Topics: Economic Shifts, Equipment Financing, Carrier Newsletter, FreightMarketTrends, Trucking Economy, CassFreightIndex
Summary:
The Cass Freight Index for September showed a welcome month-over-month bounce in shipments and expenditures, but analysts cautioned the gain was likely due to temporary freight front-loading ahead of tariffs and anticipate October volume declines; carriers like Werner CEO Derek Leathers are navigating this market uncertainty by focusing on data and efficiency, with the belief that prolonged low rates will eventually force enough capacity contraction to spark a multi-year, sustained upcycle.
The Cass Freight Index for September shows welcomed improvement: Shipments climbed 2.5% month over month, expenditures on freight increased 5.1%, and the linehaul index edged up 1.7%.
The September bump, however, was likely due to freight front-loading ahead of tariffs, and volume declines are expected in October.
All eyes are on capacity, which continues to contract. And ACT Research’s Tim Denoyer, author of the Cass Transportation Index Report, pointed out that Class 8 truck production is on track to drop about 32% from the first half of the year to the second half.
“In our view, lower capacity in an otherwise stable demand environment could move the cycle forward and actually create for-hire demand by reversing the insourcing of recent years. But this will take time,” Denoyer said.
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Freight Economy
Navigate Freight Market ‘Uncertainty’ With Cass Data
“Uncertainty” in the trucking industry is far from a new phenomenon, argues Rick Mihelic, director of emerging technologies for the North American Council for Freight Efficiency (NACFE). But today there are more opportunities for carriers to navigate market uncertainty by arming themselves with data, making efficiency gains, and relying on the wealth of information available.
“Concentrate on facts. Understand through data how your trucks are operating. Don’t accept opinions or arm-waving historical memory. Make use of telematics data to know your own trucks, loads, drivers, customers, and facilities. Recognize that changes are occurring in freight flows,” Mihelic wrote in an opinion piece published in the Commercial Carrier Journal (CCJ).
“Focus on efficiency improvement to get cost reductions and improve profits. This may mean making new capital investments in technology in a down market. Invest for the future, not the past. Reduce empty runs, underutilized assets, and aging, inefficient equipment. Train people to spot efficiency opportunities and empower them to take action.
“Make use of industry information sources. Don’t go it alone,” Mihelic wrote. “Use the information available to you.”
Cass Information Systems is a leading provider of that vital industry information. In addition to supporting carriers by making sense of the analytics, we design flexible, customized early payment solutions that align with business goals.
‘Trucking Has Always Faced Uncertainty’
Mihelic shared his thoughts in the CCJ in reaction to his observations at the FTR Transportation Conference 2025, where he heard the word “uncertainty more than a million times from shippers, carriers, and analysts.”
“Trucking has always faced uncertainty, and those who purposely navigate uncertainty win out over those who merely react to it,” Mihelic said.
He pointed to several uncertain times, including the oil embargo of 1973, the adoption of the Interstate Commerce Commission Termination Act of 1995, the dot-com bubble burst of 2000, the Great Recession of 2008-2009, and the COVID pandemic in 2020.
“So, when were you certain about anything in trucking? Let’s move past reacting to uncertainty and get on with navigating it, like freight always has,” Mihelic wrote.
“Save the uncertainty discussions for Friday happy hour while we can revisit things that Bruce Springsteen celebrates in the song ‘Glory Days.’”
Private Fleets Gain Market Share
Private fleets hauled 7% more of their own freight in 2024 than they did the year before, according to the National Private Truck Council (NPTC) 2025 benchmark report. And McLeod Software CEO Tom McLeod asserted that private fleets’ gained market share has contributed to the ongoing freight rate recession.
“To me, the freight rate recession is about one thing and one thing only, and that’s too many trucks on the road. It’s just too easy to find a truck,” he said during the recent McLeod Software UC2025. “There are two big pools of excess capacity that are out there that have been very persistent. One is that private fleets have expanded.”
But the CCJ reported that Tom Moore, the NPTC’s executive vice president, argued that he’s “not buying” talk of a continuing freight recession.
“We’ve got an awful lot of freight that we’re hauling, and every year for the past 15 years, whatever the measurement is, we’re up over the previous year,” Moore said.
He said private fleets are growing, in part, because of better customer service and strategic moves closer to the customer.
“The private fleet does provide a hedge. It has captured capacity, protecting us a little bit from the for-hire volatility that exists, and I think we’re seeing greater control over the supply chain,” Moore said.
Werner CEO Foresees ‘Sustained Upcycle’
Heavy Duty Trucking reported that Werner Enterprises CEO Derek Leathers believes that the end of the freight recession will bring a long-lasting upcycle.
Leathers said as with previous market downturns, low rates are forcing capacity out of the trucking industry, and eventually, the supply-and-demand equation will drive rates back up.
Capacity also is being affected by the rising cost of Class 8 trucks, Leathers said.
“If you want to grow and refresh, you’re going to spend about twice as much money as you would during a normal cycle,” Leathers said during the WEX OTR Summit in early October. “And there’s not that money there to be spent because they haven’t made it over the last several years.
“So as we get to this turning point, whenever it may occur, it would be my view that you’re going to have a sustained, consistent, tight capacity market for a multiyear period,” he said.
Leathers noted that trucks will cost more at “the time we can least afford for them to be more expensive.”
“I think it sets the stage for a pretty decent turn and a sustained upcycle.”
Federal Policies
Heavy-Duty Truck Tariffs Pushed to November 1
President Donald Trump has pushed the implementation of a 25% tariff on imports of medium- and heavy-duty trucks to November 1.
Mexico and Canada reportedly accounted for more than 90% of the truck imports to the United States last year.
Trump has cited national security as the rationale for the tariff on foreign-manufactured trucks.
DOT Seeks Input in Cargo Theft Fight
The U.S. Department of Transportation is asking for help developing “strategies and potential programs to reduce cargo theft.”
The DOT will accept feedback electronically, by mail, or in person through October 20.
Cargo theft across the country reached a historic high last year, up 27% from 2023, with estimated losses of more than $1 billion.
Carriers
J.B. Hunt Shuttering Georgia Facility
J.B. Hunt Transportation Services is closing its facility at the Home Depot Distribution Center in Lithonia, Georgia, on October 27.
Trucking Dive reported that J.B. Hunt cited “changing business conditions” for the closure, which will affect 74 employees. J.B. Hunt previously reduced its workforce by about 1,000 people from 2023 to 2024.
Earlier this year, J.B. Hunt reportedly identified $100 million in costs to eliminate.
On a second-quarter earnings call in July, then-CFO John Kuhlow said leadership had “challenged ourselves to do more, in an effort to accelerate improvement in our financial performance, create greater operating leverage for the company when market dynamics turn, and help support our future growth.”-
Retailers
Walmart, Dollar Tree Opening Million-Square-Foot DCs
Both Walmart and Dollar Tree have huge distribution centers in the works.
Walmart is investing $300 million in a 1.2 million-square-foot fulfillment center in Kings Mountain, North Carolina. The facility, which will be dedicated to large items like patio furniture and lawn mowers, is slated to open in 2027 and employ more than 300 people.
Dollar Tree has purchased an existing 1.25 million-square-foot DC outside Phoenix it plans to open next spring to serve stores in Arizona, Colorado, Nevada, New Mexico, and Utah. The facility is expected to employ 400 people.
Dollar True also recently broke ground on a 1 million-square-foot DC in Marietta, Oklahoma, to replace one destroyed by a tornado in the spring of 2024. It is expected to be operational by 2027.
Cass Equipment Financing
Cass Commercial Bank Equipment Financing finances trucks, trailers, and equipment. Contact Scott Williams, Vice President Commercial Equipment Finance, at (513) 545-4605 or swilliams@cassbank.com to learn more.
Why Q4 Is a Strategic Time for Equipment Financing
As the year winds down, the fourth quarter presents unique advantages for leasing or purchasing equipment. Here’s how businesses can turn timing into value:
💰 Maximize Tax Efficiency
- Accelerated Depreciation: Buyers can leverage 100% bonus depreciation while only recording a fraction of the year’s taxable income, amplifying the economic impact.
- End-of-Year Tax Planning: Equipment ownership benefits remain constant, but their value increases when applied against year-end financials.
📊 Optimize Budget Utilization
- Use It Before You Lose It: Many purchasing budgets expire at year-end. Q4 is the last window to deploy remaining funds strategically.
🤝 Leverage Seller Incentives
- Year-End Sales Goals: Sellers are motivated to close deals before December 31, often offering better terms or pricing to hit annual targets.
📅 Strategic Timing for Lease Terms
- Push End-of-Term into Next Tax Year: Structuring leases to end in a future tax year can improve cash flow and optimize financial reporting.
📈 Protect Against Price Increases
- Lock in Current Rates: Financing now helps hedge against potential equipment price hikes in the new year.
🚚 Boost Holiday Capacity
- Meet Seasonal Demand: For retail and logistics, Q4 equipment purchases can increase throughput during peak season.
🔄 Improve Financial Presentation
- Recapitalize or Refinance: Q4 is a smart time to restructure debt or refinance equipment, enhancing cash flow and balance sheet optics before year-end reporting.
