United States rail carload and intermodal volumes saw declines to end 2025, according to the new edition of the “Rail Industry Overview (RIO),” which was recently published by the Washington, D.C.-based Association of American Railroads (AAR).
This free publication is issued monthly by the AAR and provides insights from AAR’s economists, regarding what rail traffic is saying about the current state of the economy, as well as where things may be headed. It also features a Freight Rail Index (FRI), which AAR said “tracks movement across the most economically sensitive rail traffic commodities,” including U.S. carload commodities (excluding coal and grain) and intermodal containers and trailers.
AAR Chief Economist Rand Ghayad told LM that the RIO essentially provides a summary of the key findings from the roughly 45 reports AAR produces for various industry stakeholders, with some of those reports geared towards those in the freight rail industry, as well as policy makers, and academics, with data and information coming from what he called a wide range of sources.
“Rail volume or rail traffic data in general is usually seen as a very important and solid indicator of what’s happening in the economy,” he said. “So, if you want to know how is the economy is going to be moving over the next couple of months, one way is actually to look at what’s happening in the rail industry. The whole idea of RIO is to summarize the findings from everything we’re putting out there and connect the dots with what’s happening in the economy. If the industry is doing well, it means the economy is on the right track. If the industry is not doing well, it means there are some concerns about how the economy is proceeding. It’s meant to be very easy to digest. It’s not meant to be very technical. It’s not meant to be only for, rail folks. It’s meant to be for everybody who’s interested to know about the economy, and mostly about how rail drives the economy.”
The December FRI saw a slight December decline, falling for the seventh time in the nine months, and was down 6.3% annually, with AAR attributing the recent decline to a slowdown in intermodal traffic.
December U.S. carloads fell 2.3% annually, seeing annual declines over three of the final four months of 2025, with seven of the 20 carload commodity groups it tracks up annually, paced by grain, steel-related products, and autos. For calendar year 2025, RIO observed that U.S. rail carloads saw a 1.5% annual gain, representing the largest annual gain since a 6.6% annual increase in 2001.
AAR pointed to sluggish U.S. manufacturing growth as a reason for what it called “relatively muted” 2025 carload growth, and it added that, “to the extent output remains sluggish in 2026,” that U.S. rail carload volumes will remain under pressure.
On the intermodal side, the report said U.S. rail intermodal shipments were down 3.4% in December, falling for the fourth consecutive month, while faring better than the 6.5% annual decline in November. For calendar year 2025, RIO noted that total U.S. intermodal volume, at 14.06 million containers and trailers, increased 1.5%, or almost 213,000 units, annually, marking the second-highest tally on record, trailing 2018’s 14.36 million. What’s more 2025 U.S. intermodal containers, at 13.65 million units, rose 2.4% annually, the highest annual reading on record, according to the AAR.
In its analysis of what could be coming in 2026, the report looked at from two different perspectives.
“An optimist would argue the goods-related side of the economy—what railroads care most about—is positioned for growth in 2026, supported by resilient consumer spending, renewed manufacturing investment, targeted reshoring and near-shoring efforts, and easing trade tensions,” said AAR. “A pessimist, however, sees a more challenging outlook, citing persistent inflation, an uncertain labor market, elevated interest rates, and uneven global trade as headwinds. Ultimately, rail traffic levels will be a function of which scenario takes hold, rising with stronger goods flows or stagnating if demand falters. In either case, thanks to capacity improvements and service enhancements, railroads are well positioned to support supply chain stability and reliability in 2026.”
