January Freight Market Overview: A Positive Inflection Amid Soft Shipments
Recent data released by Cass Information Systems for January has revealed a noteworthy shift in the truckload (TL) freight market, as truckload linehaul rates have experienced a year-over-year increase for the first time in two years. This positive change, however, comes amidst a backdrop of soft shipment volumes.
The Cass TL linehaul index, which measures rates excluding fuel and accessorial surcharges, recorded a modest 0.8% increase compared to January of the previous year. This marks the first positive year-over-year change since December 2022. In addition, the index saw a sequential increase of 0.6% from December, representing the fifth consecutive month of growth.
Unusually severe winter storms in January played a significant role in influencing TL spot rates, driving them higher for a limited period. While the report underscored the positive shift in rates, it also cautioned that a substantial recovery in the freight market may require more time.
“There you have it, folks, another important positive freight cycle inflection,” stated the Thursday report. “For those looking for something similar to the past two cycles, expect a long wait, but this cycle is moving in a positive direction.”
Understanding the Linehaul Rate Index
The linehaul rate index incorporates variations in both spot and contract freight rates. Despite the recent uptick, the index remains down 5.2% compared to January 2023, reflecting broader market challenges. The index had previously declined 3% in 2024, following a more substantial 10% drop in 2023.
| January 2025 | y/y | 2-year | m/m | m/m (SA) |
| Shipments | -8.2% | -15.1% | -5.3% | -2.7% |
| Expenditures | -4.2% | -27.5% | -4.8% | -2.6% |
| TL Linehaul Index | 0.8% | -5.2% | 0.6% | NM |
According to the Cass Freight Index, shipments fell by 5.3% from December, and when seasonally adjusted, this number represents a decline of 2.7%. Year-over-year, the volumes index decreased by 8.2%, and on a two-year stacked comparison, the decline reached a staggering 15.1%, marking the most significant drop since the onset of the COVID-19 pandemic in 2020.
The shipments index predominantly reflects trucking activity, with over half of the recorded spend being attributed to truckload carriers. January is traditionally a slow month for freight demand, compounded this year by winter storms in regions such as the South and Southeast, which are typically less prepared for such weather events, leading to significant disruptions in carrier networks.
The report also pointed out that private fleets are transporting more freight than they have historically, creating additional challenges for for-hire truck volumes. Looking ahead, the forecast suggests that the shipments index may decline approximately 10% year-over-year in February, although this could be mitigated if weather conditions are favorable.
Market Insights from Q4 Earnings Reports
The fourth-quarter earnings season provided a mixed bag of insights from truckload management teams. Industry consensus indicates that demand remains relatively weak; however, discussions surrounding pricing suggest that contract rates may see an uptick this year. Carriers such as Schneider National and Werner Enterprises expressed optimism, stating that “the tide is turning,” while spot broker Landstar System noted that the market appears to be “stuck between cycles.”
Furthermore, Cass’ freight expenditures index, which encompasses total freight spending including fuel, demonstrated a year-over-year decline of 4.2% and a 2.6% decrease from December when seasonally adjusted. On a two-year stacked comparison, the decline was a staggering 27.5%. The year-over-year decline was slightly worse than in December, primarily influenced by the downturn in shipment volumes.
Interestingly, when factoring in the changes in shipments against expenditures, actual freight rates likely increased by 4.3% year-over-year, marking a fifth consecutive month of sequential growth.
Initial projections for inferred rates in 2025 anticipate a modest rise in the low- to mid-single-digit percentage range.
“Perhaps the most important takeaway this month is that while volumes remain soft, capacity has adjusted sufficiently to yield modestly higher rates,” the report emphasized. “Extraordinary post-pandemic insourcing” within private fleets continues to dampen for-hire demand; however, as cost economics regain their influence, the long-term trend toward outsourcing is expected to return.
The data utilized in the indexes is derived from freight bills processed by Cass, a prominent provider of payment management solutions that handles $36 billion in freight payables annually on behalf of its clients.