The shipments component of the Cass Freight Index, as reported by Cass Information Systems Inc., 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. 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.

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 Cass Freight Index, after a record 38% surge in 2021 and another 23% increase in 2022, fell 19% in 2023 and 11% in 2024.

The rates embedded in the two components of the Cass Freight Index 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.

Cass Inferred Freight Rates are a simple calculation of the Cass Freight Index data—expenditures divided by shipments—producing a data set that explains the overall movement in cost per shipment. The data set is diversified among all modes, with truckload (TL) representing more than half of the dollars, followed by less-than-truckload (LTL), rail, parcel, and so on.

The Cass Truckload Linehaul Index rose 1.2% m/m in February, 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. Where it will go in 2025 is a big question, but it is off to a positive start.

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. 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.