Intermodal Volumes Surge 9% as Diesel Costs Threaten Freight Markets
Domestic intermodal volumes jump nearly 9% year-on-year, but record diesel prices squeeze margins across trucking and.
The freight industry is facing a paradox: while domestic intermodal volumes have surged nearly 9% above last year’s levels, record-high diesel prices threaten to erode these gains by pushing transportation costs to unsustainable levels. October 2026 2026 State of the Industry Report, published by FreightWaves in partnership with Ryder, reveals a fragile market where shippers are walking a tightrope between capacity constraints and rising operational expenses.
The report, which provides a comprehensive overview of trucking, maritime, and intermodal markets, highlights that intermodal transport continues to outperform traditional truckload shipping. However, the gains are under threat from soaring fuel prices, which have reached record highs and are squeezing profit margins across the supply chain.
This shift is particularly evident in major U.S. ports, where container activity has reached near-record levels as businesses carefully manage inventory to avoid overstocking or shortages.
Pete Stewart, President and CEO of ResourceWise, addressed the dynamics of this transition during the Forest Resources Association’s (FRA) Joint National and Lake States Region Fall Meeting and Lake States Region Fall Meeting in Green Bay, Wisconsin. In his presentation, “The Global Pulp Market: What It Means for the US Wood Supply Chain”, Stewart emphasised that the intermodal advantage is not just about cost but also reliability.
The FRA meeting, held from September 29 to October 1, brought together industry leaders to discuss the challenges and opportunities facing the wood supply chain. “Active forest management and domestic timber production are critical to supporting jobs in logging and mill businesses,” Tiffany said.
Fuel costs cast a shadow over freight gains: intermodal volumes
While intermodal transport is thriving, the broader freight market is grappling with the fallout from record diesel prices. The State of the Industry Report reveals that fuel costs have surged to unprecedented levels, increasing operating expenses for carriers and putting upward pressure on freight rates.
The impact of rising fuel costs is already being felt across the industry. Syed noted that while manufacturing remains a bright spot for freight demand, with factory orders and industrial production continuing to expand, the rising cost of fuel could dampen growth. “Carriers are being forced to adjust rates, and shippers are having to rethink their logistics strategies to stay competitive.”
The report also highlights that consumer spending, a key driver of freight demand, has remained resilient despite economic uncertainties. However, the combination of rising fuel costs and declining consumer sentiment could create headwinds in the coming months. The housing sector, in particular, continues to weigh on freight markets, with declining home sales and weak builder sentiment reducing demand for construction-related materials.
Ken Zwick, Assistant Director of the Forest Products Laboratory, offered a perspective on sustainable solutions during the FRA meeting. In his session, “Sustainable Solutions from the Forest Products Laboratory”, Zwick discussed how innovation in wood products and supply chain logistics could help mitigate some of the cost pressures facing the industry.
“Sustainability isn’t just about environmental stewardship; it’s also about creating efficiencies that reduce costs and improve resilience,” he said. “By leveraging new technologies and best practices, we can help the industry navigate these challenges.”
October 2026 2026 report also sheds light on the growing role of seaweed cultivation in coastal economies. The cold, nutrient-rich waters off British Columbia and Alaska host more than 500 known seaweed species, and commercial-scale farming of kelp is expanding for uses ranging from food and fertiliser to bioplastics and biofuels.
In 2025, Alaska produced approximately 240,000 pounds of seaweed, while British Columbia’s output exceeded 165,000 pounds in 2023. Seaweed farming, which requires no added feed, land, or fresh water, is seen as a sustainable way to diversify local economies and improve coastal water quality.
However, the report cautions that the freight industry’s current gains could be short-lived if fuel prices continue to rise. As Tim O’Hara, President and CEO of the Forest Resources Association, noted in his “FRA Public Policy / Advocacy Update”, “The freight market is at a crossroads. While intermodal transport is providing a lifeline for shippers, the broader challenges of fuel costs, regulatory pressures, and economic uncertainty require a coordinated response from industry and policymakers alike.”
For now, the industry is watching closely as the year draws to a close. With consumer sentiment wavering and fuel costs showing no signs of abating, the next few months could determine whether the freight market’s recent gains are sustainable, or merely a temporary reprieve.
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