Data from U.S. railroads in March showed that the freight economy is recovering after a long period of uneven performance.
A broad recovery occurs
An analysis by the Association of American Railroads showed March 2026 delivered the strongest monthly performance for US freight railroads in years. Total US railcars averaged 230,401 for the week, representing the highest March result since 2019 and the strongest monthly average since October 2022. Year-over-year, carloads increased 1.7%, marking the third consecutive month of gains and extending the recovery trend that began earlier in the year.
First quarter vehicle shipments reached 2.68 million, up 4.2% from the same period last year. The strongest performance for the first quarter since 2019, suggesting that the improvement in rail volume is not a temporary blip but rather an ongoing shift in underlying economic activity.
A broad improvement saw 12 of the 20 largest vehicle load categories post year-on-year growth in March, continuing the pattern established in January. This widespread improvement shows that the commodity economy is stabilizing in many sectors at once, rather than experiencing isolated rebounds driven by temporary stock returns or concentrated activity in one industry.
Intermodal, which connects American consumers with global supply chains, showed renewed strength in March. Origins averaged 280,076 units for the week, the second-highest March rate on record and a 1.4% increase year over year. It was also the second consecutive monthly increase in motor vehicle traffic after an extended lull.
While year-to-date average prices remain slightly below last year’s unusually strong levels, March’s improvement highlights the strengthening of consumer-linked asset flows. The intermodal network continues to play an important role in long-term domestic consumption, and the reduction in low pressure suggests that more time for adaptation following the disruption of the pandemic season may be nearing its end.
Grains emerged as the single largest contributor to volume growth in March. US railroads began loading more than 97,000 cars, a 10.3% increase over March 2025. First-quarter volumes reached their highest level for any first quarter since 1993, driven by strong export demand and robust global consumption despite ongoing US tax reforms. Mill products increased by 6.2%, while biofuel production plays an important role in fueling grain processing, supporting investment in rural areas and producing long-distance rail-related products.
Chemical shipments continued to perform well, reaching a record weekly average of 35,580 carloads in March, up 5.5% year-over-year. First-quarter volumes set a new record as producers benefited from lower domestic natural gas prices that provide both energy and food supplies. As global manufacturers reassess their supply chain strategies, chemicals are riding the rails on a steady domestic production fleet and strong export demand.
Petroleum and petroleum increased by 7.7%; waste and non-ferrous scrap recorded one of the strongest gains at 12.6%. Exports of coke also increased by 12.3%, while cars and parts increased by 2.6%. Stone, ceramic, and glass products gained 2.7%, and iron and steel metals rose 2.6%, continuing the ongoing shift toward electric arc furnace steelmaking that relies heavily on recycled inputs. Food products increased by 1.3%; lumber and wood products rose 1.4%, while farm products other than grain gained 1.3%.
Not all categories are shared in return. Basic steel products fell by 8.7%, reflecting a long-term reduced movement tied to lower steel sales than a significant deterioration in domestic industrial activity.
Iron ore fell by 12% in line with shifts in domestic steel production patterns. Crushed stone and sand decreased by 3.8%; pulp and paper products decreased by 4.6%, and primary forest products decreased by 6.9%. Motor vehicles not elsewhere classified fell by 3.3% while non-ferrous minerals fell by 1.9%.
Coal remains the biggest drag on full-size cars but is showing signs of recovery. March shipments totaled 236,000 vehicles, down 1.5% year over year. However, average weekly volumes hit their highest level in six months, and year-to-date coal prices are up 3.3% compared to the same period last year. Coal will account for 16.6% of US electricity generation by 2025, and rail continues to transport more than 70% of coal shipments.
In March, non-coal carloads totaled 171,338 for the week, the strongest March rate since 2008 and the highest monthly rate since August 2019. The year-over-year increase was 2.9%. Year-to-date estimates are up 4.5% and are the highest since 2015. These numbers point to real stability and renewed momentum, conditions that often precede economic expansions rather than contractions.
The AAR Freight Rail Index, which captures rail traffic that is highly sensitive to broader economic conditions, provides insight into whether current momentum reflects cyclical fluctuations or structural improvements.
The index fell 0.3% in March after two months of gains. On the surface, this pullback may seem concerning. However, in context, it is always constructive. Average FRI levels in the first quarter reached their highest level in nearly five years, consistent with continued expansion in heavy goods-bearing sectors such as manufacturing, construction inputs, and export-oriented manufacturing.
Short-term fluctuations in the index often reflect the effects of timing or weather-related shifts rather than a meaningful change in direction. Considered a leading indicator, FRI suggests that rail traffic availability is not looking back. Instead, it shows work still working its way through production pipelines and supply chains.
AAR said the rail recovery is taking place against a complex economic backdrop that provides both support and potential headwinds.
Productivity indicators have become more positive. Output rose 1.3% year-on-year in February, while the ISM Manufacturing PMI reached 52.7% in March, its highest reading in more than three years. The PMI has now remained above the 50% expansion threshold for three consecutive months, indicating a return to growth after two years of uneven output. If continued, AAR said, this production recovery will provide extensive rail support across multiple freight groups.
The services sector remains strong, bolstering demand for consumer and business activity that is essential to the transportation of goods between transit and finished goods.
However, great dangers lie ahead. Inflation continues to run above the Federal Reserve’s target, creating uncertainty about the path of monetary policy. Renewed international tensions, particularly in the Middle East amid the ongoing war with Iran, have returned volatility to energy markets. Rising diesel prices eat directly into supply chains, creating cost pressures even as prices rise.
Natural gas prices rose in late January and early February when a powerful Arctic storm sent US heating demand soaring at the same time that a freeze in the gathering system took much of US natural gas production offline. A combination of growing demand and temporarily reduced supplies kept prices up in early February, when temperatures moderated and production returned. Notably, unlike gasoline and diesel prices, US natural gas prices did not increase in March, maintaining the competitive advantage of domestic chemical producers.
Labor market indicators present a mixed picture. Job growth fell between gains and losses over the past year, as early March added 178,000 jobs following a sharp decline in February. Unemployment is falling sharply, and layoffs remain low, pointing to moderation rather than recession. Wage growth continues to support consumer spending, but a prolonged period of stagnant employment could end up weighing on assets.
Consumer spending has held steady despite the challenges, although growth remains modest and consumption of goods has softened compared to services. In rail, any further decline in consumer activity could be seen first in inter-track volumes.
The march of trains in March 2026 delivered a clear message: the freight economy is on the rise again, and that momentum is broad rather than weak. Prices are improving even as inflation, energy costs, and labor force remain unaddressed, pointing to a dynamic economy rather than overheating or stagnation.
The combination of record chemical exports, the strongest grain prices since the early 1990s, and motor vehicles excluding coal arrivals at levels not seen since 2008 paint a picture of real improvement across the industrial and agricultural sectors. Intermodal’s return to growth suggests that consumer-connected supply chains are recovering after a long period of adjustment.
Yet the data also shows a lesson. Growth is visible but conditional, underpinned by energy markets that remain sensitive to country risks, the power of volatile currencies that have proven stubbornly persistent, and labor trends that remain volatile. Railroads sit at the crossroads of manufacturing, commerce, and energy, and March showed that this intersection is getting very busy.
As these macroeconomic forces continue to emerge, train movements will always be clear early indicators of whether growth is really strengthening or slowing down before the next challenge emerges. For now, the numbers point to the economy to find out where it stands, even if the margin of error remains small.
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Read more articles by Stuart Chirls here.
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