The latest rail traffic data is in, and it paints a picture of a broadening economic recovery. The industry's Freight Rail Index, which measures seasonally adjusted rail volume excluding coal and grain, has climbed to its highest level since 2008 after four consecutive months of gains, according to Association of American Railroads (AAR) data — a significant rebound in the industrial sector that suggests economic expansion well beyond data centers alone, with implications for the future of manufacturing and logistics. The AAR, the trade group representing major freight railroads in the U.S., Canada, and Mexico, publishes weekly traffic figures that are among the timeliest available gauges of the goods economy, since the network carries the raw materials and finished products of manufacturing, construction, energy, agriculture, and consumer freight.

The weekly detail backs up the monthly trend. North American rail traffic rose 3.6% in Week 31, with carloads up 3.9% and intermodal up 3.3%, according to AAR figures, with growth spread across key segments and clear shifts in freight patterns across the network.

The readings matter to carriers, brokers, and shippers because rail volume grew faster than overall GDP during the period — a milestone that, according to Bill Stephens, has not been seen since before the Great Recession.

"Rail traffic grew faster than overall GDP," Stephens said. "We haven't seen that in a long time."

Volumes strengthen once coal is stripped out

Stripping out coal, the numbers look even stronger. U.S. carload volume excluding coal was up 4.7% in Week 31, well ahead of the flat volumes recorded over the prior four weeks. July carload traffic, also excluding coal, was up 3.2%, while intermodal set a record for the month of July with a 6.1% year-over-year gain — its sixth consecutive month of growth. Overall carload traffic, meanwhile, posted its seventh straight month of expansion.

"Manufacturing and rail activity are moving along together. The manufacturing is expanding at a pace not seen in several years, which underscores the close link between factory output and rail volumes," Stephens said, citing AAR's Rail Industry Overview released the week of the data.

Intermodal draws freight away from trucks

Intermodal's momentum is drawing freight away from trucks, with a 34% price discount between intermodal and truckload rates cited as a key driver of the shift from road to rail. Intermodal — the movement of containers and trailers carrying largely consumer and international goods — is the largest single source of traffic volume on U.S. Class I railroads, so shifts at that price spread ripple across both modes. Price gaps of that size historically matter most on longer lanes, where rail's lower cost per mile can offset slower and less flexible service.

FreightWaves data showed both the Truckload Volume Index and loaded rail container volume rose exactly 4.4% over the most recent three-month period — a near-perfect offset that helps explain why spot truck demand has not accelerated despite the broader freight recovery.

Stephens noted that shippers typically need a sustained belief in economic stability and tight capacity before committing to intermodal conversions.

Geographically, growth is shifting. North-south corridors — particularly Chicago-to-Atlanta lanes and new intermodal services connecting Mexico's industrial regions to the U.S. Southeast and Chicago — are outperforming the traditionally dominant, and now mature, Chicago-to-East Coast lanes that have long anchored the network. That pattern tracks with cross-border flows at Laredo, Texas, which in recent years has ranked as the busiest U.S. land-freight gateway as manufacturers have expanded production in Mexico.

Court upholds FRA two-person crew rule

On the regulatory front, a U.S. District Court upheld the Federal Railroad Administration's two-person crew rule, which the FRA finalized in 2024. The rule requires two crew members in the cab of most mainline freight trains, a longtime safety priority for rail labor unions; the FRA first proposed crew-size minimums in 2016 before withdrawing an earlier version in 2019. Several Class I railroads, the AAR, and the Short Line Association had challenged the rule as arbitrary and beyond the FRA's authority. The decision leaves open whether the railroads will pursue further appeals.

Fuller noted that the ruling creates a tension with broader Department of Transportation policy encouraging autonomous truck development, with railroads arguing that the crew mandate prevents them from exploring single-person or autonomous operations.

Separately, Amtrak is facing locomotive availability problems in the Midwest, prompting Stephens to file a Freedom of Information request with the agency Monday morning to determine the scope of the issue.

The near-term markers for the industry are straightforward: the AAR's weekly releases through the traditional late-year shipping peak, whether the railroads appeal the crew-rule decision, and how quickly intermodal conversions and the new Mexico-linked services scale.

Taken together, the numbers define the current state of the industry: the AAR Freight Rail Index (excluding coal and grain) at its highest level since 2008 after four straight months of gains, U.S. carloads excluding coal up 4.7% in Week 31, a July intermodal record with 6.1% year-over-year growth, and a U.S. District Court's upholding of the FRA's two-person crew rule that leaves railroads' path to autonomous or single-operator trains uncertain.