U.S. Rail Speeds Hit Multi-Year Lows as Intermodal Volume Surges

S. Class I railroads—BNSF, CSX, Norfolk Southern, and Union Pacific—are facing significant capacity constraints as shippers redirect freight to rail to escape high fuel prices and elevated trucking rates. 5%, with even more dramatic weekly increases of 12-15% in late June. However, this surge is creating a paradoxical problem: network speeds have declined to concerning levels, with CSX experiencing seven-year lows and BNSF and UP hitting 10-month lows.

The core issue is that while railroads can theoretically handle planned volume increases, the sudden and unanticipated surge is straining existing crew capacity and network infrastructure. Both Norfolk Southern and CSX are actively hiring conductors and train crews at dozens of locations to address staffing shortages. Industry analyst Rick Paterson notes this is a "trick" situation—railroads want the revenue from higher volumes, but they must protect service levels and on-time performance to retain customers. The risk is real: if railroads fail to manage this surge effectively, shippers will shift freight back to trucking once rates stabilize, eroding the revenue gains.

This situation has significant implications for supply chain professionals. Shippers who have embraced rail may experience longer transit times in the near term, even as they benefit from lower per-unit rates. Carriers relying on consistent rail service must monitor rail velocity metrics closely and consider adjusting scheduling buffers. The railroads' ability to successfully manage this volume windfall—as BNSF did in late 2023—will determine whether this capacity shift becomes permanent or temporary.