Strategizing for the 2025 Freight Market: Key Insights from May TSI Data

Credit: Freight Transportation Services Index (TSI)

At Gain Consulting, we empower U.S. shippers to thrive in a dynamic logistics landscape with strategic, data-driven solutions. The U.S. Department of Transportation’s Bureau of Transportation Statistics (BTS) reported on July 10, 2025, that the Freight Transportation Services Index (TSI) fell 0.1% from April to May 2025, marking a 0.9% decline from May 2024. This fact-based blog post analyzes the implications of the Freight TSI’s performance, contextualizes it within broader economic trends, and provides actionable strategies for U.S. shippers to navigate the challenging freight market in 2025.

Freight TSI in May 2025: Key Facts

The Freight TSI, which measures the output of for-hire freight shipments across trucking, rail, inland waterways, pipelines, and air freight, provides critical insights into the transportation industry’s performance. According to the BTS (July 10, 2025), key data points include:

• Monthly Decline: The Freight TSI dropped 0.1% from April (137.2) to May (137.0), following a month of no change (BTS).

• Year-over-Year Decrease: From May 2024 (138.3) to May 2025 (137.0), the index fell 0.9% (BTS, Tables 4, 5).

• Historical Context: The May 2025 level (137.0) is 2.6% below the all-time high of 140.6 in August 2019 and 1.6% below the 2024 peak in August (139.2) (BTS, Table 2A).

• Year-to-Date Trend: Freight shipments are down 0.1% from December 2024 to May 2025 (BTS, Table 3).

• Long-Term Trends: The index is up 9.3% since May 2020 and 12.6% since May 2015, reflecting long-term growth despite recent declines (BTS, Table 5).

• Modal Analysis: The May decrease was driven by declines in rail intermodal and pipeline, while air freight and water increased, and trucking and rail carload remained stable (BTS).

• Revisions: The April 2025 index was revised upward from 136.3 to 137.2 due to concurrent seasonal analysis (BTS, Table A).

The Freight TSI’s decline aligns with broader economic indicators, including a 0.2% drop in the Federal Reserve Board Industrial Production Index, a 9.8% decrease in housing starts, a 0.4% reduction in personal income, and a contraction in manufacturing (ISM index at 48.5) (BTS).

Key Takeaway: The Freight TSI fell 0.1% in May 2025 and 0.9% year-over-year, reflecting declines in rail intermodal and pipeline amid a broader economic slowdown.

Contextual Factors Shaping the Freight Landscape

The Freight TSI’s performance reflects a challenging environment for U.S. shippers, driven by several economic and industry trends:

1. Economic Slowdown: The 0.2% decline in the Industrial Production Index, 9.8% drop in housing starts, and 0.4% decrease in personal income in May 2025 signal weakening demand (BTS). The ISM Manufacturing Index at 48.5 indicates ongoing contraction (BTS).

2. Tariff Pressures: Proposed 25% tariffs on imports from Canada and Mexico (effective February 1, 2025) and a 54% tariff on low-value e-commerce shipments (Logistics Management, January 30, 2025; BCG, June 30, 2025) increase costs for industries like automotive and retail, impacting freight demand.

3. E-Commerce Growth: A 15% increase in cross-border e-commerce in 2024 (U.S. Census Bureau) and a $6.3 trillion global online retail market drive demand for efficient freight solutions, with 68% of consumers expecting transparency (FedEx 2025 E-Commerce Trends Report).

4. Port Congestion: Tariff-driven import surges (e.g., 138,519 TEUs in Los Angeles, Journal of Commerce, June 24, 2025) and an 8.5% transborder freight decline (BTS, June 2025) strain domestic freight networks, particularly at ports like Laredo ($23.9 billion) and Detroit ($7.2 billion).

5. Rising Costs: A 5.4% LTL PPI increase (Trucking Dive, June 16, 2025) and higher fuel and labor costs pressure shippers’ margins (Logistics Management, July 1, 2025).

Key Takeaway: The Freight TSI’s decline reflects an economic slowdown, tariff pressures, e-commerce growth, port congestion, and rising costs, creating a complex freight environment.

Implications for U.S. Shippers

The Freight TSI’s 0.1% monthly and 0.9% annual decline in May 2025 has significant implications for U.S. shippers:

1. Reduced Freight Demand: Declines in rail intermodal and pipeline shipments signal weaker demand, particularly in manufacturing and energy sectors (BTS), limiting freight volumes.

2. Rising Costs: The 5.4% LTL PPI increase and tariff-driven cost hikes (Trucking Dive, June 16, 2025; FleetOwner, April 7, 2025) increase per-shipment expenses, squeezing margins.

3. Capacity Dynamics: Overcapacity from post-2023 terminal expansions (Logistics Management, July 3, 2024) keeps rates low, but carrier attrition risks shortages by Q4 2025 (Supply Chain Dive, January 14, 2025).

4. Supply Chain Disruptions: Tariff-related import surges and port congestion (Journal of Commerce, June 24, 2025) could disrupt freight flows, especially for cross-border shipments.

5. Customer Expectations: Delays or cost increases may challenge shippers’ ability to meet 68% of consumers’ transparency expectations, particularly for e-commerce (FedEx).

Key Takeaway: Shippers face reduced freight demand, rising costs, potential capacity shortages, supply chain disruptions, and pressure to meet consumer expectations.

Strategic Recommendations for U.S. Shippers

To navigate the Freight TSI’s decline and broader market challenges in 2025, Gain Consulting recommends the following strategies:

1. Secure Favorable Rates:

   • Conduct freight sourcing events to lock in competitive rates, leveraging current overcapacity (Logistics Management, August 4, 2024).

   • Use Gain Consulting’s benchmarking tools to target 2-3% rate increases (Uber Freight Q2 Outlook, May 2025).

2. Strengthen Carrier Relationships:

   • Build partnerships with regional carriers for reliable capacity at high-volume ports like Laredo and Detroit (BTS, June 2025).

   • Negotiate volume discounts to offset tariff-driven cost increases (Logistics Management, July 1, 2025).

3. Optimize Freight Operations:

   • Consolidate shipments to maximize density and reduce costs, particularly for cross-border freight (DC Velocity, June 19, 2025).

   • Prioritize high-margin shipments to mitigate rising operational costs (BTS).

4. Leverage Technology:

   • Adopt AI-driven forecasting to predict freight volumes and optimize routing, addressing demand fluctuations (24/7 Staff, June 2025).

   • Implement transportation management systems to enhance efficiency and manage costs (Logistics Management, July 1, 2025).

5. Enhance Inventory Management:

   • Use predictive analytics to balance inventory, mitigating risks of overstocking or stockouts (Supply Chain Management Review, June 2025).

   • Establish distribution hubs near key ports to streamline freight flows (BTS, June 2025).

6. Monitor Market Trends:

   • Track tariff updates (Journal of Commerce, June 24, 2025) for February 1, July 9, and August 14 deadlines to leverage USMCA benefits (BTS).

   • Stay informed via industry webinars and publications for freight and tariff insights (Logistics Management, June 3, 2025).

7. Improve Customer Communication:

   • Provide transparent delivery updates to meet 68% of shoppers’ transparency expectations, using Gain Consulting’s branded tracking solutions (FedEx).

   • Notify customers of potential delays due to port congestion or tariff disruptions (Journal of Commerce).

8. Prepare for Peak Season:

   • Secure capacity early for Q4 2025, as import declines (8.1-21.8%, Global Port Tracker, June 2025) and tariffs may tighten networks (DAT One).

   • Use Gain Consulting’s expertise to negotiate contracts and mitigate disruptions (Logistics Management, July 1, 2025).

Key Takeaway: Shippers can navigate the Freight TSI’s decline by securing rates, strengthening carrier ties, optimizing operations, leveraging technology, managing inventory, monitoring trends, communicating effectively, and preparing for peak seasons.

How Gain Consulting Can Support Your Success

Gain Consulting is your trusted partner in navigating the challenging freight market of 2025. Our tailored solutions include:

• Rate Negotiation: Secure competitive rates using advanced benchmarking tools.

• Freight Optimization: Consolidate shipments and secure capacity at key ports with AI-driven strategies.

• Inventory Management: Deploy predictive analytics and distribution hubs to balance stock and costs.

• Technology Integration: Implement transportation management systems for operational efficiency.

• Customer Experience: Offer branded tracking and transparent communication to maintain trust.

• Market Insights: Provide real-time tariff and freight trend analysis for strategic planning.

The Freight TSI’s 0.9% year-over-year decline signals a challenging market, but Gain Consulting can help you build a resilient, cost-effective supply chain.

Contact Gain Consulting today to future-proof your logistics strategy.

Sources: Bureau of Transportation Statistics, “Freight Transportation Services Index,” July 10, 2025; Logistics Management, “36th Annual State of Logistics Report,” July 1, 2025; Logistics Management, “CSCMP State of Logistics Report,” June 3, 2025; CCJ, “Old Dominion, XPO, and Saia See Shipment Declines,” June 18, 2025; Trucking Dive, “LTL PPI Increase,” June 16, 2025; Journal of Commerce, “Tariff-Driven Import Surge,” June 24, 2025; Economy in Brief, “Philadelphia Fed Factory Index,” June 23, 2025; Bureau of Transportation Statistics, “Transborder Freight,” June 2025; FedEx 2025 E-Commerce Trends Report, February 18, 2025; U.S. Census Bureau, E-Commerce Statistics, 2024; Supply Chain Management Review, Inventory Trends, June 2025; DAT One, Freight Market Trends, June 2025; Uber Freight Q2 Outlook, May 2025; Logistics Management, “Quest for Quality 2024: Truckload,” August 4, 2024; Supply Chain Dive, “2025’s Logistics Risks Include Tariffs, Labor Strife,” January 14, 2025; FleetOwner, “Supply Chain Expert Analyzes Impact of Tariffs,” April 7, 2025; BCG, “How Logistics Companies Can Navigate Tariffs,” June 30, 2025.