RAILSTRONG WEEKLY SIGNAL

Executive Market Signal

The freight market continues transitioning from oversupply and transactional buying behavior toward a more disciplined, strategically planned environment.

Three major themes are driving the market this week:

• Rail and intermodal volumes continue improving.
• Truckload capacity is becoming more disciplined and expensive.
• Northeast energy and industrial activity continue supporting bulk, flatbed, transload, and rail-served freight.

The latest Association of American Railroads data showed U.S. weekly rail traffic up 4.2% year over year for the week ending May 16. More recent North American traffic accelerated further, rising 7.2% year over year for the week ending May 23, driven heavily by intermodal growth.

This matters because rail growth is no longer limited to one isolated freight category. Industrial commodities, grain, chemicals, metallic ores, forest products, and intermodal are all contributing to the broader improvement.

Truckload conditions continue firming at the same time. Capacity attrition remains a major factor. Spot rates across van, reefer, and flatbed continue improving from prior-year levels, while diesel, insurance, equipment costs, and compliance pressures raise carrier operating costs.

The Northeast and Appalachia remain strategically important because energy, industrial production, infrastructure development, power demand, and dense consumption markets continue generating freight demand across multiple modes.

Rail Market Update

Rail freight continues strengthening across North America. The Association of American Railroads reported total U.S. weekly rail traffic of 511,216 carloads and intermodal units for the week ending May 16, up 4.2% year over year.

More recent North American reporting showed combined rail traffic up 7.2% year over year for the week ending May 23. Intermodal volume rose 10.3%, showing accelerating momentum in rail-supported freight movement.

Railroads continue benefiting from:

• Improving intermodal economics.
• Tighter truckload conditions.
• Higher diesel costs.
• Industrial freight demand.
• Highway-to-rail conversion opportunities.
• Better network fluidity and service reliability.

Industrial categories remain important freight indicators. Grain, metallic ores, forest products, chemicals, petroleum products, and metals continue supporting carload activity and rail-served supply chains.

Key Rail Themes

• Rail traffic has now posted multiple consecutive weeks of year-over-year gains.
• Intermodal continues outperforming broader freight growth.
• Railroads are aggressively pursuing highway conversion freight.
• Industrial commodities remain stable support categories.
• Eastern rail networks remain strategically positioned for energy and manufacturing freight.

Intermodal Market Update

Intermodal remains one of the strongest areas of freight momentum. North American intermodal traffic rose more than 10% year over year in the latest weekly reporting.

The environment continues improving for intermodal because truckload pricing floors are rising while rail service consistency improves.

Reuters recently reported that tightening trucking capacity is opening a strategic window for railroads to win back freight from highways. Class I carriers continue investing in terminals, inland connectivity, and intermodal expansion.

Best-fit intermodal freight continues to include:

• Long-haul dry van freight.
• Retail and consumer goods.
• Food and beverage products.
• Paper and packaging.
• Inbound distribution freight.
• Freight moving more than 750 miles.

Current Intermodal Advantages

• Fuel-efficient long-haul transportation.
• Reduced driver dependency.
• Improved sustainability metrics.
• Better cost stability versus truckload.
• Strong fit for planned freight networks.

Current Watch Points

• Drayage pricing pressure.
• Terminal dwell time.
• Port and import volume volatility.
• Appointment discipline and planning requirements.

Transload Market Update

Transload remains one of the strongest strategic growth opportunities in freight transportation.

As shippers search for ways to access rail economics without direct rail-served facilities, transload becomes the operational bridge between rail efficiency and truck flexibility.

Growth remains strongest across:

• Aggregates and construction materials.
• Steel and metals.
• Lumber and building products.
• Industrial machinery.
• Chemicals and plastics.
• Dry bulk commodities.
• Energy-related freight.
• Frac sand and industrial materials.

The Northeast and Mid-Atlantic remain particularly important because of dense highway markets, rail-served industrial corridors, energy infrastructure, and regional truckload constraints.

Transload Drivers

• Long-haul trucking cost pressure.
• Need for modal flexibility.
• Improved rail service reliability.
• Industrial project freight growth.
• Energy and infrastructure demand.
• Inventory staging requirements.

Truckload Market Update

Truckload conditions continue firming as capacity exits the market and operating costs remain elevated.

DAT reporting continues showing spot rates improving year over year across major equipment types. Flatbed remains particularly strong due to industrial, infrastructure, energy, and construction-related demand.

The tightening environment is being driven more by supply contraction than explosive freight demand growth.

Carrier exits, higher insurance premiums, diesel volatility, maintenance inflation, and equipment costs continue reducing excess trucking capacity.

Key Truckload Themes

• Spot rates remain materially above prior-year levels.
• Carrier attrition continues tightening supply.
• Flatbed markets remain stronger than van markets.
• Fuel and maintenance costs continue raising carrier break-even levels.
• Dedicated and network-aligned freight remain preferred by carriers.

Shipper Strategy Focus

• Evaluate long-haul conversion opportunities.
• Secure flatbed capacity early.
• Reduce unnecessary spot exposure.
• Align freight with carrier network balance.
• Use transload and intermodal where appropriate.

Marcellus / Northeast Energy Update

The Marcellus and broader Northeast energy region remain major freight drivers for rail, transload, flatbed, and industrial supply chains.

The EIA continues forecasting record U.S. natural gas production in 2026 and 2027, with Appalachia remaining one of the largest contributors to national supply growth.

The freight impact extends well beyond natural gas itself. Energy-related industrial activity supports:

• Pipe and steel movement.
• Frac sand and aggregates.
• Construction materials.
• Industrial equipment.
• Chemical and plastics freight.
• Rail-served bulk movement.
• Warehouse and terminal activity.

Data-center-related power demand, LNG growth, infrastructure investment, and industrial energy usage continue increasing the long-term importance of Northeast natural gas infrastructure.

Regional Freight Indicators

• Bulk rail demand.
• Flatbed pipe and steel movement.
• Industrial construction activity.
• Rail-served terminal growth.
• Energy-related warehouse demand.
• Short-haul trucking around production corridors.

Strategic Market Takeaways

• Rail traffic momentum continues improving.
• Intermodal growth is accelerating.
• Truckload capacity is tightening structurally.
• Transload remains a critical modal bridge strategy.
• Flatbed markets deserve close monitoring.
• Northeast energy and industrial freight remain strategically important.
• Shippers should evaluate modal diversification before broader tightening accelerates.