Tuesday’s (Sept. 17) Cass Freight Index suggesting trade wars continue to be a drag on shipping and logistics is likely not a surprise for folks at Lowell-based J.B. Hunt Transport Services[1] or Fort Smith-based ArcBest[2]. But it’s not welcome news for the industry.
The shipments component of the index[3] was down 1.5% in August compared with July, and down 9.3% compared with August 2024. The index rose 13% in 2021, rose 0.6% in 2022, declined 5.5% in 2023, and declined 4.1% in 2024, “and is trending toward another considerable decline in 2025,” according to report author Tim Denoyer with ACT Research[4].
“The long freight downturn persists, though we note that truckload freight is up in the Cass data, while LTL has declined significantly,” Denoyer said. “Container and intermodal volumes were also up from year-ago levels in August.”
The expenditures component of the index, which measures how much is spent on freight, fell 2.8% in August compared to July and was down 0.4% compared with August 2024.
“The flattish results of the past two months were a combination of lower shipment volumes and higher rates,” Denoyer noted in the report.
The index includes data on all domestic freight modes and is created using 36 million invoices and $36 billion in spend processed by Cass, according Cass Information Systems which manages the index.
Denoyer said the freight sector was “nearing balance in late 2024 and early 2025,” but trade wars begun with President Donald Trump’s tariff policies reversed the improving trends.
“Since the start of the trade war, momentum has slowed sharply,” Denoyer wrote. “Ongoing volume softness has kept conditions from tightening, and most of the adverse effects of tariffs are still to come. As the economy is likely to absorb the effects of tariffs over the next several months, our freight demand outlook remains cautious. But the silver lining of lower heavy vehicle production and lost manufacturing jobs is that tighter capacity will likely drive freight back to the for-hire market eventually.”
Recent reports from J.B. Hunt and ArcBest, two of the largest publicly-held trucking and logistics operations in Arkansas, also suggest a soft freight market. Through the first half of 2025[5], Hunt’s net income declined by 4.2% to $99.22 million from $103.62 million in the same period last year. Revenue decreased by 0.39% to $5.84 billion from $5.87 billion.
An investor note issued Wednesday by Little Rock-based Stephens Inc. estimates J.B. Hunt may be able to best weather the downturn because of its numerous freight and logistics segments.
“While it’s unclear when we will see an improvement in the truckload cycle, we continue to believe JBHT can leverage its 5 unique segments to relatively outperform peers. We have an Overweight rating and a $172 price target,” noted analysts Brady Lierz, Reed Seay, and Senior Associate Joe Enderlin.
Shares of J.B. Hunt (NASDAQ: JBHT) closed Wednesday at $134.52, down $3.28, or 2.4%. The share price in the past 52 weeks has ranged between $200.40 and $122.79.
ArcBest on Sept. 8[6] said continued weakness in the U.S. manufacturing and housing sectors are reasons the shipping and logistics company may post lower-than-expected financials in the third quarter. ArcBest net income in the first half of the year totaled $28.94 million, below $44.612 million in the same period of 2024. Revenue in the first half of the year was $1.989 billion, below $2.114 billion in the same period of 2024.
The company said it expects an operating ratio decline in the quarter based on the July and August results. ArcBest shares (NASDAQ: ARCB) closed Wednesday at $70.05, down $3.18, or 4.3%. The share price in the past 52 weeks has ranged between $123.26 and $55.19.
The Arkansas Trucking Association[7] estimates there are 102,150 trucking industry jobs in the state, or 1 in every 11 jobs. The association also said that the Arkansas trucking industry paid more than $5.6 billion in wages in 2023, the most recent year available.
Related
References
- ^ J.B. Hunt Transport Services (www.jbhunt.com)
- ^ ArcBest (arcb.com)
- ^ the index (www.cassinfo.com)
- ^ ACT Research (www.actresearch.net)
- ^ first half of 2025 (talkbusiness.net)
- ^ on Sept. 8 (talkbusiness.net)
- ^ Arkansas Trucking Association (www.arkansastrucking.com)