Retailers and manufacturers are increasingly using intermodal shipping as higher truck costs, tighter capacity and improved rail service reshape freight decisions across North America.
By yourNEWS Media Newsroom
American retailers and manufacturers are shifting more freight back onto railroads as trucking costs rise and capacity tightens across North America.
The renewed interest is focused on intermodal shipping, a freight model that combines rail transportation with truck delivery for the final leg of a shipment. The system has long been used by companies trying to cut transportation costs, but many shippers had favored long-haul trucking in recent years because of its speed, flexibility and simpler routing.
That balance is changing as truck rates move toward their highest levels in nearly four years, The Wall Street Journal reported Monday.
Freight executives said the move toward intermodal service is being driven by higher fuel prices, a smaller trucking workforce and improvements in rail reliability. Those conditions have prompted companies to reassess how they move goods between factories, warehouses, ports and stores.
“Everybody’s exploring intermodal,” said Milton Magos, vice president of Mexico operations at freight brokerage Traffix. “They want to know how they can make their supply chain more reliable.”
North American intermodal traffic rose about 6% in May compared with the same month last year, reaching 369,000 containers and trailers per week, according to data from the Association of American Railroads.
The increase was the strongest year-over-year gain since March 2025, when businesses moved quickly to bring in imports ahead of expected U.S. tariff increases.
Intermodal freight still carries tradeoffs. Shipments can take longer than truck-only routes, and the process often requires coordination between railroads, trucking companies and terminal operators. Freight can also be delayed at rail yards and transfer facilities, while containers may face theft risks while waiting to move.
Even with those challenges, the cost gap has become harder for shippers to ignore. Rail transportation is generally more fuel-efficient than trucking and can offer meaningful savings, especially on longer routes.
“The rising cost to transport goods via truck has forced more and more folks to think about whether intermodal is a viable alternative,” said Mark Yeager, CEO of Redwood Logistics. “Those savings start to look more like 10%, 15%, 20% potential.”
The price difference is significant. The average U.S. intermodal spot rate was $1.16 per mile for the week that ended June 16, according to intermodal-service provider InTek Logistics. The average spot rate for standard long-haul trucking was $3.05 per mile for the week that ended June 13, according to DAT Freight & Analytics.
Trucking companies are also emerging from a prolonged freight downturn that left carriers dealing with weak demand and excess capacity. Industry officials said many trucking companies exited the market over the past year, reducing the number of available operators just as demand begins to shift.
Capacity has tightened further as the Trump administration cracks down on foreign drivers, according to industry officials. The impact has been especially noticeable along the U.S.-Mexico freight corridor, where some carriers report difficulty finding drivers willing to take cross-border routes.
Magos said immigration enforcement concerns have made some drivers less willing to accept deliveries that involve crossing the border.
“Drivers are not necessarily willing, or as willing as in the past, to go and do these deliveries,” Magos said. “This is tightening capacity.”
Railroads and logistics companies have spent recent years trying to make intermodal service more competitive by improving shipment visibility, reducing transit times and investing in technology. Those upgrades have helped persuade more companies to consider rail as a longer-term part of their supply chains rather than a short-term cost-saving option.
J.B. Hunt Transport Services reported record domestic intermodal volumes in the first quarter. Company executives told investors that many customers initially turn to rail for savings, but improved reliability is encouraging them to keep using the service.
In 2023, J.B. Hunt and BNSF Railway launched a service designed to deliver freight one day faster than traditional intermodal options.
Schneider National has also reported stronger demand for intermodal service this year.
“As reliability has strengthened, more shippers are increasingly viewing intermodal as a viable, cost-effective complement to over-the-road freight,” said incoming Schneider CEO Jim Filter.
The shift does not mean rail is replacing trucking. Intermodal service still depends on trucks for pickup, final delivery and short-haul movement. But higher trucking rates, tighter driver availability and better rail performance are making the railroad a more attractive option for companies seeking cheaper and more stable freight networks.
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