Why Rail Is Booming: Intermodal & Carload Growth Explained

US rail traffic is surging, with intermodal and carload volumes hitting new highs. This isn’t just a few bright spots; growth is broad-based across nearly all industrial sectors, driven by tight trucking capacity and high diesel prices. Find out what this means for the broader industrial economy and if this “renaissance” is here to stay.

U.S. intermodal rail traffic jumped 10.4% year-over-year in week 40, while domestic carload volume rose 3.4%, producing an overall U.S. rail traffic increase of 7.2% compared to the same week in 2025, according to Association of American Railroads data cited by rail reporter Bill Stephens. North American figures were also positive, with carload volume up 2.6% and intermodal up 9.1% for a combined gain of 5.9%.

The numbers matter for carriers and shippers because they reinforce a durable industrial expansion, not a short-term blip. The AAR’s September and third-quarter Rail Industry Overview, released the day before the weekly data, found that 17 of 20 carload categories posted year-over-year gains in September and that chemicals traffic — the second-largest carload commodity — set a September record and is on pace for a new annual record.

Western railroads led intermodal growth, with BNSF up 12.5% and Union Pacific up 19.4% for the week, a performance Stephens attributed to record container volumes moving through the ports of Los Angeles and Long Beach and now pumping through the broader economy. Eastern carriers also posted solid gains: CSX was up 8.9% and Norfolk Southern up 5.4%.

“It’s nothing but tailwinds for intermodal due to the cost savings, partly related to the surge in diesel price, the tight trucking capacity. And the third ingredient there is that rail service seems to be holding up for the most part despite this volume surge,” Stephens said.

Motor vehicles and parts — a category that has lagged in 2025 — rebounded sharply, up 9.4% in week 40. Metallic ores and metals continued double-digit year-over-year growth, consistent with what the AAR described as manufacturing expansion that “took off at the start of the year” and “appears to be increasingly durable.” Excluding coal and grain, carload volume was up 5.6% for the week. Coal was down 2%, while grain edged up just 0.5%.

The AAR flagged one risk: if diesel prices remain elevated long enough, consumer spending could soften. For now, consumer goods spending was up 2.7% in August, according to the AAR. Stephens noted that inflation data is beginning to broaden beyond gasoline into food prices, a trend worth watching for consumer-dependent freight segments.

On the regulatory front, parties are filing their intent to participate with the Surface Transportation Board in the Union Pacific–Norfolk Southern merger review. Stephens said that STB board member Richard Kloster drew attention when the board accepted the merger application, calling for stronger data and better arguments — comments Stephens characterized as likely reflecting broader board sentiment rather than a political maneuver. Further detail is expected when both railroads hold earnings calls, with questions anticipated on conditions being sought by other railroads and on Kloster’s remarks.

• U.S. intermodal rail traffic rose 10.4% in week 40, led by BNSF (+12.5%) and Union Pacific (+19.4%) on record West Coast port volumes.
• AAR’s September report found 17 of 20 carload categories grew year-over-year, with chemicals traffic setting a September record and on pace for an annual record.
• Elevated diesel prices and tight trucking capacity are sustaining intermodal momentum, but railroads warn prolonged fuel inflation could eventually weigh on consumer spending.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.