Friday, October 23, 2026
The news that moves freight
Trucking & Rail Oct 23, 2026 · 7 min read

US rail intermodal records and 2027 truck bids

Truck freight is moving to rail, and rail is filling up. Union Pacific’s domestic intermodal volume rose 13% in the third quarter, its fifth straight record quarter, the railroad reported on 22 October. CSX intermodal rose 7%, all of it domestic. Our view: rail is a safety valve for truck rates, but it won’t stay cheap for long. Knight-Swift says it will open 2027 truck bids asking for “low-to-mid double digits.” J.B. Hunt says its 2027 intermodal bids focus on “repairing our margins.” Our call: Knight-Swift’s Q4 truckload revenue per loaded mile excluding fuel will be up at least 10% when it reports in late January.

Rail is winning truck freight. That won’t keep 2027 freight budgets down

Union Pacific moved 13% more domestic intermodal freight in the third quarter than a year earlier. It was the railroad’s fifth straight record quarter. “Domestic intermodal delivered its fifth consecutive record quarter in both volume and revenue,” said Kenny Rocker, UP’s head of marketing and sales. CSX’s intermodal volume rose 7%, all of it domestic. Norfolk Southern’s rose 3%. All three reported on 22 October.

Intermodal means freight in a container or trailer that rides a train for the long haul and a truck at each end. Domestic intermodal mostly carries 53-foot boxes that would otherwise go by road. When it grows this fast, truck freight is converting to rail.

The evening before, the largest US asset-based truckload carrier put a number on what it wants next year. Knight-Swift CEO Adam Miller told analysts: “I think we’ll start the bid season with the idea of probably low-to-mid double digits and see how it develops from there.” Knight-Swift had already reported truckload revenue per loaded mile excluding fuel up 10% in the third quarter.

Our view: shippers are right to move freight to rail, but they should not treat it as a way around the 2027 rate reset. The truck market is tightening, and rail is absorbing the overflow. But the people who sell intermodal want higher prices too. On the eastern railroads, service is slipping as volume rises. Expect 2027 domestic freight budgets to go up by double digits, whatever the mode.

What the railroads reported

Union Pacific had a strong quarter. Revenue rose 15% to $7.19 billion and earnings per share rose 16% to $3.49. Its operating ratio was 59.1%. That ratio is operating costs as a share of revenue, so lower is better. Overall volume grew 6%. International intermodal, which carries import and export containers, grew 8%. Rocker credited “strong West Coast import volumes and business wins.”

UP expects volume to keep growing in the fourth quarter, and Rocker expects a third straight year of record domestic intermodal volume. The railroad raised its 2026 capital spending to $3.5 billion from $3.3 billion. It is pulling some planned 2027 spending into this year because of volume growth, according to FreightWaves. FreightWaves reported that UP expects high fuel prices and tight truck capacity to keep converting truckload freight to rail. CEO Jim Vena said the company is “efficiently handling 6% volume growth.”

CSX posted record revenue of $4.02 billion, up 12%. Its operating ratio improved 8.8 points to 60.9%. It raised its revenue growth guidance to high single digits, from mid-single digits. Chief commercial officer Maryclare Kenney said: “Reduced trucking availability, high truck rates, and elevated diesel costs continue to benefit our intermodal segment.” CSX is also winning truck freight with new interline services. These are joint routes with BNSF through Birmingham, Alabama, and with CPKC through Myrtlewood, Alabama. Double-stack trains, with one container on top of another, now run on the I-95 corridor. That became possible after the Howard Street Tunnel clearance project in Baltimore finished in the spring.

Norfolk Southern’s revenue rose 14% to $3.52 billion. But 8 of those 14 points came from fuel surcharge revenue, not more freight. Volume rose 3%. Its operating ratio worsened 2.8 points to 67.4%, largely on higher fuel costs. Excluding East Palestine derailment costs and costs tied to the proposed Union Pacific merger, it was 65.4%. CEO Mark George said: “Demand for rail service is growing with encouraging trends in areas such as domestic intermodal and chemicals.”

The catch: service and capacity

Volume is up, and service is sliding in the east. At CSX, terminal dwell, the average time a car sits in a yard, rose 12%. Average train speed fell 2%. Intermodal trip-plan compliance, which measures whether boxes arrive when the railroad said they would, fell 10 points. Intermodal on-time performance was 83%. CSX also said its Fairburn terminal near Atlanta is congested. It is spending on track, switching and processing capacity there.

CEO Steve Angel did not hide it: “We are handling more volume safely and efficiently, but we know our network can perform better.” He added: “As we move into 2027, we will be focused on ensuring we have sufficient resources across the network.”

At Norfolk Southern, the intermodal service composite fell to 84% from 92% a year earlier. Union Pacific looks steadier. Terminal dwell fell 2% and train speed was flat.

The pressure point is not only the rail line. It is also the truck at each end. Darren Field, who runs J.B. Hunt’s intermodal business, said on its mid-October call: “I don’t remember a time when our own drayage capacity became a little bit of a bottleneck for us.” Drayage is the short truck move between a rail ramp and a warehouse or port. If the drivers who do that work are scarce, a train slot alone does not move a box.

Truck pricing sets the ceiling, and it is rising

Intermodal is priced against trucking. It usually sells at a discount to the road, and a higher truck rate lets rail charge more. That is why Knight-Swift’s bid target matters for rail users too.

Miller said Knight-Swift’s tender rejection rates run “two to three times that of the broader market measures.” A tender rejection is a carrier turning down a load it had agreed to haul under contract, usually because the spot market pays more. Miller said contract rates “continued to accelerate throughout the period.” FreightWaves put the gains down to a “regulatory-fueled capacity shakeout.” The company said “sourcing quality drivers is as challenging as it has been in years.” For the fourth quarter, Knight-Swift guides to truckload revenue up a low-double-digit percentage excluding fuel.

Knight-Swift’s own intermodal unit shows the same shift. Its loads rose 13% year on year to the highest level in over five years. Revenue per load rose 15%, or 5.5% excluding fuel.

J.B. Hunt, a major intermodal provider, is saying the same thing. Field said the 2026 bid season brought low single-digit price increases. For next year he said: “our focus during the 2027 bid season is on repairing our margins.” J.B. Hunt’s intermodal loads rose 8% to 585,582 in the third quarter. Its eastern network grew 18% and transcontinental volume 1%. Revenue per load rose 11% to $3,121. CFO Brad Delco said driver, fuel, and claims and medical costs cut operating income by more than $50 million versus the second quarter. He said they “will without a doubt need to get recouped with pricing.”

Equipment markets point the same way. Ryder reported on 22 October that used tractor prices were up 19% year on year and 15% on the quarter. Citi analyst Ben Mohr said Ryder’s dedicated fleet unit “is likely facing elevated driver hiring costs/wages/bonuses on ongoing driver market tightening.”

What forwarders and shippers should do now

First, assume no mode is a hedge in 2027 bids. Truck carriers will open at double digits. Intermodal marketers want to rebuild margins. Railroads are adding cost to fix congestion. Budget higher for both and test the spread between them lane by lane.

Second, the east is where rail is both growing fastest and straining most. J.B. Hunt’s eastern volume rose 18%, and CSX’s I-95 double-stack service is new. CSX and NS service scores are falling. For Southeast and Northeast lanes, build extra transit days into intermodal quotes and keep a truck option priced as backup.

Third, price drayage on its own. Ramp-to-door capacity is tight even for the largest operators. A low rail rate with no dray truck to collect the box is not a real rate.

Fourth, for import freight, watch the West Coast. UP’s international intermodal rose 8% on West Coast import volumes. If that keeps up into peak season, inland rail from LA/Long Beach and the Pacific Northwest will compete with domestic boxes for the same trains and ramps.

Fifth, lock in commitments early. Knight-Swift’s bid season starts in November. Shippers who wait until spring will be bidding against a tighter market, not a looser one.

Our call

When Knight-Swift reports fourth-quarter results in late January 2027, we expect truckload revenue per loaded mile excluding fuel surcharge to be up at least 10% year on year. We also expect DAT’s national van linehaul rate to stay above $2.20 a mile through the end of November. Miller’s opening bid of low-to-mid double digits fits that call. If either measure misses, the truck reset is slower than we think. If both hold, shippers going into 2027 should budget for double-digit increases on US truckload contracts, excluding fuel. They should not expect intermodal to fully offset them.

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