Intermodal growth accelerates as freight shifts from truckload

Market overview

Intermodal volumes continue to trend above historical averages, with steady year-over-year growth persisting through early 2026. While overall demand remains firm, the underlying driver is increasingly cost pressures in the truckload market shifting freight to rail rather than a broad-based surge in freight.

Diesel price volatility remains a key factor in transportation decisions. Based on the global oil market dynamics noted in our diesel fuel update, near-term relief is in question. Even as fuel is contributing to higher truckload rates, higher costs for insurance, maintenance, and labor continue to anchor carrier pricing at higher levels. This is reinforcing a structural cost floor across the trucking market, even beyond fuel.

Against this backdrop, intermodal is gaining traction across a wider set of lanes where cost stability and network efficiency outweigh transit-time sensitivity. With seasonal disruptions largely behind the market, intermodal demand is continuing to strengthen.

Looking forward, demand is expected to remain positive through June, with potential increases around the July 4 shipping cycle. The second half of the year will depend on how quickly trucking supply continues to tighten and how long fuel remains high.

2026 seasonal positioning

Market conditions in Southern California have stabilized following a muted 2025 peak season, supported by more consistent trade flows and improved visibility into tariff policy. Early May activity pointed to strengthening outbound demand from key origin markets.

Carriers and rail providers are already evaluating pre-peak-season shipment patterns, making early engagement critical. Shippers who had limited early-season volumes may encounter tighter capacity access and less favorable pricing as peak approaches.

At the same time, regulatory changes and fuel increases that are hitting California harder than some other areas of the country are accelerating shifts away from over-the-road freight. If current trends hold, the region is positioned for an earlier and more pronounced peak compared to last year.

Across the broader network, intermodal participation continues to expand as shippers rebalance their transportation mix. The re-emergence of driver shortages supports the potential for longer-term intermodal adoption.

Spot market dynamics

Intermodal spot pricing remains generally competitive, while divergence between modes is becoming more pronounced. Truckload rates are increasing at a faster pace than the measured movement of intermodal pricing. This widening spread is most evident across mid-length-of-haul lanes, particularly in the 550-to-1,500-mile range. Freight that migrated back to truckload during the softer market conditions is now incrementally returning to intermodal as cost pressures intensify.

Managing fuel surcharges

Fuel surcharges continue to adjust as diesel prices remain elevated, but structural differences between transportation modes remain critical. Intermodal fuel surcharges are generally percentage-based and tied to linehaul rates. Truckload fuel surcharges are typically calculated on a per-mile basis.

Misalignment between these structures can dilute intermodal savings if not managed carefully. Shippers that calibrate fuel strategies to mode-specific frameworks are better positioned to maintain cost advantages

Service performance

Service performance across Class I rail networks remains stable, supported by:

• Consistent train velocity
• Lower terminal dwell times
• Improved locomotive utilization
• Reduced congestion-related delays

While overall capacity remains sufficient, equipment positioning is emerging as a more prominent variable as regional demand patterns evolve and imbalances develop.

Intermodal pricing outlook

Regional pricing trends remain uneven.

• West Coast outbound freight is experiencing continued upward pressure, with limited opportunity to reset pricing ahead of peak season.
• Other regions are seeing modest increases in the range of 2–5%, largely aligned with inflation.

As procurement cycles advance, carrier relationships and rail access remain key differentiators in securing both competitive pricing and reliable capacity.

Key intermodal strategies for 2026

• Identify lanes where transit-time flexibility can unlock intermodal savings.
• Prioritize total landed cost over mode-specific pricing.
• Incorporate blended mode strategies to increase network resilience.
• Establish intermodal lanes earlier to secure capacity ahead of peak demand.

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