North American freight volumes in the for-hire market recouped some of January’s losses in February, increasing 10.5% m/m., according to the Cass Freight Index (CFI).
Almost half was due to normal seasonality. Compared to last year, shipments were down 5.5%, less than January’s 8.2% decline. Freight expenditures in the for-hire market rose 3.6% from January.
Shipments
The shipments component of the Cass Freight Index recouped some losses in February, up 10.5% m/m, almost half of which was normal seasonality.
- The decline in shipments narrowed to 5.5% y/y in February from 8.2% in January.
- In SA terms, the index rose 4.9% m/m, after a 2.7% drop in January.
“Some of the sequential variation was likely caused by severe January weather, and some of the improvement in February was likely from pre-tariff shipping,” CFI said. “This could begin to reverse as soon as March, but normal seasonality would see a narrower 3%-4% y/y drop in March shipments.”
Private fleet capacity additions of recent years continue to result in soft for-hire market conditions, exemplified by more news of Amazon building an LTL network in recent months.
After rising 13% in 2021 and 0.6% in 2022, the index declined 5.5% in 2023 and 4.1% in 2024, and so far, is trending toward another decline in 2025.
Expenditures
The expenditures component of the Cass Freight Index , which measures the total amount spent on freight, rose 3.6% m/m in February. The y/y decline widened to 4.6%, from 4.2% in January.
The y/y decline was more than explained by lower volumes, as shipments fell 5.5%. From these respective changes, we infer rates rose 1.0% y/y in February.
- In SA terms, the index fell 0.3% m/m, with shipments up 4.9% and rates down a touch more, largely due to mix changes, as underlying linehaul rates rose.
This index includes changes in fuel, modal mix, intramodal mix, and accessorial charges, so is a bit more volatile than the cleaner Cass Truckload Linehaul Index.
The expenditures component of the CFI, 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 CFI fell 6.2% m/m in February, and 4.9% SA.
- After rising 11% in the prior five months (6.3% SA), much of which seemed mix-driven, February inferred rates seem to be a reversion, with lower-cost modes featuring more prominently in the mix this month.
- The y/y increase in Cass Inferred Freight Rates slowed to 1.0% in February from 4.3% in January, further aligned with the more modest increases in contract rates which seem prevalent these days.
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 flatten out in March and is trending toward a flattish result for 2025,” CFI said.
Truckload Linehaul Index
The Cass Truckload Linehaul Index rose 1.2% m/m in February. It is the sixth straight small increase from a cycle low in August. The index was 4.8% above that August low in February.
The y/y change accelerated to a 1.9% increase in February after a 0.8% increase in January.
“This index fell 10% in 2023 and another 3% in 2024,” CFI said. “Where it will go in 2025 is a big question, but it is off to a positive start.”
Uncertainty Due to Tariffs
“While the outlook is fraught with uncertainty, and freight demand will be challenged by tariffs, we highlight a silver lining for the for-hire freight market amid rising recession risk,” CFI said. “Elevated uncertainty may be turning the tide of private fleet capacity additions after a long for-hire downturn. Even the EPA low-NOx standards initially promulgated by the first Trump administration and planned to go into effect in 2027 are now under review. With significant private fleet pre-buying in preparation for these rules in recent years, the new elevated level of uncertainty is likely to reduce equipment supply. When we throw on another roughly $20k per Class 8 tractor in tariffs, if/when the USMCA exemption ends (currently paused until April 2nd), the resulting supply shock is likely to press freight rates higher.”
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.
