The freight market caught its breath in August. Capacity is still tightening, but the pace has slowed to its calmest in months, and spot rates are holding near their highs, even through a holiday-shortened week. At the same time, manufacturing growth cooled from July’s four-year peak, price pressure kept building, and cross-border trade with Mexico set an all-time record. For shippers, it adds up to a market that’s stabilizing but not settling — plenty of moving parts to watch heading into peak season.
Manufacturing growth cooled last month, with the Manufacturing PMI slipping to 54.6 from July’s four-year high — still comfortably in expansion territory, but short of expectations. New orders and backlogs both eased, though manufacturing employment grew for a second straight month after nearly three years of contraction.
Price pressure hasn’t let up: raw material costs have now risen for nearly two years running, and supplier deliveries slowed for a ninth consecutive month, a sign that constraints are still working through the system even as growth itself decelerates. Some of the pullback may reflect companies pulling inventory forward ahead of tariff changes, a pattern we’ve been tracking since our August newsletter.
DAT’s latest dry van report shows spot linehaul rates ticking down slightly around the Labor Day holiday, but they remain near the top of their range for the year — up roughly a third from a year ago and well above the multiyear seasonal average. Bellwether lanes across a 10-state basket held even higher.
Load postings fell around the holiday week as expected, but truck postings pulled back even further, keeping capacity tight relative to demand. DAT’s near-term forecast expects rates to hold roughly steady into mid-October.
The Logistics Managers’ Index shows capacity contraction easing to its slowest pace in six months, while transportation prices and utilization both moved higher. It’s a sign the market may be stabilizing rather than continuing to tighten sharply, making it a shift from the squeeze we wrote about in July.
Looking ahead, logistics professionals still expect capacity to keep contracting over the next year, though at a milder pace, with retailers notably more optimistic about available capacity than manufacturers and wholesalers. Warehouse capacity loosened too, even as logistics costs kept climbing. “Logistics costs seem to be rapidly increasing no matter what the underlying situation is," the survey’s researchers noted.
The New York Fed’s Empire State Manufacturing Survey pulled back sharply this month, while its prices-paid index jumped to its highest level in more than four years. Treasury Secretary Scott Bessent countered that U.S. manufacturing is “roaring back to its fastest pace in years," but the survey suggests the on-the-ground picture is more mixed.
The inflation backdrop isn’t helping: the 10-year Treasury yield climbed to its highest level in nearly two decades, and oil prices have jumped more than 20% over the past month alone. “Demand for manufactured goods, while resilient for now, will likely wobble as output prices rise,” said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.
Trade between the U.S. and Mexico hit an all-time monthly high of $94.8 billion in July, up more than a quarter from a year earlier, cementing Mexico’s place as America’s top trading partner ahead of Canada and China. Imports from Mexico grew notably faster than exports, underscoring just how much cross-border freight is moving north.
The Laredo gateway, the busiest land port for that trade, posted its strongest July on record, driven in part by rising shipments of motor vehicle parts. For shippers moving freight across the border, capacity at gateways like Laredo is becoming as important a planning factor as the tariffs driving the volume in the first place — the same dynamic we explored in our look at intermodal economics.
Whether capacity is stabilizing, rates are holding near their highs, or cross-border volume is setting records, shippers need a partner who can flex with the market. VCPB’s over-the-road network keeps freight moving at the rates the market demands, our drayage management services help absorb congestion at busy gateways, and our intermodal solutions give shippers a cost-effective way to move volume as cross-border trade keeps climbing.
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