Intermodal freight is delivering significant savings in a volatile freight market as truckload spot and contract rates stabilize, according to FreightWaves SONAR data presented by Julie Van de Kamp during a live update from the College Football Hall of Fame.

On the Harrisburg, Pennsylvania-to-Atlanta lane, one of the top savings lanes in SONAR’s intermodal dashboard, van spot truckload rates are up about 42%, van contract rates are up about 26%, and intermodal rates have increased only 16%. FreightWaves said the disparity makes a strong case for mode conversion on qualifying lanes, especially where shippers can compare the all-in cost of truckload against intermodal linehaul and fuel charges.

East Coast corridors, especially those out of Atlanta and Harrisburg, are leading the savings rankings. Lanes including Atlanta to Chicago, Atlanta to Joliet, Atlanta to Elizabeth, New Jersey, and Harrisburg to both Ontario, California, and Los Angeles have all been trending higher in the savings index over the past three months.

“That is such a good reason to consider mode conversion, take advantage of those savings, and understand where that helps even in a backhaul lane like what would typically be PA to Chicago at a length of haul that’s not transcon,” Van de Kamp said.

The broader market backdrop continues to support the intermodal value proposition. Tender rejections fell sharply between July 20 and August 5, but are now stabilizing. Spot rates, while lower than earlier year-to-date peaks, are also leveling off. At the same time, contract truckload rates continue to rise, narrowing the spread between spot and contract pricing and making lane-level comparisons more relevant for shippers managing freight mix.

Van de Kamp said the gap between spot rates on the NTI and contract rates on the VCRPM1 is about 66 cents per mile, while noting that spot rates are all-in and contract rates are linehaul only. She added that fuel surcharges are running at about $0.70 per mile based on a Department of Energy estimate of roughly $45.

Intermodal volumes are also increasing alongside the savings opportunity. SONAR’s intermodal dashboard shows volume trends picking up on key lanes, and Van de Kamp said the market will be watching whether higher intermodal adoption eventually pushes intermodal contract rates higher. She had previously expected intermodal contract rates could rise by as much as 8%.

Still, Van de Kamp suggested the current railroad merger environment could delay any rate increases. “I would posit that in the wake of the current merger situation, that the 2 railroads involved in the merger aren’t gonna really wanna make waves or give shippers or any of their customers any reason to oppose the merger,” she said, adding that competing railroads would likely follow suit to defend market share.

For shippers, brokers, and carriers, the near-term question is how the narrowing spot-to-contract gap and the continued intermodal savings window will affect freight-mix decisions heading into peak season. Van de Kamp said she expects spot rates to rise again, but said the ongoing increase in contract rates and the relative stability of intermodal pricing make the current period an important time to evaluate mode conversion on lanes that qualify.

Intermodal rates on the Harrisburg-to-Atlanta lane rose only 16%, compared with 42% for van spot truckload rates and 26% for van contract truckload rates. East Coast lanes out of Atlanta and Harrisburg, Pennsylvania, are showing the highest intermodal savings in SONAR’s dashboard, with volumes on those lanes trending upward.

A pending railroad merger may also suppress intermodal contract rate increases, which Van de Kamp previously estimated could reach as much as 8%, as the involved railroads avoid actions that could provoke shipper opposition.

This summary is based on a transcription of the interview. For the full interview, viewers were directed to the video above.