written while regulators weigh whether a transcontinental merger would improve service.