Rail freight gains ride steelmaking, energy sectors

U.S. rail freight traffic surged 4.1% in the week ending August 29 compared with the same period last year, according to the Association of American Railroads. Commodity freight shipments rose 2.2%, while intermodal volumes increased by 5.7%. Seven out of ten carload commodity group shipments grew from the same week in 2025, with metallic ores and metals for steelmaking leading at 11%, followed by petroleum and related products up 8.4%, and grain up 8.3%. Chemicals and motor vehicles and parts saw declines of 3.8% and 6%, respectively.

Analysts speculate that the rise in steel production for data center construction is driving the increase in metallic ore shipments. Meanwhile, uneven manufacturing output has caused fluctuations in the chemical sector. Intermodal transportation continues to thrive due to a significant gap between truck and rail rates, now around 34%, according to SONAR data.

In the first 34 weeks of 2026, U.S. railroads reported a cumulative volume increase of 2.7% for carloads and 3.9% for intermodal units. Total combined traffic rose by 3.3% compared with 2025. North American rail volume for the week increased by 1.7% to 346,191 carloads and 395,417 intermodal units, up 6% y/y. For the first 34 weeks of the year, North American volume reached 23,812,940 carloads and intermodal units, up 3% compared with 2025.

Union Pacific and Norfolk Southern are defending their rail merger application as the Surface Transportation Board (STB) continues its review.