Surface Transportation 2026 Annual Review & Outlook

In Perspective

By Larry Gross

Another turbulent year for North American intermodal is drawing to a close.

The year started with a new US presidential administration, followed by“ Liberation Day” and ongoing tariff uncertainty. Meanwhile, the industry coped with continued soft demand for truckload services and continued downward pricing pressure. The year culminated with the announcement of a coastto-coast rail merger that, if approved, will certainly transform the intermodal landscape.

Through the first 10 months of 2025, intermodal rail volumes rose 3.1 % year over year, good growth but well short of the 8.5 % gain recorded in 2024. International intermodal— the movement of 20- and 40-foot ISO containers to and from ports— provided most of the growth impetus, increasing 4.3 % through October versus 1.9 % for domestic— 53-foot domestic containers and trailers. But the picture is changing fast.

Any intermodal growth will depend largely on whether the mode can claw back share from the highway.

International came into 2025 with a ton of momentum. Growth in 2024 had been strong at 13.9 %, thanks in part to late-year frontloading of imports in response to tariff fears.

But the pendulum had begun to swing, and growth ebbed. The first quarter of 2025 notched a 6.3 % yearover-year gain, but in the second and third quarter, growth slowed to 2.4 % and 2.8 %, respectively. July results were boosted by a surge in imports after the Trump administration reduced the effective tariff rate on Chinese goods from 145 % to 30 %.

Thereafter, the air resumed coming out of the balloon, with only a fractional gain in September and a 5.7 % year-over-year deficit in October. It looks like deficits will continue through the balance of this year. The prospects for international intermodal in 2026 are cloudy at best. President Trump’ s exceedingly volatile and unpredictable tariff gyrations have settled to a certain extent, reducing the big push-pull effects that rocked 2025. The first half of 2026 will bring difficult year-over-year comparisons as“ normal” volumes are compared to the robust, frontloading-boosted volumes of the prior year.

Adding to the headwinds will be the ongoing return to normalcy with regard to coastal share. West Coast share benefited in early 2025 from labor uncertainty on the East Coast as well as the closure of the Suez Canal routing. Now, labor peace reigns in the east, and the West Coast share has dipped back towards the previous normal.

With the truce in Gaza, the potential is growing for a return to the Suez, which will enhance the East Coast option. This will be a headwind for intermodal, as intermodal market share is considerably higher on the West Coast than on the East Coast.

The domestic intermodal sector continued to slog forward in 2025. After ending 2024 on an optimistic note, with domestic intermodal share ticking up to 6.2 % in the second half of the year, the momentum faded in the first half of 2025, and share slipped back below 6 %. Through October, domestic intermodal volumes grew just 1.9 %, down from a 3.5 % gain in 2024.

For 2026, the environment for domestic intermodal is projected to remain challenging. Limited growth in truckload demand is expected. Truckload capacity has slowly been exiting, but history tells us that, in the absence of either an outside influence or an increase in demand, the trucking industry is unable to“ right-size” capacity. Any intermodal growth will depend largely on whether the mode can claw back share from the highway.

However, a wild card is taking shape in the form of the Trump administration’ s anti-immigration actions. In trucking, these initiatives include documentation checks during traffic stops, a crackdown on non-domicile commercial drivers’ licenses and English competency requirements, and restricted immigration.

Taken together, these actions hold the potential for a meaningful reduction in driver supply. Whether it is large enough to move the needle will depend on how far and how quickly things evolve.

On the plus side, US Surface Transportation Board service statistics indicate that, despite the ups and downs experienced in 2025, the intermodal network has been running exceptionally well. In particular, trains being held in terminals for lack of power or crews are at very low levels across the board. The implies that more-than-adequate supplies of both are available.

In other good news, domestic intermodal is growing strongly in Mexican markets. Intra-Mexico domestic container moves were up 17.5 % year-todate through October, and domestic containers crossing the border, which declined 3.1 % in 2024, were up 20.9 %.

It may have taken a while, but the flurry of new services engendered by the Canadian Pacific Kansas City merger and the reaction of the other railroads have started to gain some traction.

email: lawrencejgross @ gmail. com

70 Journal of Commerce | January 5, 2026 www. joc. com