Long-haul truckload demand is stalling as shippers pivot to rail, a modal shift that is dampening the trucking market even as total freight volumes rise, according to FreightWaves.
Modal shift underway
FreightWaves reported that intermodal use has grown 10% compared to 2025 for domestic-sized containers (SONAR: ORAILDOML), while long-haul tender volumes (LSTVI) are flat. The two modes have been moving in opposite directions since the middle of July, with truckload demand falling faster than seasonally expected. This suggests shippers are once again looking to escape the elevated costs and challenges of the trucking space by utilizing the rails.
Long-haul tender volumes are defined as tenders for loads moving more than 800 miles — the segment most fungible with intermodal and where rail holds the most significant cost advantage, according to FreightWaves. Total tender volumes are up 6% year-over-year over the past week, but long-haul tenders are the only segment that does not show annual growth. The LSTVI has also fallen to its lowest point of the year, which is unusual to see in August, especially as imports have been strong into the California ports.
Port gateways and intermodal lanes
The modal shift is concentrated on import-driven lanes. According to FreightWaves, around 30-40% of container imports arriving from overseas clear through the port complexes of Los Angeles and Long Beach, and much of that freight moves across the country to major East Coast cities.
Chicago, the largest market for domestic container shipping in the U.S., has had a 9% growth rate compared to last year, versus Los Angeles’s increase of only 3%. Atlanta, which gets fed by Savannah and Los Angeles containers, has seen over 20% growth in domestic container volumes, FreightWaves reported.
Rate differentials drive the shift
The primary driver appears to be a rapid increase in truckload costs. FreightWaves cited the following contract rate movements:
| Lane | Truckload contract rate | Intermodal rate |
|---|---|---|
| Chicago to Elizabeth, NJ | +31% (including fuel) | +5% |
| Atlanta to Elizabeth, NJ | +60% | +6% |
The primary driver appears to be a rapid increase in truckload costs.
These differentials are too great for many shippers to overlook, FreightWaves said. The takeaway for shippers, operators, and freight forwarders: any freight moving on these lanes that can reasonably convert to intermodal is a candidate for immediate rate relief, provided transit time flexibility exists.
Growing risks
While the cost savings are undeniable, FreightWaves warned that the spreads are unsustainable and rail infrastructure has its limitations. Rate increases are a certainty for intermodal carriers — they could raise rates into the double digits and still not risk losing business based on cost. The looming transcontinental merger may help hold rates down on some level until a ruling is made.
The market is not yet at intermodal’s peak season, which traditionally occurs in September and October. The rails have managed the additional demand stress so far, but drayage is a going concern with severe limitations tied to the same issues constraining longer-haul trucking, according to FreightWaves.
A third potential factor is a returning sense of urgency. There is little seasonal pressure on shipping in August compared to holiday periods, and back-to-school demand has largely already arrived. Inventory levels, especially on the downstream end, are tighter than they have been in recent years, as Dr. Zac Rogers, co-author of the LMI, discussed on this past week’s Freightonomics podcast. That could mean shippers are more exposed to unexpected demand shocks, which favors trucking over intermodal shipping.
Watch list
- Intermodal rate action: Expect carriers to test double-digit increases; watch for the transcontinental merger ruling that could temper pricing.
- Peak season: Intermodal volumes historically surge in September and October; monitor whether rails hold up.
- Drayage capacity: Last-mile trucking around intermodal terminals remains constrained by the same long-haul driver issues.
- Inventory restocking: Tighter downstream inventories could trigger demand shocks that favor truckload over rail.
FreightWaves wrote that while there is no doubt that the shipping community is doing the right thing in the moment, there are reasons to make sure they are prepared.
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