October 2025 Freight TSI Falls 1.2% — Second Straight Decline Signals Softening Demand

The U.S. Bureau of Transportation Statistics released its October 2025 Freight Transportation Services Index (TSI) yesterday, and the headline is unambiguous:

Freight TSI: 136.7

↓ 1.2% from September

↓ 1.2% year-over-year

This marks the second consecutive monthly decline and the first year-over-year drop since mid-2023. For supply chain leaders, the TSI remains one of the most reliable leading indicators of economic momentum — and right now it is flashing yellow.

Key Takeaways from October

Metric	October 2025	MoM Change	YoY Change
Freight TSI	136.7	-1.2%	-1.2%
Passenger TSI	(not stated)	+0.6%	+1.6%
Combined Freight + Passenger TSI	—	-0.5%	-0.2%

Modal breakdown (freight): Declines in trucking, rail carloads, rail intermodal, and pipeline outweighed gains in air freight and waterborne.

Context with broader indicators

• ISM Manufacturing slipped back into contraction at 48.7

• Industrial Production data still missing due to the federal funding lapse

• The Freight TSI has now underperformed the all-mode average for nine straight months

Historically, sustained weakness in the Freight TSI has preceded GDP slowdowns by 3–6 months. With inventories finally working lower after the 2025 tariff-driven build and consumer sentiment softening, the risk of a sharper Q1 2026 pullback is rising.

Important BTS Announcement for 2026

Starting January 2026, BTS will launch a new early-release Truck & Rail Freight Index published on the first business day of each month — roughly two weeks ahead of the full TSI. This will give planners the fastest possible read on core domestic freight flows.

Strategic Implications for 2026 Planning

1. Transportation budgets should assume flat-to-down volumes through at least Q2. The current softening is broad-based across truck, rail, and pipeline — not weather or one-off events.

2. Lock in contract rates now. Carriers are still pricing off 2024–2025 peak assumptions. A weakening TSI strengthens shipper leverage in annual bids that are happening right now.

3. Revisit inventory positioning. With freight demand cooling and warehouse utilization already contracting (see November LMI), the cost-benefit of holding buffer stock is tilting sharply downward.

The Freight TSI doesn’t scream recession yet — but it is clearly whispering “caution.”

At Gain Consulting, we incorporate the TSI (and the new early truck/rail index) into every 2026 freight budget and network design we build. Clients who act on these leading signals now will enter the next cycle with lower committed costs and greater flexibility.

The data is telling us the party is winding down. The smartest shippers are already heading for the exit while rates are still negotiable.

Need a TSI-informed 2026 freight strategy before year-end bids lock in? Contact us today for a complimentary review.

Source: U.S. DOT Bureau of Transportation Statistics, Release BTS 78-25, December 10, 2025