US intermodal contract rates have moved sharply higher in the fourth quarter. Transcontinental rates are up more than 12% year over year, and shorter Eastern lanes are up nearly 9%. The headline looks aggressive, but the driver is diesel, not tight capacity.
Intermodal contracts are typically negotiated annually and reset near year-end. This round of contracts landed right on top of two diesel spikes: prices rose about 50% in March-April, followed by a 6% increase in the transcontinental contract index from April to May; diesel then rose about 36% from July to September, followed by a 10% index increase from August to October. Based on that tracking, fuel explains roughly two-thirds of the transcontinental increase and three-quarters of the Eastern increase. Strip out fuel and transcontinental rates are up about 5%, Eastern about 2%.
That also explains why large shippers saw milder increases than the index suggests. J.B. Hunt secured only low-single-digit rate increases in the bid season that closed in September. The logic is straightforward: fuel surcharges had already pushed the total rate up, and service providers negotiate on the all-in number, leaving little room to raise the base rate.
Even after the increases, intermodal remains cheaper than truckload. The Intermodal Contract Savings Index shows a 30% savings versus comparable truckload lanes, down only slightly from a 33% peak in June. Volumes have largely recovered and growth is still running around 7% annualized.
Rail is not immune to disruption, though. BNSF had a weather-related washout in New Mexico, and CSX suffered a technical outage — reminders that rail infrastructure can fail just like trucking. Shippers routing ocean-truck cargo with a rail leg should build some buffer into their schedules.