Why more freight is moving back to intermodal

Intermodal market overview

Intermodal freight demand continues to build, with volumes consistently tracking above the five-year average. Domestic U.S. intermodal activity remained strong through July and August.

According to data from the Association of American Railroads, intermodal volume reached approximately 291,000 units during the week of August 15, an increase of 2.7% year-over-year (y/y). Year to date, total North American intermodal volume is running approximately 5.1% higher. The Intermodal Association of North America’s latest volume index also remained near its 2026 highs, indicating continued strength in domestic intermodal demand as long-haul truckload capacity tightens and rates rise.

C.H. Robinson’s new forecast is for spot truckload rates to be up 30% this year. Cost per mile continues to run above earlier expectations. While summer cost per mile had been projected to peak near $2.10, rates reached approximately $2.33 per mile in July. Depending on equipment type and operating model, many over-the-road carriers require rates of $2.70 to $3.25 per mile to maintain healthy profitability because of higher costs for insurance, diesel and driver wages.

These factors continue to widen the number of lanes where intermodal provides a compelling alternative to truckload.

Intermodal outlook for the remainder of 2026

Markets experiencing notable growth in intermodal demand include:

• Atlanta
• Chicago
• Dallas
• Houston
• Jacksonville, Florida
• Laredo, Texas
• Los Angeles
• Toledo, Ohio

As of mid-August, Union Pacific had identified several capacity-constrained markets and begun actively managing container reservations, with priority given to committed contract customers.

Shippers seeking committed contract rates from California, Texas, Chicago, and Salt Lake City, Utah, should expect limited availability. Given current network conditions, new long-term agreements are unlikely to begin before early 2027. In the near term, freight originating in these markets is likely to face higher rates and tighter capacity.

More broadly, intermodal adoption continues to expand nationwide. During the first half of 2026, shippers increasingly used intermodal solutions to offset rising truckload costs, improve network efficiency, and diversify capacity strategies. ACT Research reports the U.S. trucking industry has re-entered a driver shortage for the first time in approximately 3.5 years, further reinforcing the value of mode diversification.

Demand growth remains most pronounced in the 550- to 1,500-mile range, where freight that shifted to truckload during softer market conditions is now returning to intermodal.

Fuel cost impact

The U.S. average diesel price increased to $5.65 per gallon the week of August 24, significantly above roughly $3.71 during the same period last year.

Fuel surcharge programs tied to the U.S. Energy Information Administration index are adjusting accordingly, but an important structural distinction remains. Truckload fuel surcharges are generally calculated on a per-mile basis, while intermodal fuel surcharges are typically percentage-based and tied to linehaul rates.

Applying truckload fuel structures to intermodal movements can unnecessarily inflate transportation costs. Shippers that align fuel programs with intermodal-specific methodologies are better positioned to preserve savings during periods of elevated diesel prices.

Intermodal pricing outlook

Upward pressure on intermodal rates is building, particularly in high-utilization markets. But truckload pricing continues to rise at a faster pace, widening intermodal’s cost advantage across many lanes.

Committed intermodal pricing varies by region:

• West Coast outbound: Rates continue to rise rapidly, and new long-term agreements are unlikely unless they begin in 2027.
• Other regions: Moderate increases are expected, with pricing varying significantly based on local capacity conditions. Constraints involving both containers and drivers are beginning to emerge.
• 2027 outlook: Rail carriers are expected to continue raising contract rates as the market enters 2027.

Key strategies for off-cycle bids

Off-cycle pricing activity has increased as shippers respond to rising rates and coverage challenges. Many are turning to mini-bids to secure capacity and protect service levels. To improve outcomes, intermodal shippers should focus on the following actions:

• Identify lanes where extended transit times are acceptable.
• Implement blended mode strategies to reduce network volatility.
• Evaluate total landed cost rather than focusing solely on linehaul rates.
• Understand freight compatibility with intermodal transportation, including blocking and bracing requirements.

What to expect for intermodal service performance

Class I rail carriers continue to deliver strong and consistent service performance, including

• Fewer held trains
• Reliable train speeds
• Lower locomotive idle time
• Reduced terminal dwell times

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