US Rail Freight Climbs 1.5% in 2025: Cautious Optimism for 2026

US rail freight volumes grew 1.5% in 2025, defying persistent concerns of an economic downturn and posting the second-highest intermodal traffic on record. Despite a slowdown late in the year, industry leaders and economists are expressing cautious optimism for 2026, pinning hopes on macroeconomic factors like potential interest rate cuts to stimulate demand.

Main Body:

Total U.S. freight-rail traffic demonstrated notable resilience throughout 2025, concluding the year with a 1.5% increase compared to 2024. The intermodal sector was a key driver of this performance, with volumes totaling 14.06 million containers and trailers. This figure represents a 1.5% rise over the previous year and marks the second-busiest year for intermodal traffic in history, surpassed only by 2018’s record of 14.36 million units. In the carload segment, railroads hauled 8.48 million carloads (excluding coal), a 1% increase from 2024 and the strongest performance since 2019. In a surprising show of strength, coal carloads also rose by 3.1%, underscoring their continued significance by accounting for over a quarter of all non-intermodal rail volume.

The annual growth figure, however, masks a story of two distinct halves. A significant portion of the year’s intermodal volume was concentrated in the first half, as retailers aggressively pre-ordered supplies in anticipation of potential tariffs on international goods. This front-loading of shipments created a surge that later gave way to a market lull. Data from the Association of American Railroads (AAR) confirms this trend, reporting that intermodal shipments declined for four consecutive months to end the year, with volumes falling 6.5% in November and 3.4% in December. This late-year softening reflects the direct link between intermodal traffic and consumer spending, which faced headwinds from inflation and interest rate pressures.

Looking ahead to 2026, the sentiment is one of cautious optimism. The industry’s performance will be closely tied to the financial health of the American consumer, hinging on factors like inflation-adjusted income, labor market stability, and monetary policy. Doug Waggoner, CEO of Echo Global Logistics, suggested that 2026 “could be a better year,” citing anticipated decreases in interest rates as a potential catalyst for stimulating manufacturing, housing, and consumer spending. This optimism comes after what Waggoner described as a “three-plus year freight recession.” However, the broader logistics market presents a more mixed picture, with research group FTR forecasting that trucking demand will likely remain relatively flat in 2026, continuing a multi-year slump in industrial freight activity.

Key Takeaways

• Resilient Growth: U.S. rail freight grew 1.5% in 2025, with intermodal traffic nearing an all-time high, showcasing the sector’s strength despite economic uncertainty.
• A Year of Two Halves: An early-year surge in intermodal shipments, driven by tariff-related pre-ordering, was followed by a significant slowdown in the final quarter of 2025.
• Conditional Optimism for 2026: The outlook for 2026 is positive but dependent on macroeconomic improvements, particularly interest rate cuts that could boost consumer spending and industrial activity.

Editor’s Analysis

The 2025 U.S. rail traffic figures reveal a sector that is both a bellwether for and a buffer against economic volatility. The near-record intermodal volumes underscore rail’s indispensable role in the retail supply chain, yet the sharp decline in late 2025 serves as a clear warning that the industry is not immune to macroeconomic headwinds. The divergence between the cautious optimism in rail circles and the more bearish outlook for the trucking market in 2026 is a critical trend to watch. It could signal a potential shift in market share or simply reflect the different sensitivities each mode has to various economic sectors. The unexpected resurgence in coal traffic also highlights the complex and evolving energy landscape, proving that legacy commodities can still play a pivotal role in freight volumes.

Frequently Asked Questions

What was the primary driver of high intermodal traffic in 2025?

The primary driver was an early-year surge caused by retailers pre-ordering goods and supplies to get ahead of anticipated international trade tariffs. This led to a front-loading of shipments, boosting the annual total significantly.

How did U.S. rail traffic perform at the end of 2025?

Despite strong annual growth, rail traffic slowed considerably at the end of the year. According to the AAR, U.S. rail intermodal shipments fell for four straight months, including a 3.4% decline in December, reflecting a market lull.

What is the forecast for U.S. rail freight in 2026?

The forecast is “cautiously optimistic.” Experts believe growth will depend heavily on the broader economy, particularly factors like interest rate cuts, labor market stability, and growth in consumers’ disposable income. While some industry leaders are hopeful, the outlook for the related trucking sector remains flat.