Cloudy with a Chance of Carloads

The forecast is calling for grain, grain, grain…with a slight chance of geopolitical disruption + a 40% probability that everything changes again before next week.

In Cloudy with a Chance of Carloads, Harris + David return with Telegraph’s Q2 2026 Market Consist. As we head into summer, they break down what they are seeing in data - mostly that grain carloads are looking really strong, chemical moves are definitely facing headwinds, + that shipper-friendly market we’ve all enjoyed this last year? It might just be closing up shop.

With the USMA renegotiation up in the air - which could easily impact cross-border freight volumes - the fact that 2026 is basically tracking on par with 2025 is actually something close to good news. 

Talk Track, hosted by Harris Ligon + David Correll of Telegraph™, is a spin-off series dedicated to timely rail industry news. From service shakeups to technology breakthroughs, each episode delivers a behind-the-scenes perspective on all the happenings shaping the future of freight rail. 

Harris + David will bring their decades of rail experience to help them parse through the latest industry headlines, evolving regulations, + the long-term forecasts for how railroads move freight across North America. Find us at telegraph.io/insights, Apple Podcasts, Spotify, or wherever you listen to your favorite podcasts. 

About Our Hosts

Harris Ligon is the co-founder + CEO of Telegraph. Prior to launching Telegraph, he spent nearly 15 years in surface transportation at Uber Freight, Norfolk Southern, + BNSF Railway. During this time, he led teams in operations, strategy, business development, + product development. 

David Correll is the Director of Freight Market Intelligence at Telegraph. He has spent two decades in transportation and logistics with the US Department of Transportation, the US Department of Energy, the Massachusetts Institute of Technology, and Clark University.

About Telegraph

Telegraph is a leader in delivering digital solutions to railroads, shippers, logistics service providers, terminals, + railcar leasing companies. With an integrated platform that prov...

Transcript

SPEAKER_01 0:06

Hey folks, welcome back to another episode of Talk Track, a telegraph podcast where we talk about and respond to the events of the day that affect the railroading community. And um by the railroading community, we mean railroads, shippers, equipment owners, 3PLs, terminals, and everybody that comes together to make the world uh of freight railroading move. So uh I'm joined today by David Correll, and we're gonna be jamming through the next installment, which is now our third of the market consist. Dave, uh live from Boston. How are we feeling this morning?

SPEAKER_00 0:47

Feeling great. Um feeling sympathetic to you. I know you've been traveling all over the country leading into this, so uh appreciate the time we get to talk through what we've been working on.

SPEAKER_01 0:57

You know, I I was super excited about this conversation. You know, it's it's been interesting because there's been a lot of kind of broader uncertainty in the geopolitical landscape, and it feels like we're constantly responding to forecasts or ideas. Something may happen, something doesn't happen. And so I think one of really the you know, the founding principles that we had in Telegraph was how do we actually simplify all of the complexity that is going on, not necessarily just in the world, but more localized to freight railroading. And so we're now in this kind of third version of these quarterly outlooks that you've been really shepherding and evolving and iterating on. Um, from your perspective, do you think we're we're kind of meeting those goals that we set out to accomplish?

SPEAKER_00 1:43

Gosh, that's such an interesting way to frame it. I, you know, I think so, but but partially, of course, you know, and I think about the broader, you know, telegraph mission and the things that all the other team members are working on that I think make it more navigable in a uh much more practical way, the demurrage pieces, the billing pieces, the visibility pieces, you know. So this is one small contribution, I hope, to that that broader effort. And in in that sense, I think we are, you know, thinking about you know why do I think we got there. You know, we've worked now with some of the same data sets for you know three separate reports, and I think we really have a handle on um trend and momentum in the railroad in market, so like where volumes are at and where they're going. Uh, we really have a handle on seasonality and cyclicality across different commodities. So, you know, and that all contributes to the accuracy that we talk about in the report. So as far as helping people understand volumes on the railroad, you know, I think we have made some progress there that I hope you know readers are are appreciating.

SPEAKER_01 2:45

And one of the interesting things, you were you were very uh thorough and thoughtful about we should always measure our accuracy. Every time we're kind of taking that in. And so I know we'll talk about accuracy a little bit later. But one of the things you've also shared, lamented, shared, that rail suffers from we kind of exist in a tale of two cities. The storied indicators where you begin to do some trend analysis, but we're also beneficiaries of some live real-time data of what is happening minute to minute, day to day, week to week within the broader rail industry that eventually builds into what we typically see on a monthly or a quarterly basis. Um, tell me a little bit about some of the trends and seasonal cyclicality that you've started to see now that we're in version three.

SPEAKER_00 3:37

Sure, gosh. So, you know, it really depends on which measure you're looking at. But you know, starting at the top with the car load and the intermodal, you know, I think with car load we've seen long-term decline with some variability around um harvest season in particular. So that's something that we've been working on. You know, with intermodal, it's it's been really interesting, particularly since you know we started this a little under a year ago, but you know, the last year is really our training ground, if you will. So, you know, intermodal is um on a different trajectory, growth engine, if you will, and we're not the first people to say that. But we've been able to observe how sensitive the intermodal volumes are to what's going on in the world and what's going on in policy. So that was a bit of a deviation from you know cyclicality. I would say cyclicality or seasonality, strong in car load. We leverage it to pretty good effect in terms of our accuracy. On the intermodal side, there's seasonality we've observed, particularly around Q4 and some of that end-of-year rush. But really, what is the most exciting and interesting thing to me is the sensitivity we've observed there to current events both at home and abroad.

SPEAKER_01 4:52

Right, right. You know, and going back to kind of the the weather forecast narrative that that we've kind of thought about it is um there's always a wild standard deviation in what is predicted to happen, what actually happens right. And so just because there is a chance of rain doesn't mean that it'll rain. It just means that there is some probabilistic outcome, right? So when when we when we take that and we apply it to the space that we're operating in. What do you think is gonna happen in the next kind of six months? Uh, you know, especially as we get into summer, which Q2, Q3 tend to be a heavier rail period.

SPEAKER_00 5:29

Gosh, yeah. And I think that's that's what we're seeing, but with a little bit of context. So in the headline predictions that are coming out of the draft, slightly softer volumes, carload and intermodal. But you know, I think it's important to put that in context. By softer, I mean comparing this year to last year. And, you know, as you know, people might remember, this year last time was the time of the announcement of the Liberation Day tariffs, the reciprocal tariffs. There was a lot going on in the market, including um a lot of pre-positioning of goods ahead of the actual enactment of the tariffs. So, you know, one thing I think you know, we see things on par or a little bit softer, but that's actually, I think, good news, really, because in in some sense, at this time last year, some people were predicting economic fallout, complete collapse of global trade. Those things really aren't transpiring, and we're basically on track with where we were last year, despite you know, numerous headwinds. So that's you know the first big headline, a little bit softer, but in a way that I think we can interpret as signs of resilience or or good news. The other big headlines that I see between now and summer over the time horizon of our prediction, very strong for grain carloads. You know, just I think momentum in the market and some other facts really lead our models to suggest a really busy next several months for grain carload movement. And the flip side of that, a a weaker next few months for chemical movements, for carload chemical movements. So I think those are the big takeaway headlines of the report we'll be releasing.

SPEAKER_01 7:12

So to kind of distill that a little bit further, right? So we're a little more bullish on grain carloads, a little less bullish on chemical carloads. And so to kind of like think about that, one of the really interesting things about those supply chains, we'll start with grain first, is that there is kind of there's almost like a mini supply chain where you're basically sourcing out of the fields, taking to a local probably elevator or some storage facility, and then that inventorying capacity relative to the rates that are out there in the broader market kind of dictate how I basically you're gonna you're gonna empty that that elevator. Is that and is that right? And am I am I thinking about that that right? And why would that support better car plates?

SPEAKER_00 7:55

No, you're you're 100% thinking about that right. And and grain is such a a perfect commodity for studying essentially the rail infrastructure and network because it's you know it's how it moves. So that that's part of you know why we see a strong next several months through through um through the summer. But I think you know a bigger thing is there's just some momentum also coming out of a very strong crop here last year. Yeah and stockpiles that need to move. And and I think just to add nuance to your point, in part they need to move because I think, and you know, the the people who are making those decisions for their own product think that there's potentially weaker corn prices, for example, coming up ahead of this year's harvest. So I think there's a lot of uh sentiment that that stuff needs to move in the near term.

SPEAKER_01 8:46

So thinking about this this kind of very uh massive intersection between what you're talking about in chemicals and then this broader kind of geopolitical mix of of oil, oil availability, oil price, oil processing, oil refinement, the difference between sweet and sour, and obviously those distillates coming out and kind of impacting the broader chemical market. You think near term it's going to be a softer chemical market? What are what are some of the factors kind of kind of driving that? And how much is that really related to what's happening many oceans away?

SPEAKER_00 9:22

Gosh, excellent question. So there's two things. You know, one, just the momentum in the time series itself, which is just to say, you know, what's been happening in recent history, suggests that things are not picking up there. It's it's not been a growth market leading up to this environment. And then it got hit with the energy prices. And we see very strong sensitivity between the input energy price and the production of uh chemicals in in the U.S. So when we put those things together, there's really no momentum coming into the next six months, and there's significant headwind from energy prices. That really led to, you know, strong declines in the runt of the model that we're taking into the right-up right now.

SPEAKER_01 10:06

I think one of the one of the things I've definitely been more thoughtful about recently is there are there's definitely it feels to me that there is a disconnect between consumer sentiment and inflation, and maybe potentially what we're seeing in the headlines around manufacturing or the consumption of chemical inputs to drive a manufacturing process to deliver a good out there. Do you do you think, and I and I know I I'm getting a getting a little ahead here, but do you think there is potential more upside in the back half of the year for the chemical markets, absent some of the items around oil prices?

SPEAKER_00 10:44

Gosh, it's it's it's a really interesting thought experiments. I think to take the energy prices out of the prediction for the chemicals market, so I'm a little bit reluctant to do it just because we know that's such a strong driver. If we you know we do that and we think, all right, but let's do it, is there a reason to think that because the consumer spending shows strength despite these storms, the chemical production and movements will too. I don't see it myself. You know, I mean I think when we're talking about tank cars full of chemicals moving on the rails, we're thinking about industrial production. And, you know, I I just don't think that uh America as a manufacturing economy has a lot of things to point towards near-term strength. And and that's where the chemicals play. You know, I think one of the things that's been puzzling is as we think about the broader economy, is you know, I think there's reason to believe that that manufacturing is uh struggling, but consumer spending and stock prices are thriving. And that distinction between, you know, what I would call the production economy and the paper economy has really been vexing as an analyst for a while. And and personally I love it that um you know we're trained to focus on the production economy because that's what's moves on the railroads, and I I I just don't think there's strong reason right now to believe that there's a uh resurgence of production coming in the next six to twelve months, even if I do the thought experiment of taking the energy crisis out of it.

SPEAKER_01 12:19

Okay, interesting. Interesting. We should do more of those thought experiments as speaking of thought experiments. I think you spent some time working on some lobster rolls at MIRS last week. One of the things that I've always enjoyed and I think really changed the calculus of a really good rail shipper conference is how much pontification is actually grounded in what is actually happening. And so I know that you had a ton of conversations. Um how are some of those predictions lining up with the report? Did you did you make any chains or any adjustments on some of the feedback that you've that you've seen? And and what were some of the responses to folks who who had been reading the report?

SPEAKER_00 13:00

Yeah, gosh, definitely the upcoming report is influenced by those conversations. And so I just want to thank that community for, you know, having really fun conversations, often over lobster rolls, some over drinks, um, you know, really tearing into these ideas with the pros who deal with it every day. And and and I'm gonna come back to the energy crisis for a second, just because I I do think it's the sort of the the most important thing to think about as we think about what's gonna happen over the next six months.

SPEAKER_01 13:29

It's like a vortex that we cannot escape in these conversations.

SPEAKER_00 13:34

Yeah. I went into it with um a somewhat mathematical thesis around um crude by rail shipments as a result of the energy crisis. And uh leaders of the room.

SPEAKER_01 13:53

Dave, please continue.

SPEAKER_00 13:55

Fair. No, that's fair. Went in with the idea that, you know, and and people who have observed this market for a while will know, but but you know, maybe not everyone has. We used to move a lot of crude oil by rail in this country, particularly around 2014. It was something like a million barrels per day. So, you know, there was a time when there was a lot of crude oil moving on the railroad tracks. Since then we've moved less of it, you know, and it for two main reasons. One, new pipelines were built, and two, the price hasn't justified the cost of, you know, the price premium of moving crude by rail over by pipeline. So, you know, as these prices have really skyrocketed or, you know, up fifty percent or more, um, as a result of the conflict in the Middle East, my mind started to think, oh gosh, at that price point, there's got to be people who are going to think, well, it's worth it for me to move on rail again. And the second part of that is because I may want to try to export that crude oil to you know places where the differential between the US price and the European price, for example, opens up new business opportunities.

SPEAKER_01 15:04

So I went into the Welcome to Commodity Trading 101.

SPEAKER_00 15:08

Precisely, precisely. So so I really thought, okay, there's there's an interesting angle, and you know, you and I even kind of talked in our offline conversations about when you know when might that happen, and if the mathematical models don't suggest that will happen, when is it appropriate to override our mathematical models if we have strong conviction that's the case? So luckily I got to go have some lobster rolls and beers at NEERS uh and see is that real. And what I heard back was not right now. And the the piece that was missing in that thesis, and you know what the community was sharing with me there was that it's prohibitively expensive to re-equip a tanker car to carry crude oil right now. There's all sorts of things you have to do with that asset that are you know expensive and time consuming. And you know, the people that I was talking with were the people who actually make those decisions. And they told me that, you know, at this price point we're not thinking about it. At this sort of world outlook where we don't know how long this will last, it doesn't feel like it's worth our investment. So, you know, they really pushed back on that thesis. I will say, uh, maybe in a little bit of uh defense of the idea, when I said, okay, but what if we hit $200 per barrel oil? Then eyebrows raised.

SPEAKER_01 16:27

What a wonderful thought exercise.

SPEAKER_00 16:30

Yeah. And it was really a helpful thing to take the essentially mathematically based prediction out into the airy light of day and talk with the experts who would have to live with it and hear, you know, where it survived stress testing and where it didn't.

SPEAKER_01 16:47

You know, what's interesting here is you came into Nears, pretty strong bias towards a certain idea. Also interesting that the folks that you were likely engaging with probably have a strong bias, which is informed on post you know 2014 Red Hot Chili Peppers about a unique kind of perspective around how they would think about allocating the tank cars, the commodities, the spreads on the trades that they potentially could make, right? And so it was an interesting mashup of biases in these conversations. I'm really glad you were there and had the opportunity uh to have those conversations. Really kind of two more questions for me really kind of pop up. And so you were you were thinking like we've kind of been pulling the thread of geopolitical pieces. Um when we think about the oil, you know, like is 100 enough? Is that 150? Is it 200 right? Um, and there isn't really like right now any good ration, like mathematical rationale to to really kind of back that up. What when we when we think about some of the emerging trends that that you're seeing, what's what's the implications of the geopolitical pieces around USMCA or some of the other trade deals that we're kind of thinking about? Any any interaction there or is it kind of just fluff right now?

SPEAKER_00 18:02

Well, I think very real interaction, and and there's so much news going on that it's easy to lose sight of the things that aren't in today's headlines. And you know, I think for most readers, the USMCA negotiation is not part of their you know daily news feed, but I believe it's important enough that it that it should be. So just to back into that for anyone who isn't following, um there's a uh United States-Mexico-Canada agreement, USMCA, that really has protected a lot of North American trade from the tariffs that you know have been posed in the last year, and a lot of that stuff moves on rail. You know, and people might be surprised to know how much um consumer goods were actually moving into Mexico and back and forth.

unknown 18:47

Right.

SPEAKER_00 18:47

And then there's there's a lot of raw materials that come from Canada into the U.S. at prices that allow manufacturing and home construction and all those important things. And that trade has been in large part insulated from uh the recent trade tensions by that agreement. That agreement will be renegotiated or revisited as scheduled in July. If it were to fall apart, I think volumes and a lot of important lanes would would really suffer because it would just economically stop making sense to make some of those moves under a higher tariff regime.

SPEAKER_01 19:25

Yeah, I mean look, uh Larry Gross, if you're on if you're listening, I know that you have spent an entire career thinking about the the imbalance of empty containers flowing into Mexico and then loaded containers flowing back. I I mean, yeah, the the entire reset that we would see from that would really, really be disruptive to the entire thematic piece that you've talked about before of near shore, and which has been really enabled by the the that agreement. Okay. So, final question here in thinking about the consist getting its final touches and being shipped out the door, what are some of the actionable pieces you would love to share with some of the readers? And why why should people get excited about this third iteration?

SPEAKER_00 20:11

So, you know, why I think people should be excited is um, you know, we're we're doing well with our predictions on volumes and we're holding ourselves accountable. So, you know, we're sharing what we predict and how well it performed. So, you know, I think for free, that's worth your time if you're interested in it. And with each iteration, we're adding more detail and nuance. So we're bringing in new commodity sectors this time that you know didn't exist in the previous reports, and we're gonna continue to expand that way. So it really I think gives people an even more detailed picture of what they can expect in their business over the next six months. So you know, and and at the current price point, I I think it's worth it. Uh the the takeaways that that I would want people to to you know distill from it, you know, one, we see I think sort of a closing window on the shippers market that many of our readers have enjoyed for the last year plus. And and we see that in in a lot of ways, you know, one you would say, well, you're seeing these declining, slightly declining volumes in your forecast. How does that mean that that's changing? You know, I think it goes back to this year being like last year is a sign that that there's more freight moving into the market. There's also signs around you know what we see in the truckload market happening right now. I think there's real reason to believe, and and we can provide the substantiation of that in the text, that things may be returning more towards the carrier's favor. Now, obviously in railroading that balance of power is much different than it is in trucking, but yeah, that's one thing that that I hope readers would, you know, appreciate the early signal of that we're providing in the report. And then the other thing. Is around at the commodity level where the opportunities are and where the opportunities are perhaps moving on from. And I think we talked a little bit about grain chemicals, petroleum products here. You know, we see strong grain opportunities coming up, weaker chemical opportunities coming up. Longer term, I think some of those things may flip. Uh, but but I hope readers would take away the opportunity to sort of see around the corner, if you will, of you know which commodities will be moving between now and um America's 250th birthday uh in July.

SPEAKER_01 22:38

Well yeah, that's right, coming up. We're gonna have a big summer. Yeah, Dave, just to kind of kind of pull on that thread a little more and wrap it up. Demand finally now showing up and kind of finally being priced into the into the market where truck rates beginning to tick up. What is the lag between that and intermodal rates or the truck rates and the car load rates? There's always been some sort of lag. And I think like as we begin to see that that delta close over the next several months, like I think people need to be very aware of that. And I, as you know, was with some customers last week, and one of the thematic pieces we keep hearing is um wanting to leverage more the data that we have in market consists to continually think about reshuffling the deck, right? As commodities evolve, how many rail cars are we allocating to that? How do we want to handle maybe maintenance of those rail cars or the facilities that we're shipping into? Like where is that all falling? And so um it's been really good to share that narrative with uh customers. And I think that maybe shuffling the deck is gonna be a thematic piece for the rest of the year. So, with that, Dave, another really good, healthy conversation. Hopefully, you are recovering from the honeymoon of lobster rolls at Nears and really looking forward to some of these unique insights as can be rolling out in this next version of the market contest. Thanks for taking the time to join. For those of you listening in, thanks for taking the time to listen and feel free to send any questions in. And as always, we are happy to uh be chatting more uh in the latest episode of Talk Track from Telegraph. Thank you.