Weak freight demand in July shows the impact of inventory being pulled forward to skirt tariffs

[Aerial View of Rail Classification Yard, The MacMillan Yard, Maple, Vaughan, Canada]
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The Cass Freight Index showed another decline in U.S. freight markets in July to highlight the ongoing challenges facing the logistics and transportation sectors. Tariffs hit shipments harder in the most recent data, as paybacks began from demand pull-forwards earlier in the year, according to Cass Information Systems.

The shipments component fell 1.8% month-over-month in July and 1.7% when seasonally adjusted, contributing to a year-over-year decrease of 6.9%. On a broad scale, the readings mark a sustained downward trend, following declines of 5.5% in 2023 and 4.1% in 2024, with 2025 expected to see another notable drop.

The expenditures component, measuring total freight spending, also slipped by 1.5% from the prior month; however, on a year-over-year basis, it registered a slight gain of 0.4%. That uptick was largely attributed to higher inferred rates, which rose 7.9% year-over-year, primarily driven by a shift in modal mix favoring truckloads over less-than-truckload shipments.

The Cass Inferred Freight Rates, derived from the ratio of expenditures to shipments, climbed 0.4% month-over-month and 1.1% when seasonally adjusted. These rate increases reflect the influence of changing transportation modes rather than a broad acceleration in market rates. The Cass Truckload Linehaul Index, which tracks per-mile pricing for truckload shipments, fell 0.6% in July after inching up 0.4% in June. This index had declined 10% in 2023 and 3.4% in 2024, but showed a modest 1.3% gain in the first half of 2025 and is expected to post a small overall increase by the end of the year.

Publicly traded stocks that could be impacted by the demand trends include major logistics and trucking companies such as J.B. Hunt Transport Services (JBHT [https://seekingalpha.com/symbol/JBHT]), Old Dominion Freight Line (ODFL [https://seekingalpha.com/symbol/ODFL]), Werner Enterprises (WERN [https://seekingalpha.com/symbol/WERN]), Heartland Express (HLD), XPO (XPO [https://seekingalpha.com/symbol/XPO]), and Knight-Swift Transportation (KNX [https://seekingalpha.com/symbol/KNX]), as well as rail operators like Union Pacific (UNP [https://seekingalpha.com/symbol/UNP]) and CSX Corporation (CSX [https://seekingalpha.com/symbol/CSX]).

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