Freight in the United States is performing better than many European networks, with rail traffic continuing to grow across much of the market. The Association of American Railroads (AAR) says July extended a run of strong results, with total wagonloads rising year-on-year for the seventh consecutive month. Intermodal volumes also increased for the sixth month running, setting a new July record. Through the first seven months of 2026, total wagonloads were 2.7% higher than a year earlier.
The AAR analysis suggests that the improvement is being driven by a broadening recovery in goods movement. Excluding coal, wagonloads were 4.3% higher year to date, while intermodal volumes rose 3.8%. Rail traffic is growing faster than GDP, pointing to factors beyond general economic expansion. For European rail freight operators facing stagnant or declining volumes, the US experience offers some clues about where growth might be found.
Growth is coming from across the network
The most encouraging feature of the US figures is their breadth. Fourteen of the 20 major wagonload categories recorded year-on-year growth in July, matching June’s performance. Nine categories recorded either their highest or second-highest monthly volume of 2026. These included non-metallic minerals, lumber, paper, petroleum products and steel products, suggesting the improvement is not dependent on one particular commodity. The consolidation merger between Union Pacific and Norfolk Southern is likely to strengthen the position of the freight railroad sector.
There are still significant weak spots. Coal volumes fell for the fifth consecutive month and are now less than half their level of 20 years ago. Yet the AAR notes that coal’s decline says relatively little about the wider economy, since volumes are heavily influenced by domestic energy consumption and export markets. Excluding coal, US wagonloads increased 3.2% in July. Grain also continued to perform strongly, with volumes up 13% year to date.
Intermodal is the king of commodities
Intermodal is perhaps the clearest indication that rail is capturing demand in the wider freight market. July was the best July on record and followed a record-setting June. Year-to-date intermodal volumes are also at a record level, putting 2026 on course to become the strongest year in the sector’s history. The performance comes despite the traditional disruption caused by the July 4 holiday period and gloom earlier in the year.
Several factors are working in rail’s favour. Service levels have remained strong, while higher diesel prices and fewer available truck drivers have increased road transport costs. Consumer demand for goods has also remained relatively firm. The combination suggests that competitive pricing alone is not driving the increase. Reliable rail service is making intermodal an attractive option, particularly where road freight faces rising operating costs.
Manufacturing provides impetus
The improvement in rail freight is also closely linked to a recovery in US manufacturing. The manufacturing PMI reached 55.7% in July, its highest level for more than four years and its seventh consecutive month above the 50% threshold indicating expansion. Manufacturing output has been rising since the second half of 2025, while employment in the sector is also higher than at the end of last year.
That relationship matters because rail carries large quantities of manufacturing inputs, intermediate goods and finished products. The increase in traffic is therefore consistent with a healthier industrial economy. Another indication is the number of freight wagons in storage. Since the beginning of the year, the number of stored wagons has fallen by 53,000, while their share of the total fleet has dropped from 21.7 to 18.5%.
AAR index rises again
For European rail freight, the lesson may be less about copying the American model than recognising the importance of broad-based demand, reliable service and competitive intermodal products. The US railroads are benefiting from favourable economic conditions, but they are also well placed to respond when customers look for alternatives to road transport.
The wider US economy remains mixed, with housing and consumer confidence providing reasons for caution. Nevertheless, the AAR Freight Rail Index, which excludes coal and grain, has risen for four consecutive months and is now at its second-highest level. The AAR regards this as a positive indicator for goods movement and near-term economic activity.
European railways cannot reproduce America’s geography, industrial structure or long-haul operating model. They can, however, draw encouragement from a market where rail is converting stronger manufacturing and consumer demand into additional freight volumes. The US figures suggest that when rail combines reliable service with a competitive offer, growth can extend well beyond traditional bulk commodities.