January data from Cass Information Systems showed truckload linehaul rates turned positive on a year-over-year comparison for the first time in two years. However, shipments remained soft.
The TL linehaul index, which tracks rates without fuel and accessorial surcharges, posted a 0.8% y/y increase for the month. This was the first positive y/y change since December 2022. The index also increased 0.6% from December, the fifth consecutive sequential increase.
Winter storms in January were more impactful than normal, pushing TL spot rates higher for a stretch. The report highlighted the rate turnaround but cautioned that a meaningful recovery could take time.
“There you have it, folks, another important positive freight cycle inflection,” the Thursday report said. “For those looking for something similar to the past two cycles, expect a long wait, but this cycle is moving in a positive direction.”
The linehaul rate index includes changes to both spot and contract freight.
The dataset remained lower on a two-year comparison, off 5.2% compared to January 2023. The index fell 3% in 2024 following a 10% decline in 2023.
| January 2025 | y/y | 2-year | m/m | m/m (SA) |
| Shipments | -8.2% | -15.1% | -5.3% | -2.7% |
| Expenditures | -4.2% | -27.5% | -4.8% | -2.6% |
| TL Linehaul Index | 0.8% | -5.2% | 0.6% | NM |
Shipments captured by the Cass Freight Index slid 5.3% from December (down 2.7% seasonally adjusted). The volumes index was off 8.2% y/y and 15.1% on a two-year-stacked comp, the worst decline since the 2020 COVID lockdowns.
The shipments index is trucking-centric, with more than half of recorded spend being moved by a truckload carrier.
January is a soft month for freight demand, and winter storms in areas not accustomed to them, like in the South and Southeast, knocked carrier networks offline for days.
The report also pointed to private fleets carrying more freight than they have in the past as a headwind to for-hire truck volumes. The forecast calls for the shipments index to decline approximately 10% y/y in February but potentially by a lesser amount if weather cooperates.
The fourth-quarter earnings season provided mixed commentary from TL management teams. The consensus is that demand is still tepid but pricing conversations signal contract rates will be up this year. Carriers Schneider National (NYSE: SNDR) and Werner Enterprises (NASDAQ: WERN) said the tide is turning while spot broker Landstar System (NASDAQ: LSTR) said the market is stuck between cycles.
Cass’ freight expenditures index, which captures total freight spend including fuel, was down 4.2% y/y and 2.6% from December when seasonally adjusted (down 27.5% on a two-year-stacked comp). The y/y decline was a little worse than in December, but it was all tied to the falloff in shipments.
When netting the change in shipments from the change in expenditures, actual freight rates were likely up 4.3% y/y and higher sequentially for a fifth consecutive month.
The first outlook for inferred rates in 2025 calls for a low- to mid-single-digit percentage increase.
“Perhaps the most important takeaway this month is that while volumes remain soft, capacity has adjusted enough to result in modestly higher rates,” the report said.
“Extraordinary post-pandemic insourcing” at private fleets is still weighing on for-hire demand, but “as cost economics reassert their influence, the long-term trend toward outsourcing will eventually return.”
Data used in the indexes comes from freight bills paid by Cass (NASDAQ: CASS), a provider of payment management solutions. Cass processes $36 billion in freight payables annually on behalf of customers.
More FreightWaves articles by Todd Maiden:
- Werner optimistic after tough Q4
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- Old Dominion poised to take share when market turns
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