Freight Market • ELDT.LIVE
Rail Intermodal Gains as High Diesel Costs Pull Freight From Long-Haul Trucks
Third-quarter results show intermodal volume gains at three major U.S. railroads as expensive fuel and tighter truck capacity change the economics of long-distance freight.
Rail intermodal volumes moved higher in the third quarter
New railroad results and October 22 reporting show a measurable shift in long-distance freight. Union Pacific's domestic intermodal volume rose 13% from a year earlier, CSX reported a 7% intermodal increase, and Norfolk Southern reported 3% growth. The companies also posted broader volume and revenue gains, but their results show that intermodal freight is one of the clearest places where rail is competing for loads that might otherwise move long distances by truck.
Intermodal does not remove trucks from the shipment
An intermodal load normally uses rail for the long-haul segment while a truck handles pickup, movement to or from the terminal, and final delivery. That distinction matters for CDL drivers: growth in intermodal can reduce some over-the-road linehaul miles while creating or supporting drayage, regional, yard, and local-delivery work. The same container may still need multiple commercial-vehicle moves before the customer receives it.
High diesel costs are widening the long-haul comparison
Reuters reported that record fuel costs and reduced available truck capacity are encouraging shippers to evaluate rail for long distances. Railroads use fuel too, and Union Pacific said higher fuel prices worsened its third-quarter operating ratio by 140 basis points. The competitive difference is that a train can move large volumes of freight with less fuel per ton-mile, while a highway carrier must cover the diesel cost of each truck and driver on the lane.
The pressure is greatest on freight that can change modes
Dry-van consumer goods moving between large markets, distribution centers, ports, and rail terminals are more likely to have an intermodal alternative than an urgent, specialized, oversize, temperature-sensitive, remote, or short-haul load. Transit time, terminal access, appointment requirements, cargo handling, service reliability, and total door-to-door cost still determine whether a shipper can switch. A national trend does not mean every lane or commodity is leaving the highway.
Long-haul carriers should protect rate discipline
A carrier bidding against intermodal service should calculate the full cost of the trip: fuel, driver pay, tolls, maintenance reserve, insurance, deadhead, detention risk, and the time needed to reposition equipment. Cutting the linehaul rate to preserve volume can turn a busy truck into an unprofitable truck. Confirm how the fuel surcharge is calculated, how quickly it adjusts, which miles are paid, and whether accessorial charges cover predictable terminal or customer delays.
Drayage opportunities come with different operating risks
More intermodal freight can increase demand for drivers who move containers between rail ramps, ports, warehouses, and nearby customers. Those jobs may offer shorter routes, but drivers and fleets must price terminal wait time, chassis availability, appointment windows, overweight container risk, interchange documentation, equipment condition, tolls, and return requirements. A local route is not automatically a low-cost or low-delay route.
Company drivers and trainees should compare job details, not headlines
The data do not prove that rail growth will eliminate CDL jobs. Drivers considering intermodal or drayage work should ask about hourly versus mileage pay, detention and queue compensation, chassis responsibilities, TWIC or port-access requirements, home time, schedule variability, equipment type, and the percentage of unpaid waiting. ELDT trainees can also ask schools whether training covers container inspection, railroad-crossing safety, coupling, documentation, and urban terminal operations.
Fleet planners should identify lanes most exposed to conversion
A practical review starts with the carrier's longest recurring lanes near major intermodal terminals. Compare truck cost and service with the rail alternative, then classify each lane by urgency, commodity requirements, reliability, backhaul strength, and customer flexibility. Fleets may respond by emphasizing time-sensitive or specialized work, building drayage partnerships, shortening average length of haul, or improving fuel and empty-mile performance rather than competing only on price.
Read railroad revenue carefully
Higher railroad revenue does not measure truck-to-rail conversion by itself. Fuel surcharges, pricing, business mix, coal and merchandise traffic, and other revenue also affect quarterly results. Union Pacific said operating revenue rose 15% while total revenue carloads grew 6%; Norfolk Southern said higher fuel surcharges accounted for eight percentage points of its 14% revenue growth. Drivers and carriers should watch intermodal volume, truckload rates, tender rejection, carrier exits, diesel prices, and lane-level demand together before changing equipment or employment plans.
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Official sources
Reuters — U.S. railroads pull ahead as high fuel costs hit truckers harder ↗Union Pacific — Third Quarter 2026 Results ↗CSX — Third Quarter 2026 Results ↗Norfolk Southern — Third Quarter 2026 Results ↗U.S. Energy Information Administration — Gasoline and Diesel Fuel Update ↗ELDT.live independently creates and reviews its content. We do not present practice questions as official examination questions and do not guarantee a licensing result.