This post was last updated on May 22nd, 2025.
In the dynamic landscape of Canadian freight and logistics, domestic intermodal shipping is rapidly evolving from an alternative solution to a strategic cornerstone for businesses focused on resilience, cost-efficiency, and sustainable growth. As we enter 2025, this method of combining rail and truck transport across vast Canadian distances is more than just a trend – it’s a competitive advantage.
The Canadian economy spans immense geographies – from bustling urban centres like Toronto and Vancouver to remote towns across the Prairies and Maritimes. This geographical diversity demands a flexible, efficient, and scalable logistics strategy. Enter domestic intermodal shipping: the practice of moving freight using a combination of rail and truck within Canadian borders, with minimal handling during transit.
Businesses across sectors – from manufacturing and retail to agriculture and pharmaceuticals – are increasingly leveraging domestic intermodal to solve complex shipping needs. With the ability to move goods more sustainably, reduce costs, and optimize supply chain flow, domestic intermodal has become an essential part of how Canadian companies operate in 2025.
Let’s explore seven compelling reasons why domestic intermodal shipping is surging in popularity and why your business needs to take note:
1. Cost-Efficiency Through Rail Dominance
Rail shipping offers significant fuel savings, which translates into lower costs per ton-mile – especially over long distances. When integrated with flexible trucking solutions on either end, domestic intermodal combines the best of both worlds. Businesses can slash fuel costs, reduce driver dependency, and still meet tight delivery schedules.
2. Reduced Environmental Footprint
With growing demand from customers and regulators for eco-friendly operations, domestic intermodal offers a clear win. Rail transport is 3-4 times more fuel-efficient than trucks, emitting far fewer greenhouse gases. Shifting freight to rail for the long haul enables companies to hit carbon reduction targets without compromising logistics performance.
3. Reliability Amid Trucking Challenges
Canada’s trucking industry has faced increasing pressure: driver shortages, rising insurance premiums, and stricter Hours of Service (HOS) regulations. Intermodal helps ease these burdens by reducing over-the-road exposure and making long hauls more manageable. With better schedule predictability and fewer delays, your supply chain becomes more reliable.
4. Expanding Intermodal Infrastructure in Canada
The expansion of domestic intermodal terminals in key regions – such as Toronto, Calgary, Winnipeg, and Montreal – is driving accessibility. National rail carriers like CN and CPKC have invested heavily in technology, container fleets, and terminal automation, enabling faster transloading and better asset utilization.
5. Enhanced Cargo Safety
Intermodal containers are sealed and untouched during rail transit, which means lower risk of cargo theft or damage. This added security is especially critical for high-value or sensitive goods like electronics, machinery, and pharmaceuticals.
6. Ideal for E-commerce and Omnichannel Fulfillment
As e-commerce and omnichannel retail continue to grow, so does the need for consistent, predictable freight movement across Canada. Domestic intermodal allows shippers to move large volumes cost-effectively between fulfillment centres and distribution hubs, supporting just-in-time inventory and fast last-mile delivery.
7. Scalability and Flexibility for Growing Businesses
Whether you’re shipping a few containers a month or scaling to dozens per week, domestic intermodal offers built-in scalability. You can increase or decrease shipping volumes without overcommitting to trucking capacity or adding warehousing overhead.
In short, domestic intermodal shipping is more than a logistics solution – it’s a growth enabler. As customer expectations rise and supply chain pressures mount, the smartest Canadian businesses are embracing intermodal not just to survive but to thrive in 2025. In the following sections, we’ll explore in greater depth how to tap into this powerful freight strategy and maximize your business advantage.
The History of Domestic Intermodal Service in Canada
Domestic intermodal freight transport has been around in Canada since the early 19th century. Ten years after England established its first steam railway line, Canada’s first railway line was built in 1836.
Construction in Canada’s rail industry began to take off from there. The Grand Trunk Railway ran from Sarnia, Ontario, through Toronto and Montreal to Portland, Maine was built. And in 1854, the Great Western Railway completed a route between Niagara Falls and Detroit via Hamilton.
Oddly enough, the Intercolonial Railway, the largest network, never expected to profit. So when financial troubles hit during the first World War, the railroads’ system was merged into CN Rail (Canadian National Railways) and the debts inherited by the Canadian government-owned company. (source The Canadian Encyclopedia)
Canada’s rail intermodal volume is primarily used to move or ship dry bulk cargo such as coal and grain in standardized intermodal containers (ISO containers).
The first container train was operated by CN, carrying 200 intermodal containers from Montreal to Toronto in 1968.
Today, Canada’s domestic intermodal freight transport handles everything from cars to electronics to toys.
Intermodal Economic Growth in Canada and North America
In 2025, intermodal economic growth in Canada and North America is emerging as a powerful force behind regional prosperity, cross-border trade efficiency, and sustainable transportation. As industries search for scalable, environmentally responsible logistics solutions, intermodal transportation has moved from the sidelines to the spotlight — particularly within Canada and its economic ties across North America.
The Strategic Role of Intermodal in Canadian Economic Growth
1. Unlocking National Efficiency
Canada’s vast geography and relatively small population density have historically posed challenges for long-haul shipping. However, domestic intermodal shipping provides a scalable, energy-efficient solution. Moving freight by rail over long distances — paired with last-mile delivery by truck — is significantly more cost-effective than truck-only transport.
This efficiency fuels economic growth by reducing the cost of goods movement, enabling businesses of all sizes to operate competitively across the country. From Toronto to Vancouver, and Winnipeg to Halifax, intermodal connects Canadian cities in a way that supports national commerce.
2. Boosting Infrastructure Investment
In response to surging demand, Canada’s major intermodal players — including CN Rail and CPKC (Canadian Pacific Kansas City) — have invested billions into rail expansion, terminal upgrades, and automation. These investments translate directly into job creation, supply chain modernization, and regional economic stimulus.
New intermodal terminals across provinces like Alberta, Ontario, and Quebec are being optimized for higher container throughput, offering better access to rail networks for Canadian manufacturers, exporters, and retailers.
North America’s Intermodal Integration: A Continent-Wide Economic Engine
3. Cross-Border Trade and the USMCA Advantage
The USMCA trade agreement (formerly NAFTA) has facilitated a surge in cross-border intermodal shipping. Goods produced in Canada are moving efficiently via intermodal corridors into the United States and Mexico — and vice versa. This streamlined trade supports sectors like automotive, agriculture, and electronics, where rapid and reliable logistics are crucial.
Major lanes such as Toronto–Chicago, Montréal–New York, and Vancouver–Los Angeles are now heavily reliant on intermodal freight, reinforcing the value of this mode in strengthening North America’s economic cohesion.
4. Reducing Congestion and Emissions
North America’s road infrastructure is burdened by congestion, driver shortages, and carbon emissions. Intermodal helps relieve these pressures by shifting freight to rail, which is three to four times more fuel-efficient than trucks. As a result, companies that rely on intermodal reduce both their carbon footprint and their exposure to volatile diesel prices.
Governments across Canada and the U.S. are offering incentives and grants for businesses to participate in greener shipping initiatives — many of which prioritize intermodal usage.
Industry Spotlight: Who’s Driving Intermodal Growth?
5. Retail and E-commerce Giants
Companies like Canadian Tire, Loblaws, Walmart, and Amazon have invested heavily in intermodal logistics to reduce freight costs and speed up fulfillment. These retailers depend on consistent, predictable shipping to stock stores and deliver products across provincial and international borders.
6. Manufacturing and Automotive
The auto sector, particularly in Ontario and Michigan, has become deeply reliant on intermodal rail corridors to move raw materials, machinery, and finished vehicles between plants and warehouses. Using rail reduces damage risk and enables manufacturers to meet just-in-time production models.
7. Agriculture and Resource-Based Sectors
Canada’s agricultural output — including grains, pulses, and seafood — is increasingly exported using intermodal containers. From Saskatchewan to the Port of Prince Rupert, intermodal provides reliable, traceable movement of perishables and bulk products to international markets.
Key Benefits Fueling Intermodal Economic Growth
Why is intermodal transportation so central to Canada and North America’s economic growth in 2025? The benefits speak for themselves:
| Benefit | Impact |
| Cost Savings | Reduces long-haul trucking costs by 10–40% |
| Lower Emissions | Rail produces 75% fewer GHGs per ton-mile than trucks |
| Infrastructure Optimization | Expands trade corridor capacity without new highways |
| Improved Delivery Consistency | Mitigates risks like driver shortages and weather delays |
| Scalability for Businesses | Supports growth from SMEs to global enterprises |
Challenges to Watch — and How the Sector Is Overcoming Them
No transformation comes without friction. Intermodal growth is challenged by:
- Terminal congestion in peak seasons
- Limited rail access in some remote regions
- Coordination complexity between carriers, especially cross-border
Yet, these are being addressed through AI-powered logistics platforms, increased rail terminal automation, and better data sharing across carriers. Tech-forward logistics providers are now offering visibility platforms that track container location, rail progress, and even predict delays using weather and infrastructure data.
The Future of Intermodal: Innovation, Sustainability, and AI
The next wave of intermodal economic growth in Canada and North America will be driven by technology and sustainability. Look for:
- Hydrogen-powered and electric locomotives
- Smart intermodal containers with IoT sensors for temperature and tamper tracking
- AI-driven load optimization to maximize container utilization and route efficiency
- Public-private partnerships to expand inland intermodal terminals and clean energy corridors
A Golden Era of Intermodal Economic Growth
The message is clear: intermodal transportation is not just reshaping how goods move — it’s reshaping the economic foundation of Canada and North America. As investment, infrastructure, and innovation continue to align, businesses that embrace intermodal now will be better positioned for resilience, profitability, and environmental leadership.
Whether you’re a shipper, importer, exporter, or logistics strategist, now is the time to prioritize intermodal transportation in your operational roadmap. The benefits go beyond logistics — they flow into your bottom line, your brand story, and the broader North American economy.
What is Domestic Intermodal Service?
Domestic intermodal service simply put is the domestic shipping of freight and can help companies expand and move their products quickly and more efficiently.
Companies in Canada with international trade will also find domestic intermodal services beneficial for their needs.
Domestic logistics can be used to move goods from one location in the country to another and between countries like the US and Mexico.
Canadian domestic shipments are typically handled by truck and rail transport. Trucking offers a more flexible solution for shorter distances, but both rail and trucking provide competitive rates and convenience when needed.
What Domestic Intermodal Service is Best for Me?
This depends on your needs. Also, on the volume of shipments you’re looking to ship/receive and to and from where.
If you’re looking for domestic transport by rail, finding a company that specializes in domestic shipping on your specific route is critical.
Domestic logistics operators can also provide customs brokerage and warehousing services, which can help your company save money.
Are you looking to ship from Ontario or Quebec out West? Contact one of our rail experts for a FREE no-obligation quote. We’re confident our rates will be within your budget.
According to Statistics Canada, domestic intermodal transport volumes are expected to grow over the next few years. This is good news for businesses who want to move their goods domestically, as this service will only become more efficient.
Domestic Intermodal Services Today and the Benefits They Offer You as a Shipper or Freight Forwarder
Recent changes to international trade have impacted domestic logistics, but domestic transportation still remains one of the most vibrant industries in Canada’s economy.
Domestic railway freight transportation is playing an ever-increasing role in transporting goods across the country.
Intermodal rail service offers advantages for moving goods over long distances, including reduced handling and inventory costs and improved security and on-time performance.
When you’re looking to ship your domestic freight, it’s important to find the right domestic intermodal service for your needs. It can be challenging to know where to start with so many options available.
That’s where we come in! RailGateway is Canada’s number one choice in full load intermodal rail transport with over 40+ years of experience shipping domestic freight by rail across Canada.
We provide intermodal services for companies of all sizes in Ontario, Quebec, Manitoba, Saskatchewan, Alberta and BC.
We have the knowledge and expertise to offer you domestic shipping by rail with excellent on-time service that goes above and beyond.
Intermodal logistics is a great way for businesses to decrease costs without reducing their level of service. Contact us today to find out how we can help your business.
Conclusion
As 2025 unfolds, the message is clear: Canada’s domestic intermodal shipping industry is entering a new era of opportunity. It’s a solution born from complexity — answering the call for smarter, leaner, and greener logistics in a vast country where one-size-fits-all shipping just doesn’t work.
Businesses that have already embraced intermodal have gained not only a cost advantage but a competitive edge. They’ve future-proofed their operations by investing in a system that can withstand driver shortages, fuel volatility, and shifting customer demands. And they’ve made a commitment to reducing their environmental impact in a measurable, scalable way.
Let’s recap how intermodal shipping delivers on key business needs:
Business Impact Breakdown
| Need | How Domestic Intermodal Delivers |
| Lower Costs | Reduces fuel, driver hours, and freight damage |
| Eco-Conscious Operations | Cuts CO₂ emissions by up to 60% over trucking |
| Shipping Reliability | Leverages Canada’s rail network with set schedules |
| Scalability | Easily adjust volume as business grows or shifts |
| Risk Management | Reduces theft and damage with fewer handoffs |
| National Reach | Connects urban hubs and rural areas efficiently |
Strategic Takeaways for 2025 and Beyond
- Start Small, Scale Smart
You don’t need to overhaul your logistics overnight. Many providers offer partial-load or LCL (less-than-container-load) intermodal options. Start small and track performance metrics to guide expansion. - Choose the Right Partners
Work with intermodal providers who understand Canadian geography, customs regulations (if near border areas), and who offer robust technology for tracking and visibility. - Integrate Tech for Visibility
Use digital freight platforms and transportation management systems (TMS) to monitor container location, delivery windows, and exceptions in real time. - Plan Around Lead Times
Intermodal may take a bit longer than truck-only for certain lanes — but with planning, you can save costs without sacrificing service levels. - Promote Green Credentials
Your shift to domestic intermodal isn’t just smart — it’s marketable. Showcase your lower-carbon shipping strategy to stakeholders, customers, and investors.
In closing, Canada’s domestic intermodal system is no longer just a side option for big carriers — it’s an accessible, proven strategy that gives businesses of all sizes a powerful way to win in 2025.
If you’re looking to optimize freight costs, reduce carbon footprint, and streamline operations across Canada, intermodal should be at the heart of your shipping strategy. The path forward is clear — and it runs on steel rails.
FAQ
- What is domestic intermodal shipping?
Domestic intermodal shipping involves transporting freight within Canada using a combination of transportation modes, primarily rail and truck, without handling the cargo during mode transitions. - How does intermodal shipping benefit Canadian businesses?
It offers cost savings, improved transit times, enhanced reliability, and reduced environmental impact by optimizing the strengths of different transportation modes. - Is intermodal shipping suitable for all types of cargo?
While ideal for non-perishable and bulk goods, advancements in temperature-controlled containers have expanded its suitability to a broader range of products. - How does intermodal shipping contribute to sustainability?
By shifting long-haul freight from trucks to trains, intermodal shipping significantly reduces greenhouse gas emissions and fuel consumption. - What infrastructure supports intermodal shipping in Canada?
Canada boasts an extensive rail network, intermodal terminals, and ports that facilitate seamless transitions between transportation modes. - Are there technological tools to track intermodal shipments?
Yes, modern logistics platforms offer real-time tracking, providing visibility and transparency throughout the shipment’s journey. - How does intermodal shipping handle cross-border trade?
Intermodal solutions streamline cross-border logistics by coordinating customs clearance and leveraging integrated transportation networks. - What are the cost implications of intermodal shipping?
While initial setup may require investment, long-term savings are realized through reduced fuel costs, lower labor expenses, and minimized cargo handling. - Can small businesses benefit from intermodal shipping?
Absolutely. Intermodal providers offer scalable solutions tailored to the needs of businesses of all sizes. - What challenges might businesses face with intermodal shipping?
Potential challenges include coordination complexities, infrastructure limitations in certain regions, and the need for precise scheduling. - How is the Canadian government supporting intermodal transportation?
Through investments in infrastructure, policy initiatives promoting sustainable transportation, and partnerships with industry stakeholders to enhance logistics efficiency. - Where can businesses find reliable intermodal service providers?
Reputable providers include CN Rail, CP Rail, and various third-party logistics companies specializing in intermodal solutions.
How We Can Help with Domestic Intermodal Shipping
For businesses looking to optimize their freight shipping with reliable, efficient, and cost-effective solutions, RailGateway.ca is your trusted partner in intermodal logistics. Whether you’re new to freight trains or want to enhance your existing supply chain, our team of intermodal experts is ready to guide you every step of the way.
Contact RailGateway.ca today for a free quote or to speak directly with one of our experienced intermodal specialists. Let us help you unlock smarter, smoother shipping solutions tailored to your unique needs.
Visit RailGateway.ca or call us to get started on transforming your freight shipping strategy in 2025 and beyond.
