The U.S. rail freight market presents a study in contrasts. While carload volumes show modest growth buoyed by select commodities, intermodal traffic continues to face persistent downward pressure. Recent data from the Association of American Railroads (AAR) reveals this divergence is intensifying, adding uncertainty to economic forecasts.
Mixed Performance in Carload Traffic
For the week ending August 19, total U.S. rail freight volume declined year-over-year. Carload traffic reached 228,972 units , marking a 0.6% decrease from 2022 levels. Yet within this overall decline, four of ten commodity categories tracked by AAR showed growth.
Automotive shipments led gains, adding 2,326 carloads for a total of 16,293 . Coal followed with 1,486 additional carloads , reaching 69,773 , while petroleum products increased by 781 carloads to 9,420 .
However, significant declines emerged elsewhere. Grain shipments plummeted by 3,541 carloads to 15,796 , forest products dropped 1,289 carloads to 7,683 , and other agricultural/food commodities (excluding grain) fell by 1,011 carloads to 15,638 .
Intermodal's Persistent Slump
Intermodal traffic fared worse, with container and trailer volumes totaling 249,881 units —a 4.6% annual decline . This sustained weakness reflects multiple headwinds:
Consumer demand softness from inflation and higher interest rates has reduced goods movement. Competition from trucking has intensified, while port congestion and supply chain disruptions continue affecting intermodal efficiency.
Year-to-Date Trends
Cumulative 2023 data through August 19 shows:
• Carload traffic: 7,394,978 units ( +0.2% year-over-year)
• Intermodal traffic: 7,828,854 units ( -9.2% )
This suggests carload sectors demonstrate resilience while intermodal struggles reflect broader economic cooling, reduced trade activity, and supply chain inefficiencies.
Sector-Specific Dynamics
Automotive: Chip shortage alleviation and production rebounds drive growth.
Coal: Remains vital for power generation despite renewable competition.
Petroleum: Global energy demand supports volumes, though geopolitics and price volatility pose risks.
Agriculture: Weather patterns, crop cycles, and trade policies significantly influence volumes.
Future Outlook
The rail freight sector faces transformative challenges from economic uncertainty, climate change, and technological disruption. Rail operators must enhance operational efficiency and customer collaboration while policymakers should prioritize infrastructure investment and balanced regulation to maintain competitiveness.