An imminent change of administration has not derailed growth in the American rail sector. The Association of American Railroads’ latest statistical review shows encouragement. The AAR, which monitors freight performance, said its members returned better than ever intermodal figures in the last month of 2024. However, there is an awareness of uncertainty over government policy.
According to the monthly statistics from the AAR, December 2024 had the highest intermodal volume of any December in history. US rail containers and trailers volume in December 2024 averaged 273,122 units per week, the most ever for December and up 11.2 per cent over December 2023. Year-on-year intermodal change was positive each month in 2024, claimed the Association.
Trucks on tracks going out of fashion
The US network is principally a freight railway. The numbers behind the industry are consequently large. According to AAR figures for 2024, US railroads originated 13.84 million containers and truck trailers — the most since 2021 and the third most ever (behind 2018 and 2021). That represents an improvement of 9.3 per cent (1.17 million units) over 2023. Containers accounted for a record 96.3 per cent of U.S. intermodal originations in 2024.
The North American phenomenon of road trailers ‘piggybacking’ on flatbed rail wagons may be declining, but it is still a large number. Extrapolating from the AAR figures, they account for 3.7 per cent of intermodal traffic, or over 460,000 units. “Many of these containers were filled with imports or exports,” explained the AAR, alluding to a smaller proportion of domestic traffic. “The fact that port volumes were up by double digits in 2024 explains much of rail intermodal’s growth, especially on the West Coast.”
Economy on firm footing, economic policy not so sure
The AAR provides its own monthly analysis of the raw statistics. The Association compiles its Freight Rail Index (FRI), which measures seasonally adjusted intermodal volumes plus carloads excluding grain and coal. The latter commodity sharply declined, skewing the figures for “carload” (non-intermodal) traffic. The FRI provides a broad perspective on rail performance and its relationship with the overall economy.
In December 2024, the FRI rose 2.2 per cent from the previous month, reaching its highest point since January 2021. “This sustained upward trend indicates that, despite persistent manufacturing weakness and policy-related uncertainties, the broader US economy remains on relatively firm footing as we begin 2025,” said their statement.
Present good but future uncertain
Most goods consumed in the United States are produced far from end markets and require transport, observes the AAR. They say rail intermodal plays a key role in bringing manufacturers and consumers together. “The health of consumer spending, which accounts for approximately 70 per cent of US economic output, is crucial to freight transporters like railroads,” said their latest report. “Robust consumer spending has underpinned economic expansion over the past two years, serving as a pivotal support for rail volumes, particularly intermodal freight, throughout this period.” Conversely, that may offset recent concerns over container shipping rates and their effect on railroad operations.
US rail intermodal volume in December 2024 averaged 273,122 units per week, the most ever for December and up 11.2 per cent over December 2023. Year-over-year intermodal change was positive each month in 2024. However, the Association cautioned that the coming year had many variables. “Potential shifts in fiscal policy, trade, immigration, taxation and regulatory frameworks — alongside evolving monetary policy from the Federal Reserve — are contributing to heightened economic uncertainty as we enter 2025,” they concluded.