This year, we connected with more than 30 senior transportation decision makers at North American retailers, manufacturers, and third-party logistics providers (3PLs), to determine what is influencing their surface transportation mode choices. As an update to our 2020 Shipper Survey, we asked decision makers at these companies to tell us about their pain points, what railroads are doing well, and what it would take for shippers to increase their use of rail.
Four key themes resonated with this group, offering important insights into shippers’ transportation decision making and what might encourage a more rail-forward outlook in the future: ramping up responsiveness, building closer customer ties, increasing service reliability, and aligning on pricing.
Rail service is improving but not market share
There is no doubt that the railroads have been ceding market share to trucking for the past decade, and that the market share gap is widening — to 22 percentage points in 2024. Respondents to our 2025 Shipper Survey reported improvements in rail service compared to five years ago, but railroads have not yet sufficiently addressed customer issues to see market share gains.
By far, “flexible freight” — commodities that could move by rail or truck — accounts for the largest potential market for rail in terms of ton-miles and is the fastest growing freight segment (Exhibit 1). Railroads have only a 19% share of flexible freight and have been slowly losing share in this segment as more shippers opt for trucking instead.
If railroads were able to simply stop the slide and hold their market share steady for the next decade, they could recover as much as $171 billion in incremental revenue by 2050, according to our analysis (Exhibit 2). This gain would inevitably come from the flexible freight segment. To earn this “freight with a choice,” however, railroads would need to provide shippers with better transit reliability performance and more customer-centric service than they offer today.
About half of the carload shippers and 37% of intermodal shippers we surveyed stated that they would prefer to ship by rail rather than truck. These figures suggest a neutral to somewhat favorable view of rail — one that railroads should be able to capitalize on if they could deliver a more “truck-like” experience.
For shippers that reported actively shifting away from rail and to trucking, half or more cited a lack of responsiveness from rail as a main reason. Ease of transacting and transit reliability also were cited as reasons for shifting more freight to trucking (Exhibit 3).
Shippers demand greater responsiveness from railroads
The majority of shippers we surveyed indicated that they want greater responsiveness from railroads, meaning communication that is timely, efficient, and proactive across all customer touchpoints, particularly in terms of speeding up decision making, enhancing claims resolution, and increasing shipment visibility.
Shippers indicated that more aggressively embracing advanced visibility tools and enhancing customer-facing capabilities could empower railroads to respond more efficiently to market changes and customer needs. Equally, quick decision-making is crucial for maintaining competitiveness. By addressing these areas, railroad could position themselves as agile and technologically savvy service providers in a rapidly evolving market.
Shippers want stronger long-term customer relationships
Railroads have made some gains in terms of being perceived as customer-centric, with half of respondents seeing a positive change since 2020. Nearly half, however, still believe that railroads could do more.
One thing we heard clearly from shippers this year is that they want to build individualized relationships with their transportation providers. A key focus area is that customers want to engage over longer, multi-year timeframes. Simplifying digital integration and data sharing to reduce the complexity and cost of doing business with railroads is another area where railroads could improve the customer experience.
Shippers need more reliable and predictable rail service
Predictability and consistency are what rail shippers crave. The experience of the past few years has left shippers reeling from rail service variability. The long hangover of the COVID-19 pandemic, chronic crew shortages, and major weather and operating disruptions have made shippers skeptical of railroads’ ability to maintain a high level of operating performance over a long period.
In part, this is a question of railroads’ smoothing the performance curve—but they also must strengthen customer confidence that they can be reliable shipping partners. This requires, among other things, being more transparent in terms of data that shippers can use to make informed choices between modes by lane, developing better processes to resolve local service issues, and working with shippers to develop steps on both sides to increase equipment availability.
Shippers seek more responsive pricing structures
Last but not least, pricing is a critical driver for rail volumes. All survey respondents that reported shifting freight from truck to rail cited price as a key reason. But shippers expressed frustration around structural pricing issues, including market responsiveness, the complexity and variability of pricing processes among railroads, and accessorial charging practices (especially demurrage). This is a situation that requires a willingness to compromise on both sides: Market-responsive pricing is only feasible if it enables a win-win long-term partnership. Certainly, rational partners with good intentions could figure this out.
Closing the rail-shipper gap requires joint action
Both railroads and shippers have a part to play in motivating and delivering a North American rail system capable of addressing supply chain needs now and in the future. We are confident that railroads can become more competitive with trucking for flexible freight, and that they can work with shippers to build stronger relationships that put freight back on rail.
