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West Coast ports see record volumes amid tariff shifts
Tariff trade winds and West Coast volumes
Demand was seasonally strong until May, when the short-lived 145% U.S. tariff on Chinese imports began to impact intermodal markets. After the tariffs on goods from China and other Asian countries were temporarily lowered for 90 days, the Port of Los Angeles handled 470,450 twenty-foot equivalent units (TEUs) in June—10% higher than the same time last year and a record for the month. This represented a 32% increase in volume from May. The port hit another record in July.
In preparation for a surge in freight out of southern California, railroads and intermodal providers pre-positioned containers, and that inventory buffer lasted through mid-July. As volumes began to ramp up, some surcharges over $1,000 were announced. While some shippers paused certain SKUs, others pulled demand forward, and nearly all importers began reassessing supply chain strategies.
Traditionally, peak intermodal season stretches through year-end. Barring significant changes, that is expected to hold. However, should importers meet inventory targets early, a softening in demand could occur ahead of the normal pattern.
The National Retail Federation (NRF) is forecasting double-digit declines in import volumes from mid-August through November. However, many shippers maintained standard import timelines either because their suppliers in Asia couldn’t ramp up production during the 90-day window that ended August 1 or based on optimism that tariffs on Chinese goods might be lowered further. If that happens, volumes could normalize at seasonally high levels, sustaining elevated intermodal pricing throughout peak season. This is contingent, however, on tariff stability in the months ahead.
Preemptive cost-saving opportunities
With peak season expected to extend through December, any shipper that can avoid moving freight during this period will likely benefit from reduced costs. If shipping during peak is unavoidable, deciding early and providing accurate forecasts offers the best chance at securing competitive rates.
Importers with annual rail commitments benefit from pre-allocated capacity. It’s crucial to manage these allocations effectively, remembering that a rail shipment only counts once a container is in-gated at the terminal and the volume resets each Sunday.
For importers with seasonal surges or project-based spikes, transactional costs could rise depending on the size of their surge. The most effective approach to securing spot capacity at the lowest rate is to maintain flexibility in ship dates and prioritize early-in-the-week bookings. Railroads often restock containers over weekends, creating more availability at the start of the week. Strategically shifting Friday pickups to Monday can yield notable cost savings. It's also important to remember that transactional rates may fluctuate week to week.
Looking at inbound freight to southern California, modest spot-rate reductions are likely in the near term with minimal capacity concerns. For intermodal lanes that don’t touch the U.S. West Coast (USWC), normal seasonal patterns are expected to continue. Some smaller markets may experience intermittent capacity constraints as container repositioning concentrates assets on high-demand corridors.
Intermodal rate outlook
Rail carriers continue to align spot rates closely with the truckload market, keeping pricing near the floor while waiting for truckload rates to recover. This approach could allow them to steadily gain market share.
Outside of California, spot rates are expected to remain relatively flat until 2026. With continued tariff-related uncertainty, North American intermodal volume growth is expected to remain challenged on a year-over-year (y/y) basis.
Committed pricing continues to show regional divergence. Outbound USWC lanes have experienced double-digit rate increases compared to March benchmarks. In contrast, most other regions are seeing average y/y increases in the 2%–5% range, consistent with trends observed earlier this year.
Intermodal service performance
Despite elevated volumes, intermodal service levels remain solid, tracking near or just below five-year averages. The network has sufficient latent capacity; the challenge remains positioning that capacity efficiently to meet demand. Even with California's recent surge, long-term container or chassis shortages in the Los Angeles market are not expected. For more insights on chassis availability, including potential chassis shortages at inland ramps, see the Ports & Drayage section of this report.