8 Trends Influencing Freight Rail in 2025

The 8 trends influencing the rail freight transportation industry in the United States in 2025 are:

1. Changes in the federal administration. The new president, Congress, transportation administration, and other appointments will affect the laws and rules they prioritize and administer. With the new administration comes uncertainty about how regulatory trends and priorities will evolve in 2025 and how those will affect our industry. However, we should all be prepared for changes.

2. The effects of tariffs. The new administration has said that they will use tariffs strategically to achieve economic results. Potentially, tariffs will be levied on imported building supplies, energy, food, and other products that are currently active rail customers. Reducing foreign imports could increase rail freight volume as customers seek a new chain of supply for these products now that they will be provided from North American sources.

3. Rising demand for bulk freight transportation by rail. As the economy continues to grow, total carloads transported are increasing, generating positive numbers in several key commodity groups. Although coal and automotive products and parts shipped are still below pre-pandemic levels, overall carloads transported are up and continuing to grow, led by intermodal, chemicals, and farm products.

4. The effects of “onshoring”— a changing global industrial paradigm. In 2023, Mexico surpassed China as the top importer to the United States. This new manufacturing paradigm moves more manufacturing from China to Mexico and other North American countries to bring manufacturing closer to U.S. markets. As North American manufacturing grows, U.S. rail, as part of the evolving supply chain, will also grow in use and volume.

5. Technology will achieve its tipping point, becoming a priority for the railroad industry. Although the rail industry has traditionally been slow to adapt technology such as AI, IoT, and robotics to operations, adoption has been growing exponentially in recent years. Technological advances are being implemented on a large scale and having a positive effect, creating efficiencies in managing loading, switching, car-tracking, maintenance and planning activities.

6. Sustainability continues to be a top goal of business. Railroading is the most energy-efficient mode of freight transportation. As companies continue to prioritize sustainability, there will be a growing reliance on rail transportation, over other modes, to help them improve their sustainability levels and goals.

7. Improved warehousing enhances freight quality and service. Warehousing is being transformed by technological advances. Today’s warehousing is more efficient and effective thanks to innovations such as AI, robotics, digital tracking, and more. Improved warehousing will grow rail freight volume because it makes the supply chain using rail freight more efficient.

8. The opening up of resource access to make rail more efficient. There is a trend toward more collaboration in opening track access and other resources to other rail companies, ultimately making shipping more efficient. The rail industry has also stepped up efforts to work with governments for greater access to ports, interchanges and other public facilities.

The rail freight industry is poised for growth, fueled by evolving technology, supply chain, political and economic influences.