Freight markets are sending a mixed signal this month: rates keep climbing even as volumes keep falling. Truckload linehaul pricing just posted its steepest annual gain in four years, reefer rates are cooling from a summer peak but remain well above historical norms, and a court ruling on de minimis imports adds a new cost variable for shippers already watching a cautious back-to-school consumer. Capacity, not demand, is running this market.
Truckload Rates Climb Even as Shipments Keep Falling
Cass Information Systems’ Truckload Linehaul Index rose 2.3% month over month and 8.6% year over year in July, the largest annual increase in four years and the 19th consecutive month of year-over-year growth, building to an 11.2% cumulative increase over two years. The gains came despite freight shipments falling 4.8% year over year, an acceleration from June’s 4.1% decline, while freight expenditures still rose 9.1% year over year.
Carriers are describing the dynamic as a “flight to quality,” with shippers consolidating volume onto compliant, reliable operators rather than chasing the cheapest bid. Rail intermodal has picked up some of the slack from trucking, with carloads up roughly 5% year over year as shippers look for cost relief.
Capacity Exits Keep Pricing Power With Carriers
FTR’s Trucking Conditions Index eased to 17.1 in June from 20.4 in May, but the broader capacity picture continues to favor carriers. Dry van contract rates rose 13 cents to $2.39 per mile, and reefer contract rates rose 9 cents to $2.62 per mile between June and July, even as volumes fell 6% for dry van, 5% for reefer, and 8% for flatbed over the same period.
DAT’s Dean Croke called the pattern unusual. “Spot rates moving ahead of contract rates have historically signaled a tightening market, but we haven’t seen a capacity-driven market quite like this one,” he said. Tractor order backlogs, more than double year-ago levels as of the end of June, suggest fleets are still cautious about adding capacity even as rates rise — reinforcing FTR’s outlook that the market will remain favorable for carriers throughout our two-year forecast horizon, even as the pace of recovery stabilizes.
De Minimis Repeal Upheld, Adding Cost Layer for Importers
On August 14, the U.S. Court of International Trade upheld the elimination of the de minimis exemption that previously let imports under $800 enter the U.S. duty and tax free. A three-judge panel ruled the administration had legal authority under the International Emergency Economic Powers Act (IEEPA) to rescind the exemption, rejecting a challenge from Michigan auto parts importer Detroit Axle, which had argued the move functioned as a new tariff.
The court disagreed, finding that “eliminating a tariff exemption is functionally identical to imposing a tariff on previously exempted goods” was “unavailing” as an argument. For shippers reliant on low-value, high-volume import lanes, the ruling removes any near-term hope of relief and locks in higher landed costs — one more variable feeding into an already selective, margin-conscious peak season.
Reefer Rates Ease From Peak, But Floor Higher Than Last Year
DAT’s latest reefer report shows produce season cooling from its summer highs: national reefer spot linehaul averaged $2.64 per mile for the week ending August 12, down 0.3% week over week but up 35% year over year and still 26.2% above the nine-year seasonal average of $2.09 per mile. Load-to-truck ratios actually rose to 19.51 from 18.86 the prior week even as load and truck postings both declined, a sign the pullback is orderly rather than a demand collapse.
Regional divergence remains sharp. California citrus lanes into the Northeast are running short on capacity, with some rates topping $10,000 per load, while South Texas has a truck surplus that pushed rates down 5-11% week over week (still 9-31% above year-ago levels). Washington tree fruit lanes were flat week over week but up double digits year over year across the board. As DAT put it, the market “took a broad step back week over week, but off a plateau that still sits far above 2025.”
A Cautious Consumer Keeps Lid on Peak-Season Demand
Retail data is reinforcing why volumes aren’t keeping pace with rates. Circana reports that back-to-school retail sales revenue fell 1% year over year in July, with unit sales down 2%; discretionary general merchandise dropped 4.3%; and unit demand fell 3.9% in the four weeks ending August 1.
Spending is still expected to hit record numbers for K-12 students, but that growth is being driven by price increases and higher-income households rather than broader demand — 40% of parents expect more financial stress than last year, and 45% of households now plan to use buy-now-pay-later financing, up from 39% in 2025.
Circana’s Kiara Barrett summarized the shift: “Consumers are still spending, but they are increasingly doing so through prioritization rather than expansion.” For shippers, that means steady but selective volume heading into peak season, concentrated on essentials rather than broad-based restocking.
Seamless Freight Operations With Zengistics
Every data point this month shows capacity is the constraint, not demand. Rates are rising on tighter compliant capacity and carrier discipline even as shipment volumes soften and consumers spend more cautiously. Shippers that lock in reliable, compliant capacity now and build a cost cushion for import and tariff exposure will be best positioned as peak season unfolds.
Speak to one of our experts to build a freight strategy that holds up under a capacity-constrained market. Connect with us today.
