It is no secret that trucking is the heart of the nation’s freight system, as most products transported within the United States find their way onto trucks. That’s why DC Velocity is now partnering with U.S. Bank each quarter to present the “U.S. Bank Freight Payment Index Report.”
U.S. Bank is a provider of freight audit and payment services that processes more than $46 billion in freight bills annually. In addition to acting as a financial intermediary, the company offers data analytics through the U.S. Bank Freight Payment Index, which measures quantitative changes in freight shipments and spend activity based on data from transactions processed through the U.S. Bank Freight Payment platform. The report generated from these indices provides a quick snapshot into the freight industry, including breakouts of shipping trends throughout America’s regional markets.
The following is a condensed version of the “Q4 2025 U.S. Bank Freight Payment Index Report.” This represents the first is series of reports that will appear on quarterly basis in DC Velocity. The full U.S. Bank Freight Payment Index is available at freight.usbank.com.
National freight market overview
EXHIBIT 1
The “Q4 2025 U.S. Bank Freight Payment Index Report” shows that the U.S. truck freight market saw a modest improvement in shipment volumes during 2025 (see Exhibit 1), while tightening capacity drove shipper spending to its highest level since early 2024. National shipments rose 1.5% from the previous quarter, while spending jumped 4.6%.
According to the U.S. Bank National Shipments Index, demand remained subdued throughout the fourth quarter of 2025. During this period, manufacturing output showed no month-over-month growth for the last four consecutive months of 2025, and in December the Institute for Supply Management (ISM) Manufacturing Index hit its lowest level since October 2024. Meanwhile retail sales growth for 2025 through October was only minimally above the increase in inflation over the past year.
“Freight market conditions remained challenging in Q4, with manufacturing, construction, and consumer spending all showing strain,” said Bob Costello, senior vice president and chief economist at the American Trucking Associations. “The capacity adjustments we’re seeing across the industry are a natural response to these prolonged demand headwinds.”
Indeed prolonged market downturns over the last few years led to reduced rates, which prompted carriers to downsize fleets and decrease the number of independent contractors. This year also saw a decrease in the total number of carriers operating. At the same time, stricter government regulations, including tougher English Language Proficiency standards, and stricter enforcement of those regulations removed thousands of drivers from service. The Department of Transportation (DOT) also temporarily paused the issuance of nondomiciled commercial driver’s licenses (CDLs) to certain noncitizens and nonpermanent residents until full compliance with new DOT regulations was achieved. This rule potentially affected nearly 194,000 CDL holders, although a court case has suspended its implementation for now. There have also been cases of foreign drivers operating without proper work authorization, though new measures are expected to curb such occurrences.
This overall tightening of industry capacity in Q4 resulted in an increase in shipping costs, despite a smaller-than-usual peak-season volume lift. Spot market rates climbed quarter-over-quarter and year-over-year, highlighting tighter capacity across the freight sector.
“The capacity story is the defining theme of Q4. Shippers paid significantly more to move slightly more freight—clear evidence that available truck capacity continues to tighten,” said Bobby Holland, U.S. Bank director of freight business analytics. “Between fleet exits and carriers reducing their rosters, the industry is feeling the effects of prolonged contraction.”
Freight spot, contract, and fuel rates
EXHIBIT 2: Spot and contract rates come from DAT’s truckload data, which reflects a weighted average pricing from dry van, reefer, and flatbed shipments. Rates shown are not inclusive of fuel costs, which are displayed as a separate item to make trends easier to see.
The U.S. Bank data is supported by findings from DAT Freight & Analytics (see Exhibit 2). The freight analytics and technology firm says that rates increased during the final quarter of 2025. Specifically, spot market rates—which typically precede changes in contract rates—rose by an average of 10 cents per mile, representing a 4.8% increase over the third quarter. Over the second half of the year, spot rates advanced by 6.2% relative to the second quarter. Contract rates also posted sequential growth for the last two quarters of the year, albeit at a more moderate rate of 1.4%. In the third quarter, contract rates increased by 1.1%.
On a year-over-year basis, both rate categories registered gains. Spot rates experienced the largest rise, up 5.1%, substantially higher than the 1.4% annual gain observed in the third quarter. Contract rates increased by 2.9% compared to the final quarter of 2024, exceeding the 0.7% improvement seen in the prior quarter.Shippers benefited from a slight reduction in fuel expenditures relative to the third quarter, with average outlays declining by one cent per mile or 2.9%. However, fuel costs were 7.2% higher compared to the same period one year earlier.
Regional shipments and spending
Regional data from U.S. Bank shows that trucking capacity tightened in most parts of the U.S. during the fourth quarter of 2025, with mixed results in freight shipment volumes, as some regions saw gains while others were flat or declining.Despite uneven shipment volumes, fourth quarter spending rose nearly everywhere, driven mainly by higher freight rates. This rate increase was evident because shippers in regions with declining freight still had to pay more to transport less, while regions with rising freight volumes experienced even greater spending hikes. Because diesel prices held steady or decreased from the third quarter, fuel surcharges were not behind the rise in total costs, leaving shrinking capacity as the explanation for price increases. When compared to the same period in the previous year, only the Southeast region showed a reduction in spending.
West regional shipments and spending
In the last quarter of 2025, shipments in the West experienced a slight drop, with the West Regional Shipments Index falling by 1.3% compared to the previous quarter. Freight levels remained 5.4% higher than the same time a year ago.
Early reports suggest that seaport and land port volumes dipped slightly from the third quarter and may have decreased compared to last year as well. The Port of Los Angeles reported that trade policy uncertainty led to lower volumes in November and only a minor increase in October over the previous year. Truck traffic at land ports for October and November was 2.9% below the average recorded in the third quarter.
Additionally, the Federal Reserve’s Beige Book—officially titled “Summary of Commentary on Current Economic Conditions”—highlighted weaker retail activity in the region from October through mid-November, along with subdued manufacturing and residential construction.
Despite this quarterly setback, 2025 was a strong year overall for freight in the West, with the annual average up 3.2% compared to 2024. While that may not seem like a huge increase, it is significant considering freight volumes dropped more than 16% in both 2023 and 2024. Changes in tariff-related trade policies in 2025 helped boost import volumes and drive freight higher.
During the fourth quarter, the West Regional Spend Index was up 2.6% from the third quarter. Spend was also up 9.4% from a year earlier, the fourth straight quarter that saw a year-over-year gain and the largest gain since the third quarter of 2022. Although spend increased by a small amount in 2025, it is still below pandemic boom levels.
Southwest regional shipments and spending
Freight activity in the Southwest region remained unpredictable during the fourth quarter. After dropping 15.7% in the third quarter, the Southwest Regional Shipment Index bounced back with a 5.4% gain, yet still ended the year 25.4% lower than the previous year. Overall, 2025 was particularly challenging for freight in this area: The annual shipment average fell 31.6% compared to 2024, marking the steepest decline among all five regions.
Although freight levels recovered from the third quarter, cross-border movement dipped slightly, dropping 0.8% from the quarterly average. Inbound truck traffic from Mexico for October and November also decreased by 1.3% versus figures for the same period last year. According to the latest Federal Reserve Beige Book, the Federal Reserve Bank of Dallas reported falling retail sales early in the quarter, likely affecting freight volumes in the region.
Despite these soft freight volumes, shipping costs surged because of tighter capacity. In the fourth quarter, the Southwest Regional Spend Index increased by 12.6% from the prior quarter and 16.8% over the same period last year. This trend was evident throughout the year, with the annual average spending index rising 7.5% above the 2024 average, even though shipped volumes declined sharply. Stricter English language proficiency requirements for commercial truck drivers most likely played a role in tightening capacity and pushing rates higher throughout the region.
Midwest regional shipments and spending
The Midwest Regional Shipments Index increased by 3.5% during the final quarter of 2025, following a 2.2% decline in the third quarter. This improvement is notable given that inbound freight from Canada—a key indicator of regional manufacturing activity due to its role as a supplier for U.S. factories—experienced a slight decrease of 1.3% in October and November.
Similarly, the Federal Reserve Bank of Cleveland reported a minor decline in demand for manufactured goods early in the quarter, continuing a trend from the previous reporting period. In contrast, the Federal Reserve Bank of Chicago observed some improvement in general goods activity within its region during October and early November, with modest increases in construction, manufacturing, and consumer spending supporting truck freight volumes.
On a year-over-year basis, truck freight volumes in the Midwest were down 3.3% compared to the fourth quarter of 2024. However, this represented the strongest performance among all quarters in 2025.
The Midwest Regional Spend Index rose by 5% from the third quarter, slightly outperforming volume growth and indicating modest rate improvements. Compared to the same period in 2024, shipper spending remained essentially flat, increasing just 0.1%.
Northeast regional shipments and spending
The Northeast stood out as the top region for both shipments and spending in the fourth quarter, from a motor carrier’s viewpoint. The region was unique in posting both quarter-over-quarter and year-over-year increases in these areas. The Northeast Regional Shipments Index rose by 4.2% compared to the previous quarter, marking a fourth straight quarterly gain.
Manufacturing activity picked up modestly early in the quarter, especially in New York State and New England but was somewhat weaker in central and eastern Pennsylvania and southern New Jersey. As was the case across the U.S., lower- and middle-income households in the Northeast spent less in the early part of the quarter, though higher income households helped offset this trend.
Shippers saw increased costs in the region due to higher freight volumes combined with modest rate hikes. The Northeast Regional Spend Index climbed 5.5% in Q4 compared to Q3 and 16.7% from a year ago.
Southeast regional shipments and spending
Besides the West, the Southeast was the only region to see consecutive shipment declines in the fourth quarter, with freight volumes falling 2.4%. Over Q3 and Q4, the total decline was 4.4%. The federal government shutdown likely affected the region’s northern parts, where a high number of government employees cut back on spending.
The Federal Reserve noted in the first six weeks of the quarter that consumer confidence was down, impacting larger purchases. Manufacturing contacts also reported reduced new orders amid tariff uncertainty. The Federal Reserve Bank of Atlanta observed that middle- and lower-income households were more cautious with discretionary spending, while higher-income groups maintained their habits.
Year-over-year, the Southeast Regional Shipments Index dropped 5.9%—the second-largest decline among the five regions, behind the Southwest’s 25.4% decrease. Still, this was an improvement from the 9.1% contraction in 2024.
While the Southeast posted a marginal 0.7% increase in spending compared to the third quarter—the smallest growth among all regions—it also registered the lowest gain for the second half of the year at 2.3%. The Midwest followed with a 3.6% increase, while both the Southwest and West regions reported double-digit gains in the latter half of 2025.
National/regional macroview key takeaways
- Industry capacity continued to shrink in Q4 2025, driven by carrier exits, regulatory changes, and stricter driver requirements. While shipment volumes improved slightly, shippers faced higher costs as fewer drivers and smaller fleets strained available capacity.
- Freight volumes rebounded from Q3 2025’s contraction but remained well below historical norms. Shipper spending rose for the third straight quarter, outpacing volume growth as tighter capacity pushed rates higher.
- Capacity constraints and rate increases drove up costs across most regions, even where shipment volumes were flat or declining. The Northeast and Southwest stood out for their contrasting trends, with the Northeast seeing robust gains and the Southwest facing steep year-over-year declines.
Regional microview key takeways
West: Freight volumes dipped slightly, impacted by softer port activity and cautious consumer spending. However, annual shipment levels improved, supported by changes in trade policy and a rebound in imports. Shipper spending continued to climb but remains below pandemic highs.
Southwest: Saw a brief recovery in shipments after a sharp Q3 2025 drop, but volumes ended the year far below 2024 levels. Tightened capacity—driven by regulatory changes and labor challenges—pushed shipping costs up sharply, even as cross-border activity softened.
Midwest: Shipments improved in Q4 2025, supported by modest gains in manufacturing and construction. However, inbound freight from Canada and overall consumer demand remained subdued, keeping annual volumes below last year. Shipper spending edged up, reflecting modest rate increases.
Northeast: Led the nation with consecutive quarterly and annual increases in both shipments and spending. Manufacturing growth and resilient consumer activity, especially among higher-income households, helped drive gains, despite pockets of weakness in Pennsylvania and New Jersey.
Southeast: Freight volumes declined for the second straight quarter, affected by reduced consumer confidence, tariff uncertainty, and cautious spending among middle- and lower-income households. Shipper spending rose only slightly, reflecting the region’s muted demand and rate environment.
