What did the threat of a potential rail strike do to the freight market?

The potential for a labor strike by railroad workers was a serious threat to supply chains and the U.S. economy recently. That threat has largely come and gone as the unions have reached an initial agreement with the railroads, but that agreement is pending ratification from union members.

Just the threat of the rail strike led to worries across the freight markets, including how would shippers react as well as how would the truckload market be able to handle a shift of freight from the intermodal market.

While a strike was avoided, there were datasets within FreightWaves SONAR that signaled where the fears were as well as the reaction by the freight market.

Whenever there is a disruption, the first place to look is at tender rejections, but on the intermodal segment of the market, rejection rates are rarely above 1%. This time was no different as the intermodal marketing companies (IMCs) and railroads weren’t rejecting new freight, at least not at the time when the initial agreement was made.

Shippers were proactive in the situation though, moving loads from the railroads and transitioning them into the spot market. This reaction caused one of the steepest drops in intermodal volume this year, even when holidays are included.