In the face of economic volatility, the performance of rail freight serves as a crucial barometer for the broader economic landscape. The latest Railroad Industry Overview (RIO) report from the Association of American Railroads (AAR) reveals divergent trends in June's rail freight data, with domestic shipments growing while cross-border traffic declined—a development prompting deeper analysis of the US economic outlook.
Rail Freight as an Economic Indicator
AAR Chief Economist Rand Ghiaard emphasized that the RIO report consolidates key findings from approximately 45 reports the association produces for various stakeholders. "Rail volumes are typically a strong indicator of economic health," Ghiaard noted. "When rail performs well, it generally signals economic strength, while weakness may reveal underlying economic challenges."
The Freight Rail Index (FRI) , which measures economically sensitive rail traffic, fell 0.5% in June 2025 compared to May—marking its lowest level since May 2024. This decline was primarily driven by cooling cross-border shipments.
Diverging Domestic and International Trends
Total US rail carloads in June actually reached 905,034 units , representing a 2.1% year-over-year increase and marking the first four-month consecutive growth streak since late 2021. The AAR report highlighted that several major freight sectors demonstrated resilience despite economic uncertainties.
However, cross-border freight told a different story. June's international shipments totaled 1,043,335 containers and trailers , a 2.9% annual decline that represents the first year-over-year decrease in 22 months. AAR analysts linked this trend to broader uncertainties in global supply chains.
The second quarter of 2025 showed more complexity, with cross-border volumes rising 2.0% year-over-year , suggesting fluctuating dynamics in the US rail freight market.
Future Outlook Remains Uncertain
Looking ahead, AAR anticipates that cross-border freight performance will be shaped by multiple factors, including evolving global supply chains and the strength of consumer-driven freight demand. In this economic environment, rail freight volumes may reflect competing forces—some supporting recovery while others present constraints.
While total rail carloads for the first half of 2025 reached 5,705,567 units (a 2.4% increase over 2024), the economic trajectory remains difficult to predict.
AAR's conclusion : In today's uncertain economic climate, while some sectors show positive performance, overall freight volumes require careful monitoring to adapt to shifting market demands and economic conditions.