Even with modest volume gains, tight driver availability, new regulatory barriers to entry, and a slow-growing trailer and tractor fleet are supporting rates, rather than a boost in freight volumes.
The Cass Freight Index’s shipments component rose 5.6% month over month and 2.1% year over year in August, marking the first annual gain since January 2023. This also ends a 42-month downturn, the longest in the index’s history.
Freight costs highlighted a clearer trend: the Cass Freight Index’s expenditures component rose to 19% year over year in August, up from 9.1% in July, driven by higher shipments and firming rates.
The Cass Truckload Linehaul Index (which reflects both spot and contract rates) rose to 153.9 in August, up 0.7% month over month and 11.3% year over year. ACT Research Vice President and Senior Analyst Tim Denoyer noted that even as spot rates soften with modest sequential declines, the much larger contract market continues adjusting higher.
[RELATED: Diesel spike, political turmoil send auto haulers's costs soaring]
Tightening capacity
ACT Research’s Freight Forecast for September pointed to a tightening truckload market. While August DAT contract truckload rates held steady at $2.52 per mile (up 18% year over year), driver availability tightened to 35.9 as spot equipment capacity hit decade-level lows.
“Tighter capacity and a modest improvement in demand are likely to keep upward pressure on freight rates over the next 12 to 18 months,” Denoyer said.
He pointed to new broker liability laws and FMCSA driver regulations as fresh barriers to entry, adding that while Class 8 tractor production is increasing, fleet growth will stay slow because of replacement demand and elevated exports.
Denoyer said the recent $120 billion in tariff refunds could increase freight demand and boost the long-awaited inventory restock but called supply constraints the “primary drivers of current market dynamics,” forecasting the “stronger for longer” for-hire rate cycle to persist.
That view was echoed in ACT’s North American Commercial Vehicle Outlook, which left Class 5-7 and Class 8 forecasts unchanged, while the trailer forecast was trimmed on supply chain ramp challenges.
“Supply-side constraints remain the defining feature of this cycle to date, even as carrier profitability improves and replacement demand builds,” said Ken Vieth, ACT’s president and senior analyst.
Vieth noted that Class 8 backlogs remain long as manufacturers work through production bottlenecks.
[RELATED: Surging diesel and tightening capacity continue to push rates higher]
Spot rates post record seasonal drop
DAT Freight & Analytics reported that national average spot rates fell across all three major equipment types in August, marking the sharpest July-to-August decline in DAT’s 16-year rate history:
- Van rates: Dropped 8.4% to $2.19/mile (beating the previous record drop of 6.7% in 2018).
- Reefer rates: Dropped 5.1% to $2.61/mile (beating the previous record of 4.8% in 2012 and 2013).
- Flatbed: Dropped 6.9% to $2.70/mile (beating the previous record of 6.4% in 2023).
This plunge knocked van and reefer spot rates back below contract rates, ending the brief stretch in June and July when spot paid more. Van spot rates now sit 22 cents below contract rates, reefer trails by 4 cents, and flatbed’s gap widened to 38 cents.
Despite the drop, DAT noted that spot rates are still more than 30% higher than in August last year. The DAT Truckload Volume index, which measures loads moved during the month, slowed down slightly: van, reefer and flatbed dropped 5%, 2% and 3%, respectively.
This was mostly because shippers moved freight earlier in the summer and partly due to normal seasonality, said DAT principal industry analyst Dean Croke.
Croke noted that capacity tightened sharply during CVSA Brake Safety Week even as rates fell, indicating cooling demand heading into the first week of September and the Labor Day holiday.
Rising diesel prices also added extra financial pressure, DAT noted, pushing van fuel surcharges up 8 cents to $0.70 per mile, reefer surcharges up 10 cents to $0.77 per mile, and flatbed up 10 cents to $0.84 per mile.
