Trucking Slowdown? The REAL Reason: Intermodal Shift | Data Explains

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6}#fwtv_Z370pwhwSKo. fwtv-panel p{margin:0 0 12px}#fwtv_Z370pwhwSKo. fwtv-transcript p{margin:0 0 12px}SummaryView TranscriptTrucking volumes are down, but it’s not a slowing economy. Discover how a significant modal shift to intermodal rail, driven by inventory rebuilding and a substantial cost advantage, is reshaping the freight market.

We dive deep into SONAR data to explain exactly what’s happening and why railroads are winning share from long-haul trucks. Learn what this means for your supply chain and what to expect for Q4. Accepted truckload volumes are down 3. 3% year over year, but the culprit is not a weakening economy — it is a modal shift to rail.

Domestic intermodal container volumes are up 10% year over year, while long-haul truckload volumes have remained essentially flat, according to FreightWaves SONAR data cited during a FreightWaves analysis segment.

The divergence explains why brokers are seeing softer spot postings even as large asset-based carriers — both LTL and truckload — report firming volumes in channel checks.

The shift is being driven by two reinforcing factors: a 34% cost discount that rail holds over truck, as tracked by FreightWaves’ Intermodal Savings Index, and the absence of time pressure on freight moving into retailer distribution centers.

With retailers rebuilding inventories for the second half of the year after a period of tight stock levels, and with ports logging strong import volumes in recent months, shippers have months before the product is needed on store shelves — making slower rail a viable and cheaper option. “If you need the products right now, you move it by truck.

If you don’t need it for a few months, you can move it by rail. And you’re taking advantage of the 34% discount of rail versus truck,” said the FreightWaves analyst. Fuel economics are amplifying the spread. When fuel prices rise, intermodal fuel surcharges increase at a slower rate than trucking fuel surcharges, widening the cost gap.

However, supply chain reconfigurations to shift freight from truck to intermodal take time — which is why the initial fuel price increases seen in March did not translate into firming intermodal traffic until June, a roughly two-month lag. The American Association of Railroads’ weekly tonnage index, which FreightWaves covers every Wednesday, is up 4.

4%, corroborating the modal shift narrative. JB Hunt’s earnings were cited as a concrete benchmark for domestic intermodal strength, with the analyst pointing to the carrier’s domestic intermodal segment — described as the lifeblood of its intermodal business — as “very robust.” Hub Group was also flagged as a comparable beneficiary.

The modal gains are not expected to last indefinitely. As the calendar moves into October and November, time pressure around fourth-quarter restocking and the holiday rush typically pushes shippers back toward truck. Truckload demand is expected to firm in that window.

However, a note of caution was raised: because freight is already moving slowly by rail deeper into the country’s interior distribution centers, the usual late-year surge in trucking demand may be more muted than historical patterns would suggest.

Beyond transportation data, broader economic indicators support the view that demand itself is not deteriorating.

The ISM index is described as strong, the Logistics Managers’ Index shows inventory build beginning, and CEO channel checks across roughly 10 logistics sector executives per week on FreightWaves Today are consistently positive — with softness confined largely to certain food categories within CPG and restaurant retail, attributed more to GLP-1 drug adoption changing consumer habits than to macro weakness.

Domestic intermodal container volumes are up 10% year over year while accepted truckload volumes fell 3. 3%, pointing to modal shift rather than freight demand weakness. A 34% rail-versus-truck cost discount tracked by FreightWaves’ Intermodal Savings Index, combined with loose inventory timelines, is steering shipper decisions toward rail.

Truckload demand is expected to recover in October and November as fourth-quarter time pressure mounts, but the pre-positioned freight on ra