The freight industry experienced a steady yet unremarkable March, as freight shipments remained flat sequentially and dipped by 2.1% when seasonally adjusted, according to Cass Information Systems. This marks the fourth consecutive month of mid-single-digit year-over-year declines, with volumes down 5.3% compared to the previous year.
Read also: U.S. Container Imports Surge Amid Tariff Concerns
Despite a temporary boost in February due to inventory pull-forward and recovery from January’s severe weather, the freight industry faces challenges ahead. A recent 90-day pause on many tariffs may prompt pre-tariff shipping in the second quarter, but escalating tariffs with China could counterbalance this effect. The long-term repercussions of the trade war are expected to negatively impact freight demand, with a forecasted 4% year-over-year decline in freight volumes for April.
Freight expenditures, which include fuel costs, rose 2.8% from February (up 1.5% seasonally adjusted) but were down just 2% year-over-year, marking the smallest decline since early 2023. This suggests that inferred freight rates were approximately 3% higher year-over-year in March, with the pricing environment showing modest increases since September.
The Cass Truckload Linehaul Index, which excludes fuel and surcharges, saw a slight 0.1% dip from February, ending a six-month streak of increases. However, the index was still 1.5% higher year-over-year. The freight sector is expected to see continued demand for pre-tariff goods in the coming months, but a tariff adjustment period may lead to reduced demand as prices rise.
Data from Cass, a payment management solutions provider processing $36 billion in freight payables annually, indicates that while the trade war continues to affect the industry, a recovery could be on the horizon after 39 months of year-over-year declines.
