US Intermodal Volume Jumps 12.6% as Diesel Prices Push Freight to Rail

U.S. intermodal volume surged 12.6% year-over-year in week 41, the Association of American Railroads reported Wednesday, as high diesel prices and tight truck capacity pushed shippers off the road and onto rail.

The pace is accelerating. Overall U.S. rail traffic rose 8.5% for the week, well above the 5.5% average recorded over the prior four weeks. North American intermodal climbed 10.8%, and total North American rail traffic gained 7.2%. The prior week's intermodal gain ran around 10% to 11%, so week 41 marks a build on consecutive double-digit weeks rather than a one-off spike.

"High diesel fuel prices and tight truck capacity has shippers diverting freight to rail," said Bill Stephens, who also noted that the vast majority of carload commodity segments were in positive territory for the week.

What does the surge mean for shippers and drayage?

The volume is already testing last-mile infrastructure. JB Hunt flagged the strain on its earnings call, saying it is struggling to attract enough drayage drivers to move containers to and from intermodal terminals. That's the practical bottleneck: rail can absorb the linehaul, but the container still needs a truck at both ends.

For shippers, that means intermodal savings on the fuel-heavy long haul may come with longer dwell or scarcer drayage capacity near terminals. For carriers and forwarders, the modal shift is a volume tailwind — provided the terminal-to-door leg keeps up.

Carloads: metals lead, forest products lag

U.S. carload volumes rose 3.5% for the week. The commodity picture was broad but uneven:

• Primary metal products: up roughly 25%, the standout, driven by coke traffic up 15.4%, metallic ores up 7% and iron and steel scrap up 9.1% — a signal of stronger steelmaking demand across both blast furnace and electric arc mini-mill operations
• Motor vehicles and parts: up 5.6%, a second consecutive weekly gain, though still slightly negative for the full year at -0.4%
• Agriculture and food products: up 6.7%
• Chemicals and petroleum: up 2.6%
• Coal: up 0.9%
• Primary forest products: the lone notable laggard, down 10%

Stripping out coal and grain — commodities treated as less economically sensitive — carload growth came in at 4%, versus 3.5% including them. Modest spread. But it points to broad-based industrial demand rather than a single commodity carrying the number.

Earnings week: what Wall Street expects

Analysts expect double-digit earnings-per-share growth at most Class I railroads for the third quarter. Norfolk Southern is the lone exception, with consensus estimates around 5.5% EPS growth versus the year-ago quarter.

The reason is competitive, not operational. Following the announced Union Pacific–Norfolk Southern merger discussions, BNSF and CSX unveiled new interline intermodal partnerships that have pulled some domestic intermodal business away from Norfolk Southern toward CSX. NS executives have acknowledged the dynamic is likely to persist, though they expect year-over-year comparisons to normalize as the railroad begins lapping last year's results.

Can the pricing hold?

On pricing, railroads have generally targeted rate increases one to two points above rail inflation. Fuel surcharge programs carry a built-in lag of roughly one to two quarters before fully capturing sustained fuel spikes. Stephens said there is "nothing to suggest" that pricing above cost inflation will change in the current environment.

That matters for shippers budgeting intermodal programs: if diesel stays elevated, surcharges will catch up over the next one to two quarters, and contract renewals will likely embed the above-inflation premium.

Earnings calls this week from CSX, Union Pacific and Norfolk Southern — followed by CN and CPKC next week — should show whether volume and pricing momentum holds into the fourth quarter.