March 2025 Freight Market Update: Navigating Tariffs and Trade Shifts

Credit: Cass Information Systems Inc. Cass Transportation Index Report March 2025

At Gain Consulting, we’re committed to keeping you ahead of the curve in the ever-evolving supply chain landscape. The March 2025 Cass Freight Index report offers critical insights into North American freight activity, revealing a market shaped by tariff uncertainties and shifting demand patterns. Let’s break down the key takeaways and what they mean for your business.

Cass Freight Index: Shipments Hold Steady, but Challenges Loom

The Cass Freight Index - Shipments remained flat month-over-month (m/m) in March at 1.054, showing no change from February. However, the year-over-year (y/y) decline narrowed slightly to -5.3% from -5.5%, signaling a slow stabilization in for-hire freight volumes. On a seasonally adjusted (SA) basis, shipments dipped 2.1% m/m, reflecting a pullback after February’s weather-driven and pre-tariff surge.

Looking ahead, a 90-day pause on most reciprocal tariffs is likely to spur pre-tariff shipping in Q2, as businesses stock up to avoid potential cost hikes. However, extreme tariffs on China and other trade war dynamics could dampen consumer affordability, extending the for-hire freight recession. After declines of 5.5% in 2023 and 4.1% in 2024, the index is trending toward another y/y drop in 2025, with a projected -4% in April based on seasonal patterns.

What This Means for You: Flat shipment volumes suggest a cautious market. Businesses should optimize inventory strategies now to capitalize on pre-tariff demand while preparing for potential slowdowns as higher prices hit consumers later in the year.

Expenditures Rise, Driven by Rates

The Cass Freight Index - Expenditures, which tracks total freight spend, climbed 2.8% m/m to 3.163, with the y/y decline narrowing to -2.0% from -4.6% in February. This uptick was driven by a 3.5% y/y rise in inferred freight rates, despite a 5.3% drop in shipment volumes. In SA terms, expenditures rose 1.5% m/m, with rates up 3.7%, partly due to modal and mix changes.

Freight spending has seen dramatic swings: a 38% surge in 2021, a 23% increase in 2022, followed by a 19% drop in 2023 and an 11% decline in 2024. The March data suggests a modest recovery in rates, though volatility persists due to fuel costs, modal shifts, and accessorial charges.

What This Means for You: Rising rates signal tightening capacity or shifting demand. Review your carrier contracts and explore multi-modal options to mitigate cost increases, especially as pre-tariff activity heats up.

Inferred Freight Rates Gain Momentum

Cass Inferred Freight Rates, calculated by dividing expenditures by shipments, rose 2.8% m/m and 3.7% SA, with a y/y increase of 3.5%—up from 1.0% in February. This reflects small but consistent contract rate hikes across modes, particularly truckload (TL), which accounts for over half of freight dollars, followed by less-than-truckload (LTL), rail, and parcel. After a 7% rate decline in 2024, 2025 is on track for low- to mid-single-digit gains, with a projected 3% rise in April.

What This Means for You: Steady rate increases indicate a stabilizing pricing environment. Lock in favorable rates where possible, and diversify your carrier base to maintain flexibility amid tariff-driven disruptions.

Truckload Linehaul Index: A Pause After Gains

The Cass Truckload Linehaul Index, a cleaner measure of per-mile truckload rates, slipped 0.1% m/m to 143.0 in March, halting six months of small gains. Still, the index is 4.7% above its August 2024 low, and the y/y increase slowed to 1.5% from 1.9% in February. After falling 10% in 2023 and 3% in 2024, the index is showing early signs of recovery, though 2025’s trajectory remains uncertain.

What This Means for You: The slight dip suggests a breather in truckload pricing, but the positive y/y trend points to tightening capacity. Partner with reliable TL carriers to secure capacity before tariff-related demand spikes.

Freight in the Crosshairs: Tariffs and Trade War Impacts

A key question this month: what share of freight is tied to international trade? Expert insights, including from Dr. Jason Miller of Michigan State, peg it at 20%-25%—a significant portion. With tariffs targeting Canada, Mexico, and China (some delayed, others active), supply chains face a dual reality: short-term demand for pre-tariff goods and longer-term risks from reduced consumer spending as prices rise.

The trade war’s shadow looms large. After 39 months of y/y shipment declines, a recovery feels distant, especially for for-hire freight. Pre-tariff stockpiling may boost volumes temporarily, but higher costs could erode real incomes, curbing goods demand by late 2025.

What This Means for You: International trade disruptions are real. Assess your exposure to tariffed goods, diversify sourcing where feasible, and lean on data-driven forecasting to navigate the adjustment period.

ACT Research Forecast Accuracy: A Trusted Guide

The ACT Research Freight Forecast, which informs much of this analysis, has a stellar track record. Their 2024 forecasts for the Cass Truckload Linehaul Index were 98.8% accurate from 18 months out, hitting 139.3 as predicted in December 2023. Shipments forecasts were 95.0% accurate over the same period. These insights, covering capacity, volumes, and rates through 2027, are a cornerstone for strategic planning.

What This Means for You: Trust in accurate forecasts to guide your decisions. Gain Consulting can help you leverage these insights to optimize operations and stay resilient.

How Gain Consulting Can Help

The freight market is at a crossroads, with tariffs, rates, and consumer trends reshaping supply chains. At Gain Consulting, we specialize in turning data into actionable strategies. Whether it’s optimizing carrier networks, managing inventory for tariff shifts, or forecasting costs, our team is here to help you thrive.

• Custom Analytics: Use Cass Freight Index data to tailor your supply chain approach.

• Carrier Strategy: Secure capacity and negotiate rates in a volatile market.

• Tariff Planning: Mitigate risks with diversified sourcing and inventory tactics.

Contact us today to schedule a consultation and stay ahead in 2025’s complex freight landscape.

Source: Cass Information Systems, March 2025 Cass Freight Index Report, ACT Research Freight Forecast.