The shipments component of the Cass Freight Index continued to tumble in January, down 5.3% m/m.
According to a media release, about half of the decline was normal seasonality. More bad weather than normal and unusual weather in the Southeast also contributed.
- On a y/y basis, shipments declined 8.2% in January.
- Seasonally adjusted, the index fell 2.7% m/m, extending a 3.1% decline in December. It is the lowest level since July 2020.
Private fleet capacity additions continue to pull freight from the for-hire market. LTL consolidation is also putting pressure on this index.
The normal seasonal pattern would have the index down about 10% y/y in February, but it should be smaller if milder weather continues. Some national fleets that experienced similar declines, like XPO, attributed about 3pps to weather.
After rising 13% in 2021 and 0.6% in 2022, the index declined 5.5% in 2023 and 4.1% in 2024. The index is trending toward another decline in 2025.
Cass Freight Index – Expenditures
The expenditures component of the Cass Freight Index, which measures the total amount spent on freight, fell 4.8% m/m in January. The y/y decline widened to 4.2% from 3.4% in December.
“The decline in spending was again from shipments, which fell 5.3% m/m,” the release said. “Comparing the changes in shipments and overall spending, we infer rates rose 0.5% m/m in January in the fourth straight price increase.”
- In SA terms, the index fell 2.6% m/m, with shipments down 2.7% and rates up less than a tenth of a percent.
This index includes changes in fuel, modal mix, intramodal mix and accessorial charges, so it is a bit more volatile than the cleaner Cass Truckload Linehaul Index, according to the release.
The expenditures component of the Cass Freight Index, after a record 38% surge in 2021 and another 23% increase in 2022, fell 19% in 2023 and 11% in 2024.
Inferred Freight Rates
The rates embedded in the two components of the Cass Freight Index rose 0.5% m/m in January, following a 5.1% increase in December, and representing the fifth straight increase. In SA terms, inferred rates were unchanged m/m.
- On a y/y basis, Cass Inferred Freight Rates™ accelerated to a 4.3% y/y increase in January, after turning positive for the first time in two years in December.
- After a 7% decline in 2024, freight rates are starting 2025 on track for low- to mid-single-digit increases in 2025.
Based on the normal seasonal pattern, this index may accelerate further in February and is headed for a modest increase in 2025.
Truckload Linehaul Index
The Cass Truckload Linehaul Index rose 0.6% m/m in January, the fifth straight small increase from a cycle low in August.
- The y/y change inflected to a 0.8% increase in January from a 0.4% decline in December.
“There you have it, folks, another important positive freight cycle inflection,” the release saia. “For those looking for something similar to the past two cycles, expect a long wait, but this cycle is moving in a positive direction.”
This index fell 10% in 2023, and another 3% in 2024. Where it will go in 2025 is a big question, but it is off to a positive start.
Freight Expectations
“While feeling like a bit of a broken record, we still think private fleet capacity additions are likely the main reason for-hire freight volumes continue to decline,” the release said. “As cost economics reassert their influence, the long-term trend toward outsourcing will eventually return, but the extended 2023 and 2024 downcycle was characterized by an extraordinary post-pandemic insourcing. This is now slowing, which suggests improving for-hire demand trends, but 2025 and 2026 capacity decisions will be characterized by looming industry regulations.”
In recent Q4 results, the large truckload fleets reported capacity reductions of about 5% y/y, with little sequential change. New Class 8 tractor sales tell us that overall, capacity is still being added. News like the recent divestiture of Walmart’s Canada fleet to a for-hire provider suggest the insourcing trend may be running its course, but much will depend on the changing regulatory environment.
“Perhaps the most important takeaway this month is that while volumes remain soft, capacity has adjusted enough to result in modestly higher rates,” the release said. “In addition to tariffs, this could be a key theme of 2025.”
Dana Guthrie is an award-winning journalist who has been featured in multiple newspapers, books and magazines across the globe. She is currently based in the Atlanta, Georgia, area.
