Freight volumes are showing the strongest signs of recovery in 18 months, with the Cass Freight Index recording its smallest year-over-year decline since late 2024, according to the monthly report from Cass Information Systems (NASDAQ: CASS). The supply-driven rate recovery that began late last year is now being reinforced by improving demand as capacity continues to tighten.
The multimodal shipments component of the Cass Freight Index dipped just 1.2% year over year in May — the smallest drop in 18 months and a marked improvement from the 5.2% two-year stacked decline, which was the narrowest since February 2024. On a month-over-month basis, shipments rose 3% from April, though they edged down 0.3% on a seasonally adjusted basis.
"These are positive signs that a volume recovery in the second half of the year remains likely," the Monday report said. "While it may not be a consumer-led recovery, inventories are tight, tariffs are falling, and the U.S. dollar is soft, all of which support demand growth." According to Cass, an increase in domestic intermodal volumes and "many spot indicators suggest improving freight demand" were behind the improvement.
Expenditures and Rates Surge
The expenditures index — which measures total freight spend including fuel — jumped 7.5% year over year in May, the largest increase since late 2022. It was up 5.3% from April (4.9% seasonally adjusted). Cass attributed the jump to a smaller decline in shipments, elevated fuel prices, and higher freight rates.
The truckload linehaul index, which tracks rates excluding fuel and accessorial surcharges, increased 6.9% year over year — the largest gain in nearly four years. This index, which includes both spot and contract rates for for-hire carriers, has now posted year-over-year increases for 17 consecutive months.
| Metric | May 2026 | YoY | 2-Year Stack | MoM | MoM (SA) |
|---|---|---|---|---|---|
| Shipments | -1.2% | -1.2% | -5.2% | 3.0% | -0.3% |
| Expenditures | 7.5% | 7.5% | 8.3% | 5.3% | 4.9% |
| TL Linehaul Index | 6.9% | 6.9% | 7.5% | 0.4% | NM |
Supply Constraints Driving Rate Hikes
"Volumes are beginning to recover, but it is mainly supply constraints supporting higher rates, in our view, both for equipment capacity and drivers," the report said. Truckload capacity began exiting the market last year as authorities tightened enforcement of non-domiciled CDL and English proficiency rules, alongside crackdowns on questionable driver schools and ELD providers. Recent developments — including increased policing of cabotage rules and the Supreme Court’s broker liability ruling — are further pushing noncompliant drivers out of the industry.
According to Cass, contract rates set earlier this year are proving too low as capacity continues to dwindle. Publicly traded carriers appearing at an investor conference last week see the potential for double-digit rate hikes this year and next as routing guides crumble. That would mark a significant turnaround after a nearly four-year downturn.
Implications for Shippers and Operators
With capacity tightening and rates climbing, shippers should prepare for higher transportation costs in the second half of 2026. The Cass Freight Index is projected to log a 1.8% year-over-year increase in the back half, assuming historical seasonal trends hold. Logistics managers should review contract rates and expect upward pressure on spot and contract pricing. The supply constraints — particularly driver availability — are unlikely to ease quickly, meaning rate increases may persist into 2027.
Cass Information Systems processes $37 billion in freight payables annually on behalf of its customers, providing a broad view of U.S. freight activity. The data in this report comes from bills paid by Cass across all modes.
Watch List
- Driver enforcement actions: Further tightening of cabotage rules or Supreme Court rulings could accelerate capacity exits.
- Tariff and dollar trends: Falling tariffs and a soft dollar support demand growth, as noted in the report.
- Contract rate negotiations: Carriers are signaling double-digit increases; shippers should secure capacity early.
- Fuel prices: Elevated fuel costs are boosting expenditures; any further rise would pressure margins.
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