July 2025 Cass Freight Index

The July 2025 Cass Freight Index report, released by Cass Information Systems, paints a complex picture of the North American freight market, with declining shipment volumes but rising expenditures signaling a potential turning point. At Gain Consulting, we’re analyzing the key insights from this report to help shippers and logistics providers adapt to these dynamic conditions and prepare for what lies ahead.

Key Findings from the July 2025 Cass Freight Index

The Cass Freight Index provides a monthly snapshot of North American freight volumes and expenditures, based on $36 billion in freight payables processed annually. Here’s what the July 2025 data reveals:

• Shipments Decline: The shipments component fell 1.8% month-over-month (m/m) and 1.7% m/m in seasonally adjusted (SA) terms, with a year-over-year (y/y) decline of 6.9%, the largest since January 2025. This marks three consecutive months of sequential declines, driven by tariff-related disruptions and the reversal of earlier demand pull-forwards. The index is projected to drop 8% y/y in August, though recent import surges may temper this decline.

• Expenditures Edge Up: The expenditures index, which tracks total freight spend including fuel, dropped 1.5% m/m (0.6% SA) but rose 0.4% y/y, marking the fourth consecutive month of annual gains after over two years of declines. This increase is entirely due to higher rates, as shipment volumes fell.

• Inferred Freight Rates Rise: Rates, calculated by dividing expenditures by shipments, increased 7.9% y/y and 1.1% m/m SA, largely due to a modal shift toward truckload (TL) from less-than-truckload (LTL). This shift, potentially a pre-tariff head-fake, suggests a temporary boost rather than a sustained freight cycle improvement.

• Truckload Linehaul Index: The TL Linehaul Index, excluding fuel and surcharges, dipped 0.6% m/m but rose 2.4% y/y, the strongest annual gain since September 2022. The index is on track for a modest increase in 2025, following declines of 10% in 2023 and 3.4% in 2024.

  
  

Market Context and Challenges

The freight market is grappling with significant headwinds, primarily driven by tariffs imposed on August 8, 2025, ranging from 15% (EU, Japan, South Korea) to 50% (Brazil). These tariffs have disrupted demand, with paybacks from earlier inventory buildups contributing to the shipment decline. Despite stable goods prices, the report notes an “air pocket” in freight volumes, with more expected in Q3 2025. However, a silver lining emerges: reduced commercial vehicle production and manufacturing job losses (37,000 over three months) may tighten capacity, potentially driving freight back to the for-hire market in 2026.

Economic indicators add complexity:

• GDP Growth: Q2 2025 saw a 3% increase, driven by a positive trade balance, though inventory drawdowns subtracted 3.2%.

• Job Market: July added only 73,000 jobs, with manufacturing losing 11,000, signaling challenges for freight demand.

• Consumer Sentiment: The University of Michigan’s Consumer Sentiment Index rose to 61.7, but cautious spending persists, with consumers seeking value amid tariff-driven price concerns.

What This Means for Shippers

The July 2025 Cass Freight Index highlights a market in transition, with declining volumes but rising rates and a potential capacity crunch on the horizon. Here’s how businesses can respond:

• Optimize Freight Strategies: With inferred rates up 7.9% y/y, review your modal mix to balance cost and efficiency. Shifting to truckload for certain shipments may offer temporary savings, but monitor LTL pricing as carriers like ArcBest implement rate hikes (e.g., 5.9% in August 2025).

• Prepare for Capacity Constraints: Anticipate tighter capacity in 2026 due to reduced vehicle production. Secure carrier contracts now to lock in rates and capacity before the market tightens.

• Leverage Data Insights: Use tools like the Bureau of Transportation Statistics’ new freight mobility data to optimize routing and reduce costs, especially in high-traffic lanes affected by tariff disruptions.

• Mitigate Tariff Impacts: Diversify supply chains and explore intermodal options, such as Union Pacific’s new Inland Empire-to-Chicago service launching September 3, 2025, to hedge against tariff-driven cost increases.

How Gain Consulting Can Help

At Gain Consulting, we specialize in turning market challenges into opportunities. Our team can help you analyze freight data, negotiate carrier contracts, and implement cost-saving strategies tailored to your business. Whether you’re navigating rising rates, preparing for a capacity shift, or integrating new data tools, we’re here to ensure your supply chain remains agile and competitive.

Looking Ahead

The July 2025 Cass Freight Index underscores a freight market at a crossroads, with declining volumes signaling caution but rising rates and capacity constraints hinting at a potential recovery in 2026. By acting proactively, businesses can position themselves to thrive in this evolving landscape.

Contact Gain Consulting today to learn how we can help you optimize your logistics strategy and capitalize on emerging opportunities.

Source: Cass Information Systems, July 2025 Cass Freight Index Report, www.cassinfo.com; additional insights from DC Velocity, CCJ, and U.S. Department of Transportation, August 2025