Freight Continues to Shift to Rail While Truck Rates Hold Firm

Long-haul freight is moving from truck to intermodal rail as diesel stays above $6 per gallon and truck capacity remains tight. Rail volumes are healthy, with carloads up for nine straight months and total rail traffic up 3.6% year-over-year in 3Q26.

Intermodal is the strongest growth segment, driven by record volumes and continued highway-to-rail conversion. Elevated fuel costs and limited new truck capacity make rail more attractive on longer lanes where service holds up.

Tight Truck Capacity Continues to Support Rates

The shift has not meaningfully lowered truck rates. Capacity constraints — regulatory pressure, rising bankruptcies, and fleets replacing rather than adding equipment — continue to support pricing. Spot rates remain well above year-ago levels even after modest weekly dips; dry van spot still trails contract, but the gap has narrowed. Tender rejections stay elevated (around 12–13%), well above historical norms, while soft-but-stable demand keeps the market from softening further.

Peak-Season Demand Limits the Shift to Rail

Peak-season demand limits how much freight can shift to intermodal. Rail network capacity is finite, and higher volume can increase dwell times and make service less reliable. When shippers need predictable delivery or shorter transit times, they may keep freight on trucks instead. That helps explain why the intermodal shift hasn’t pushed truck pricing down more sharply.

Spot-Market Activity Keeps Pricing Firm

Spot-market activity remains firm. Large shippers periodically place freight on the spot board when internal or contracted capacity is constrained. Walmart has done so during recent surges, adding temporary load volume without broadly pressuring rates. Load postings stay above five-year averages while rates hold. With high fuel, limited new truck capacity, and ongoing intermodal growth, pricing support is likely to continue into peak season even as more freight finds its way onto rail.