Tariffs have created a chaotic, uncertain freight environment, but rather than waiting for the outcome, shippers should consider taking advantage of improvements in intermodal rail, said Michael Baumgardt, senior vice president of intermodal at Schneider (CCJ Top 250, No. 6).
Freight providers need to adapt to customer needs because it's hard to predict exactly how tariffs will impact freight demand as customer behaviors and strategies vary, Baumgardt said Wednesday at the 2025 FTR Transportation Conference.
There’s opportunity on the intermodal side, he said, with service levels on rail improved with fewer delays and more consistency.
During Baumgardt’s keynote address, FTR Chairman Eric Starks asked, “So, is this the time for that opportunity for people to start looking at rail as an option?”
Baumgardt encouraged shippers to plan ahead before tighter conditions.
“It might have been the right time even prior to this, but no time like the present,” adding it’s better not to wait until a supply chain crisis to switch modes.
Timing and market positioning is critical for rail conversion, he noted.
“You don’t want to make those changes during a common crisis. It’s much easier to patch the roof when it’s sunny out versus when it’s raining,” Baumgardt said. “Now is a great time to take advantage of that.”
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Data shows imports dip, bringing inland freight pressures
ITS Logistics’ September forecast for its U.S. Port/Rail Ramp Freight Index reveals that the typical late Q3 to early Q4 spike in drayage activity will not appear this year, signaling a subdued 2025 peak season. U.S. containerized imports totaled 2,519,722 TEUs in August, up 1.6% year over year but down 3.9% from July.
The National Retail Federation projects tariff policies will drive a 5.6% reduction in overall inbound volume for 2025. Based on current year-to-year data trends, ITS Logistics noted that this could translate into a contraction of up to 17.5% in the last months of 2025.
Paul Brashier, Vice President of Global Supply Chain for ITS Logistics, said freight that was frontloaded earlier in the year is now moving inland, clogging key coastal rail lanes and driving elevated truckload demand in major U.S. distribution hubs.
ITS noted that shippers face a volatile mix of declining volumes, regulatory uncertainty, and inland congestion, highlighting the significance of diversifying transportation strategies.
Holistic assessment is needed
The combination of improved service, rising truckload costs in key inland markets, and a shifting regulatory landscape creates a favorable environment for modal conversions.
For shippers considering which mode is best for their needs, Baumgardt recommends avoiding treating transportation as separate parts of their supply chain.
Instead of looking at truckload, LTL, rail, or intermodal as independent operations, Baumgardt said to regularly assess the customer’s transportation strategy, “because that is continually evolving and changing.”
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J.B. Hunt (No. 3) also emphasized its modal indifference approach.
“We are really indifferent to the mode that shipment moves. We know that inside of our industry, shipment is going to ultimately move in its most efficient way,” said Spencer Frazier, executive vice president of sales and marketing at J.B. Hunt.
Frazier noted that intermodal is a significant growth engine for J.B. Hunt, and it plans for this growth to continue.
“The conversation of mode conversion for us to expand the intermodal market and expand our market share has accelerated,” he said. “We anticipate that to be a lever for customers going into 2026 to meet their match.”
Frazier also highlighted J.B. Hunt’s partnerships with railroads, particularly with BNSF, enabling them to operate efficiently across the country.
“We plan for that to continue, and however it makes sense to meet our customers’ needs," he said.
J.B. Hunt said it has “pre-funded our growth,” as they have invested in expanding their capacity ahead of actual demand. This included the acquisition of a significant container fleet on the intermodal side, Frazier said.
“We feel like we’re in a position to support growth when it does materialize on the demand side,” he said.
