Another year brings more uneven market conditions for the freight rail and intermodal sectors. In recent years, those fluctuations were driven by pandemic-related volume shifts, followed by a partial rebound in some segments—as reflected in mixed results for 2022 and 2023.
That trend continued in 2024. U.S. rail carloads fell 2.4% year-over-year, according to the Association of American Railroads (AAR), marking the second-lowest annual total since 2020. In contrast, U.S. intermodal volume reached 13.84 million containers and trailers, making 2024 the third-highest year on record, behind only 2018 and 2021.
As for 2025, AAR data shows some early signs of improvement. Through May, U.S. rail carloads are up 2.5% year-over-year. May’s average weekly total was 224,000—slightly below March and April levels—but still reflects what AAR calls “a steady flow of freight on the rails.”
As for intermodal, total year-to-date volume through May—at 5.93 million containers and trailers—is up 6.7% annually, marking 21 consecutive months of annual increases. But that comes with the caveat that May barely grew, posting a 0.6% annual gain and the lowest percentage growth over that span, with the weekly average for the month (at roughly 259,400 units), marking its lowest reading in a year and in line with the 10-year average, according to AAR.
“Rail freight volumes in May 2025 tell a story of an industry navigating crosscurrents,” explained Rand Ghayad, chief economist at AAR. “On one side, carload traffic saw solid growth, reflecting resilience in key sectors of the domestic economy. On the other, intermodal container volumes barely eked out a gain, hinting at softening global trade and cautious consumer demand.”
According to Ghayad, mixed economic signals—from cooling manufacturing output to consumers pulling back on goods purchases—underscore the uncertainty facing railroads. “Recent data on factory activity, consumer spending, and housing all paint a cautionary picture for the coming months, even as the labor market remains a relative bright spot,” he added.
In addressing the current state of the rail carload and intermodal markets, the ongoing tariff and trade war as well as potential recessionary issues remain the primary themes, according to Anthony Hatch, principal of New York-based ABH Consulting.
“It’s debatable how much pull-forward activity there is in terms of if businesses and consumers are buying now due to tariffs, or if we’re at a period where everybody is just sitting on their hands because they don’t know what to do,” said Hatch. “We’re in some combination of those two conflicting thoughts. Volumes are OK. Intermodal volumes are too, but have seen some declines, indicating maybe that there was some pull-forward and that’s now over.”
Regarding rail and intermodal service, service activity remains under the purview of the Surface Transportation Board (STB), especially since its 2022 service hearings that focused on feedback from industry stakeholders regarding problems related to tight car capacity and unfilled car orders, delays in transportation for carload and bulk traffic, and ineffective customer assistance.
Subsequently, since those hearings, Hatch said that service has showed improvements and does not represent as much of a concern as it once did. What remains a larger concern, he said, is demand, for future volume growth.
