Freight Rail Industry Shows Resilience in Q1 2025 Despite Headwinds

Rail Traffic Results Highlights – Q1 2025

According to data tracked by the Bureau of Transportation Statistics (BTS) and reported by the Surface Transportation Board (STB):

• Intermodal: 3.54 million containers and trailers originated in Q1 2025, an increase of 8.3% (272,212 units) over Q1 2024
• Chemical Carloads: Average of 33,725 weekly in March, the highest monthly average ever
• Coal Volumes: Down 0.3% in Q1 2025, continuing a long-term, general trend of declining coal shipments
• Motor Vehicles: March carloads recorded the highest levels since February 2020, boding well for new vehicle sales at an annualized 17.8 million cars

“Freight railroads are a derived-demand industry: demand for rail service is a function of demand elsewhere in the economy for goods the railroads carry,” according to AAR. “That indicates that the big uncertainty in the broader economy is also causing uncertainty in rail volumes.”

The Freight Rail Index (FRI), the seasonally adjusted U.S. rail intermodal volume plus carloads excluding coal and grain, increased by 0.7% in March 2025 after climbing 1.8% in February. These back-to-back monthly increases indicate that, notwithstanding widespread uncertainties over policy and ongoing weakness in manufacturing, the economic fundamentals, as seen in rail volumes, continue to be positive.

Notably, data from the U.S. Department of Transportation (USDOT) and CBRE Supply Chain Advisory analyses show resilient consumer spending as a primary driver propping up intermodal traffic growth, which has experienced six straight quarters of increases in North American markets. The weekly average of 276,100 intermodal units in March trailed only March 2021’s record volume.

On the jobs side, the report shows the labor market remains strong with an impressive 228,000 new jobs created net of losses in March 2025, which supports continued consumer confidence and spending power. Though infrastructure investments and manufacturing improvements could lift carload volumes in forthcoming quarters, some rail commodities face headwinds from persistent challenges in large sectors such as housing and lingering uncertainties regarding trade policy, industry experts say.