For years, low trucking rates and the flexibility of over-the-road transport helped highway carriers capture freight that might otherwise have moved by rail. That dynamic is now shifting — and the nation's largest railroads are moving aggressively to take advantage.
CSX Corp, Union Pacific, and BNSF Railway are all expanding terminal capacity and targeting truck-competitive corridors as tightening trucking capacity and rising rates make intermodal rail increasingly attractive to shippers, according to a Reuters report published March 5.
The Numbers Behind the Shift
The context is straightforward: trucking is getting more expensive. National van spot rates reached $2.43 per mile in February, up nearly 20% from $2.03 a year earlier, according to DAT Freight & Analytics. At the same time, trucking capacity continues to shrink as small carriers exit the market and federal enforcement actions — including stepped-up CDL scrutiny and insurance requirements — reduce the available driver pool.
Freight broker C.H. Robinson confirmed the trend, noting that capacity is contracting as regulatory pressure intensifies. That creates a pricing tailwind for railroads, particularly in intermodal service where containers move between truck and rail.
"A tightening truckload market has the potential to support domestic intermodal volumes and pricing, particularly on shorter average length-of-haul routes where competition with over-the-road trucking is typically most intense." — Fadi Chamoun, BMO Capital Markets
How Railroads Are Positioning
Each of the major carriers is investing to capture the opportunity:
- CSX told Reuters that converting freight from trucks "remains a priority" and that it is expanding terminals and working with port authorities to develop inland hubs closer to end markets.
- Union Pacific CFO Jennifer Hamann said the company expects roughly 75% of new business growth to come from freight "coming off the highway." The railroad's pending acquisition of Norfolk Southern would create the first coast-to-coast rail network.
- BNSF has invested in terminal expansions in Chicago, Dallas-Fort Worth, and Phoenix, with group VP Jon Gabriel noting that "both new shippers and our large traditional customers are leaning more on rail for capacity, cost advantages and sustainability benefits."
BMO analyst Fadi Chamoun suggested that eastern railroads CSX and Norfolk Southern could benefit disproportionately due to their heavier exposure to intermodal traffic in densely populated corridors.
Cyclical or Structural?
The key question for fleet operators is whether the current capacity tightening is a temporary seasonal effect or something more lasting.
Drew Roy, director of intermodal at freight broker Traffix, initially viewed the crunch as seasonal — but has since revised that assessment. The loss of CDL drivers across the U.S. and the regulatory pressure on smaller operators suggest a more structural shift in available highway capacity.
If the shift proves structural, it would mean persistently higher trucking rates and a permanent expansion of rail's competitive window — particularly on lanes longer than 500 miles where intermodal already has a cost advantage.
What This Means for Fleet Owners
The rail expansion isn't a threat — it's context. For trucking operators, the same market forces that are attracting railroad investment are also driving up freight rates and improving carrier profitability. The opportunity is significant for fleets that are positioned to capture it:
- Higher rates are here to stay (for now): The combination of shrinking capacity and growing demand means carriers with available trucks are earning more per mile than they have in years. That trend has legs into Q2 and beyond.
- Specialize where rail can't compete: Intermodal works for standardized, long-haul freight. Last-mile delivery, regional routes, expedited service, and specialized equipment (flatbed, tanker, oversized) remain firmly in trucking's wheelhouse. Investing in these niches strengthens your competitive position.
- Capacity is your advantage: With roughly 20,000 fleets having exited since January 2023 and few returning, every truck on the road is more valuable. Fleets with the financial strength to maintain or grow capacity are capturing market share from those who can't.
- Consider the equipment timeline: If you've been waiting on fleet expansion, the market is rewarding carriers who act. Strong rates support the economics of new equipment purchases, and current pricing won't last forever — EPA 2027 standards will push truck costs higher.
The freight market is repricing around tighter capacity. Railroads see the opportunity. Smart fleet operators should too.