Rail quietly wins the freight recession

While trucking argues about tariffs and shipping worries about Panama, America's railroads are having the best year almost nobody is talking about.

Association of American Railroads data for the week ending 15 August put total US traffic at 525,099 carloads and intermodal units, up 2.4 per cent year on year. Through 32 weeks, carloads are up 2.7 per cent and intermodal is up 3.8 per cent, with the combined total 3.3 per cent ahead of 2025. Eight of ten carload categories gained in the latest week, led by metallic ores and metals and nonmetallic minerals. Coal, as ever, went the other way.

The intermodal number is the one that matters. Railroads hauled a record volume of domestic containers in the second quarter, and shippers moving freight from truck to rail have been banking some of the largest cost savings the Journal of Commerce has recorded in its Intermodal Savings Index. That is the mirror image of the trucking story: as capacity left the truckload market and spot rates climbed above contract for the first time since 2022, the arbitrage swung decisively toward the boxcar.

Two forces should extend it. Panama Canal transit caps starting next week are expected to push more Asian cargo to West Coast ports, and the Port of Los Angeles is planning for a 5 per cent volume increase over the next six to eight months, freight that has to reach the interior somehow. On the other coast, inland rail terminals are already straining upward: the CSX-served Appalachian Regional Port in Georgia moved 4,800 containers in July, up 41 per cent on the year.

The regulatory overhang has not gone away. Union Pacific and Norfolk Southern must file unfiltered merger workpapers with the Surface Transportation Board by Friday, after regulators demanded the complete datasets rather than the screened versions submitted earlier. Opposition comments are due 18 November, responses in February, and a public hearing has yet to be scheduled. A final decision now looks likely in the second quarter of 2027, which is not the expedited timetable the applicants wanted.

Volumes, meanwhile, keep rising regardless of who ends up owning what.