Rates primed to rise, secure contracts now
Intermodal pivot point
Intermodal volumes through February were slowed by weather and an early Lunar New Year, but still managed an 8.4% year over year (y/y) increase on domestic freight. April and May will be critical months in telling the volume trends for 2025. Most models do not expect this pace to continue, projecting volumes to gradually decrease to the point where Q4 growth is flat to down, with 2025 looking like it will finish between 2-3% growth.
Intermodal volume drivers and risk
Many importers pulled orders forward to keep costs down before new tariffs. That pre-tariff inventory is mostly into the market at this point. What remains to be determined is how much more additional inventory importers will build up.
Tariffs will be a key factor in how hot the market continues to be in 2025. While there is uncertainty around long-term effects, there may soon be a downturn in imports caused by inflated inventories and decreased demand.
If that occurs, it will be a key point in determining the landscape for the remainder of the year. It is possible these effects could be felt later in 2025 or even into 2026 due to long buying and stocking cycles.
Preemptive cost-saving opportunities
Related to tariff uncertainty, some importers have preemptively looked for cost savings in their transportation networks. Accordingly, they have been more willing to look at increasing lead time to accommodate intermodal when it can help to mitigate price increases. Intermodal's longer average transit times are an advantage in building inventory at a slight discount, allowing for a more gradual buildup of stock.
Improving comparisons to truckload
Rail pricing has been closely aligned with the spot truckload market; however, the gap between over-the-road truckload and intermodal spot rates has been widening from the typical 20% to 30%. This pricing advantage could lead to some volume shifts from truckload to intermodal. The situation remains fluid and could change at any time, especially if truckload rates begin to increase in the second half of the year.
2025 intermodal pricing prospects
Intermodal pricing for committed, long-term contracts has increased an average 3.5% y/y. Recent labour agreements signed by U.S. railroads and persistent inflation are driving this increase. The spot market will likely continue to mirror the truckload market and increase 4-7% by the end of the year, before potential volumes soften in Q1 2026. With rates primed to rise, securing intermodal contracts now could be advantageous.
Intermodal service strong despite volume
Despite increased volume and demand, intermodal service metrics, such as train speeds, are performing well, even if slightly below the five-year average. With strong service and low pricing, contact your C.H. Robinson representative to see how you can best take advantage of intermodal service in your portfolio.