Intermodal vs Trucking Economics
How much Class I rail traffic is intermodal, why its revenue share is lower than its unit share, and how trucks cap what railroads can charge for it.
Educational analysis for professional use. This guide is not investment advice or a recommendation to buy or sell any security, and it is not personalised.
Intermodal Wins on Long-Haul Density; Trucks Set the Price Ceiling
Intermodal, meaning containers and truck trailers carried on rail, lengthens trains but earns less revenue per unit (RPU) than bulk or merchandise, and trucks cap its price. The Association of American Railroads (AAR) reports it separately from its 20 carload commodity groups (coal, chemicals, grain, metals, autos and others).
Industry Volume Backdrop (Calendar 2025)
Both halves of US rail traffic grew at the same pace in 2025, but intermodal faded late in the year. AAR figures, published 7 Jan 2026:
| Metric | Volume | YoY |
|---|---|---|
| Carloads | 11,508,797 | +1.5% |
| Intermodal units | 14,055,633 | +1.5% |
| Combined | 25,564,430 | +1.5% |
December intermodal was down 3.4% on the year, per AAR’s January 2026 overview. Coal made up 26.3% of carloads outside intermodal. Growing volume does not guarantee growing RPU when truck competition is loose.
Class I Mix: Unit Share Versus Revenue Share
Intermodal is a much larger share of what Class I railroads (North America’s largest freight carriers) move than of what they earn. Share of units drives train planning; share of revenue drives RPU and margin.
| Company | Intermodal unit/carload share | Intermodal revenue share | Headline intermodal RPU |
|---|---|---|---|
| CSX | 48% of 6.307M units | Lower than merchandise | $692/unit (−2% YoY) |
| Norfolk Southern | 57.7% of 7.1M units | 25% of revenue | Part of $1,724 total RPU |
| Union Pacific | ~40% of 8.447m carloads | 20% of freight revenue | $1,380/car |
| Canadian National | 40.9% of 5.458m carloads | 22% of revenues | C$1,742/car (−2%) |
| Canadian Pacific Kansas City (CPKC) | 39.4% of 4.514M carloads | 18% of freight revenue | Not stated per carload |
Norfolk Southern runs the most intermodal-heavy unit mix of the five, yet merchandise still supplies 63% of its revenue. CPKC’s C$14,776m of freight revenue is 36% bulk and 46% merchandise.
Truck and Container Competition
On domestic lanes, rail intermodal pricing follows truck economics: capacity, driver availability and diesel. International boxes moving inland from ports follow ocean container rates, tracked by indices such as the Drewry World Container Index and the Shanghai Containerized Freight Index. When trucks or coastal container routes get cheaper, intermodal RPU and volume both come under pressure, even if carload commodities hold up.
CSX shows how segments can diverge within a year. In FY2025 its merchandise RPU rose 1% and intermodal fell 2%. Total RPU fell 4%, pulled down most by coal at −13%. RPU mixes price with fuel surcharge and length of haul, so the intermodal fall is consistent with truck pressure but does not prove it.
Worked Example: Intermodal Share and Blended RPU
Union Pacific’s FY2025 filed splits:
| Segment | Cars | RPU | Revenue |
|---|---|---|---|
| Intermodal | 3.357m | $1,380 | $4,632m |
| All other | 5.090m | ~$3,652 implied | ~$18,588m |
| Total | 8.447m | $2,749 avg. | $23,220m freight |
If intermodal rises by one percentage point of carload mix (from 39.7% to 40.7%) with segment RPUs unchanged, blended RPU falls about $23 per car ($2,749 → ~$2,726). That is pure mix arithmetic, separate from any truck rate cycle.
The effect on the operating ratio (operating costs as a share of revenue) depends on what the extra trains cost to run. Longer trains spread fixed costs, so intermodal can improve it even while diluting RPU.
Single-Line Mexico Exposure
CPKC is the only Class I with one continuous line through Canada, the US and Mexico (FY2025 annual report). Its intermodal traffic, small in revenue but large in volume, competes with trucks.
What to Track
Watch AAR weekly intermodal figures for volume, CSX and Norfolk Southern intermodal RPU for truck-linked pricing, and container indices for the wider backdrop. Precision scheduled railroading (PSR), running fewer, longer trains to a fixed schedule, adds density, but helps the operating ratio only if lane pricing holds against trucks.
The operating ratio fades year by year off volume, revenue per unit and capex, feeding a value per share checked against return on capital.
The Excel model is the primer's railroad build live across 11 sheets: revenue from volume and revenue per unit, an operating ratio that fades year by year, a valuation for a mature compounder and an improvement story, a margin bridge, return on capital against the cost of capital, free cash flow and capital returns, and a sensitivity grid. Change the operating ratio path or capex and the value moves.
Frequently Asked Questions
- How much of Class I volume is intermodal?
- FY2025 unit shares: CSX intermodal 48% of 6.307M rail units; Norfolk Southern intermodal 57.7% of 7.1M units; Union Pacific intermodal ~40% of 8.447m revenue carloads; Canadian National intermodal 40.9% of 5.458m carloads; CPKC intermodal 39.4% of 4.514M carloads. US industry calendar 2025 traffic was 11.51m carloads plus 14.06m intermodal units (+1.5% YoY each per AAR).
- Why is intermodal revenue share lower than unit share?
- Intermodal moves at lower revenue per unit than bulk or merchandise carloads. CPKC FY2025 freight revenue was 18% intermodal against 39.4% of carloads. Norfolk Southern intermodal was 57.7% of units but 25% of revenue, while merchandise was 63% of revenue. The two measures are not interchangeable, so check which one a figure uses.
- How does trucking competition affect rail intermodal pricing?
- On domestic lanes rail intermodal competes directly with trucks, so truck capacity, driver availability and diesel prices set the ceiling on what rail can charge. Ocean container rates matter for international boxes moving inland from ports. Rail intermodal revenue per unit responds to those forces as well as to contract renewals: CSX FY2025 intermodal revenue per unit was $692, down 2%.
- Did US rail intermodal grow in 2025?
- AAR calendar 2025 full-year intermodal units were 14,055,633 (+1.5% YoY). Industry commentary noted that intermodal softened in the second half and December intermodal was −3.4% YoY. Volume can grow while revenue per unit weakens when truck competition tightens.