Friday Freight

Research evidence excerpt

Friday Freight

June 5, 2026

move volumes from airfreight to expedited ocean given high jet fuel prices, and

has seen rates for Matson's transpacific service move significantly higher over

the past month as well.

●Railroads (Market Overweight): We spoke with a housing products shipper

about recent demand and broader trends with the Class I rails. Volumes for

this shipper were sluggish to start the year because of continued weakness in

housing, but demand started to rebound since late March. While new home

purchases remain sluggish, our contact is seeing a pickup in sales tied to home

refurbishment and upgrades. Our contact also thinks we could be seeing a bit

of a pre-buy with some customers building up inventory levels ahead of pricing

resets given higher fuel input costs. Our contact is seeing particular strength

in the Southeast and mid-Atlantic states, and with volumes rebounding, our

contact has postponed some regularly scheduled plant maintenance. With this

recent rebound, rail volumes for this shipper are tracking up about 10% thus

far in 2Q. Moving to rail service, our contact has no major complaints except

for some issues around supply of centerbeam and box cars. Our contact is

considering adding a few additional cars to its private fleet of leased equipment

to make up for shortages in rail-supplied cars. Turning to rail pricing, our contact

expects 4%-5% rate increases on average, with UNP and CP seeking the

greatest increases. We also discussed the UNP-NSC merger, and our contact

believes that intermodal shippers can benefit from shorter transit times, but that

the merger has little to offer manifest shippers where slight decreases in transit

times are immaterial. Lastly, we discussed the trucking market and TL rates are

up 20%-30% y/y.