PPI Insights: LTL Freight Rates Signal Market Shifts in July 2025
- Kelsea Ansfield
- Aug 18, 2025
- 4 min read
The Producer Price Index (PPI) for General Freight Trucking, Long-Distance Less Than Truckload (LTL) (PCU484122484122) reached 447.498 in July 2025, marking a significant increase of 7.1% from July 2024, according to data from the U.S. Bureau of Labor Statistics. This surge in LTL freight rates reflects rising costs and evolving market dynamics, presenting both challenges and opportunities for shippers.
At Gain Consulting, we’re diving into the implications of this PPI data to help businesses navigate the shifting LTL landscape.
Understanding the PPI for LTL Freight
The PPI for General Freight Trucking, Long-Distance Less Than Truckload, measured on an Index Jun 1992=100 basis, tracks the prices received by LTL carriers for their services. The July 2025 value of 447.498 represents a robust year-over-year increase from 417.21 in July 2024, continuing a trend of rising rates. This follows a peak of 437.036 in February 2025 and a historical high of 260.495 for the broader LTL index (Dec 2003=100) in June 2025. The data underscores a tightening market, driven by factors such as tariff-related disruptions, capacity constraints, and rising operational costs.
Key Data Points
July 2025 PPI: 447.498 (Index Jun 1992=100, not seasonally adjusted)
Year-over-Year Increase: +7.1% (from 417.21 in July 2024)
Month-over-Month Increase: +1.9% (from 439.19 in June 2025)
Historical Context: The index hit a record high of 437.036 in February 2025, with a long-term low of 99.7 in July 1992.
Market Context and Drivers
The rise in LTL freight rates aligns with broader industry trends observed in recent reports. The July 2025 Cass Freight Index noted a 7.9% year-over-year increase in inferred freight rates, driven by a modal shift toward truckload and rising fuel costs, despite a 6.9% year-over-year decline in shipment volumes. Similarly, the June 2025 Freight Transportation Services Index (TSI) reported a 0.4% month-over-month decline in freight volumes, with trucking and rail seeing notable decreases. These trends suggest a market where demand is softening, but costs are climbing due to capacity constraints and external pressures like tariffs.
The Bureau of Transportation Statistics also highlights broader cost pressures, with the PPI for freight transportation and equipment rising 1.9% from July 2024 to July 2025. Specific to LTL, carriers like ArcBest implemented a 5.9% general rate increase in August 2025, further contributing to the upward trend in pricing. Tariff uncertainties, with rates ranging from 15% (EU, Japan, South Korea) to 50% (Brazil), have prompted inventory buildups and modal shifts, impacting LTL demand and pricing.
Implications for Shippers and 3PLs
The 7.1% year-over-year PPI increase for LTL freight signals rising shipping costs, particularly for businesses relying on long-distance LTL services. Key implications include:
Higher Freight Costs: The PPI’s upward trajectory, combined with ArcBest’s rate hike and the National Motor Freight Classification (NMFC) updates gaining traction (despite FedEx Freight’s delay until December 1, 2025), suggests shippers will face sustained cost pressures.
Capacity Challenges: Reduced commercial vehicle production and manufacturing job losses (37,000 over three months) may tighten capacity, driving rates higher as demand stabilizes. Carriers and brokers, as noted by DC Velocity on August 8, 2025, anticipate a market recovery within six months, which could exacerbate capacity constraints.
Modal Shift Opportunities: The launch of Union Pacific’s Inland Empire-to-Chicago intermodal service on September 3, 2025, offers a cost-effective alternative to LTL for certain lanes, potentially offsetting rising rates.
Strategic Recommendations
To navigate the rising LTL rates and prepare for a potential market recovery, Gain Consulting recommends the following strategies:
Audit Freight Classifications: With the NMFC updates reshaping LTL pricing, review your commodity classifications to ensure accuracy and minimize cost impacts. Our team can help align your shipments with the new standards.
Optimize Modal Mix: Explore intermodal options, such as Union Pacific’s new service, to reduce reliance on LTL for long-haul shipments. This can lower costs and improve sustainability.
Leverage Data Insights: Utilize the BTS’s new freight mobility data, based on GPS from over 350,000 trucks, to optimize routing and reduce transit times, mitigating the impact of rising rates.
Secure Carrier Contracts: Lock in capacity and rates with carriers now to hedge against future increases, especially as the market anticipates tighter capacity in 2026.
Enhance Packaging Efficiency: Adjust packaging to improve density and lower freight class assignments, reducing LTL costs in light of the PPI’s upward trend.
How Gain Consulting Can Help
At Gain Consulting, we specialize in helping businesses adapt to rising freight costs and complex market dynamics. Our experts can conduct freight audits, optimize your modal strategy, and negotiate carrier contracts to ensure cost efficiency. Whether you’re managing LTL shipments, exploring intermodal solutions, or leveraging new data tools, we’re here to deliver tailored strategies that drive savings and competitiveness.
Looking Ahead
The July 2025 PPI for General Freight Trucking, Long-Distance LTL, at 447.498, underscores a market where rising rates and softening demand are reshaping logistics strategies. With a potential freight market recovery on the horizon, as anticipated by carriers and brokers, now is the time to act strategically.
Contact Gain Consulting today to learn how we can help you navigate rising LTL costs, optimize your supply chain, and position your business for success in 2025 and beyond.
Source: U.S. Bureau of Labor Statistics, Producer Price Index by Industry: General Freight Trucking, Long-Distance Less Than Truckload (PCU484122484122), retrieved from FRED, Federal Reserve Bank of St. Louis, August 14, 2025; additional insights from Logistics Management, DC Velocity, CCJ, and Cass Information Systems, August 2025
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