State of Freight – December 2025: The Night Is Darkest Just Before the Dawn
December doesn’t feel like a crash so much as a very slow leak:
- Freight volumes aren’t collapsing, but they’re not recovering either.
- Factories are still producing, but no one’s ordering.
- Spot rates are technically rising, but only if you squint past inflation.
The good news is that the floor isn’t so bad. The bad news is that we’re laying face down on it.
Let’s break it all down in this month’s freight market update, brought to you by our very own team of transportation geeks.
Plowing through a stop sign
Like a 40-year-old man continuing to hit on a college girl at the bar after her seventh “that’s crazy…” in five minutes, factories kept making stuff in November, despite the clearest signs yet that they should probably stop.
ISM Manufacturing PMI: 48.2 (contraction for the 9th month)
- Production: 51.4 (still expanding)
- New Orders: 47.4 (contracting)
- Backlogs: Down for 38 straight month
S&P Global PMI: 52.2
- Finished Goods Inventory: Record build-up
- Order-to-Inventory Ratio: Near record-low
- Export Orders: Declining for 5 straight months
S&P Global called it “unplanned accumulation,” which is a nice way of saying “stuff no one asked for.”
Warehouse? More like "where"-house, amirite? Sorry...
What do the LMI and the Kansas City Chiefs have in common? They both suck now. For the first time in the 9-year history of the Logistics Managers Index, warehousing utilization actually contracted:
- LMI Warehousing Utilization: 47.5 (down 9 points)
- Upstream (wholesalers): 44.2
- Downstream (retailers): 55.6
For months, wholesalers have been holding the bag on upstream inventory while waiting for someone downstream to take it off their hands.
This holiday season, that handoff is finally happening. Not because demand is booming, but because no one wants to carry the costs into the new year
Who got you smiling like that?
Despite all this, manufacturers appear weirdly optimistic. They’re hiring. They’re talking about growth. It’s like everyone got a little too into the “soft landing” narrative and forgot to check the scoreboard.
- The hiring pace in manufacturing is the strongest it’s been in three months.
- The Philly Fed’s six-month outlook just made a 50-point swing, from mildly negative to aggressively positive.
- Even Richmond, which has been in the red all year, seems to have found something to be optimistic about.
Everyone’s still banking on 2026 to bring lower rates, policy clarity, and consumer re-engagement. Denial is cheaper than therapy.
Trailer trends
The holiday season gave reefer a boost as America quite literally ate its feelings. Dry van and flatbed weren’t as lucky:
- Reefer Volumes: +9% YoY
- Dry Van Volumes: -16% YoY in early November
- Flatbed: Flat. Again.
Even in a “stronger” market, it’s still just one segment carrying the weight while the rest nap through Q4.
The spot rate mirage
Dry van rates are technically rising. But adjust for inflation and… oop, never mind:
- Dry Van Spot Rates: +2.5% nominal, +0.4% in real dollars
- Compared to 2019: +$0.24/mi in face value, -$0.18/mi in purchasing power
- Inflation-adjusted rates: Down ~10% across all modes
So if you’re feeling like you’re working harder for less, you are.
School's out for new drivers
If you’re looking for relief from the supply side, don’t. At least not anytime soon.
- The DOT is yanking accreditation from 3,000 CDL schools, with another 4,500 on notice.
- That’s nearly half the training pipeline at risk.
- Attrition rates for new drivers are still topping 90%.
We’re not running out of trucks, but we may eventually run out of qualified people to drive them if this trend keeps up.
The Fed's rearview mirror policy
October’s government shutdown erased key data points:
- No CPI
- No PPI
- No October jobs report
Industrial production for both October and November won’t be released until after the Fed’s December meeting, so the Fed is making policy decisions based on old data and internal guesswork. That wouldn’t be so bad if those guesses weren’t all over the map.
19 Fed officials now have 11 different views on where rates should land. That’s not clarity. That’s how it feels when you ask your coworkers where they want to go for lunch.
And that uncertainty is contagious. Nobody’s investing. Nobody’s restocking. Like a middle school dance, everyone’s waiting for someone else to move first.
We're right back where we started
The setup for a 2026 recovery is still in place. December didn’t break that view, but it didn’t improve it either. The risk now is that production cuts finally catch up to the soft order book, extending freight weakness into Q1.
Valentine’s Day remains the earliest realistic inflection point. Until then, the market will keep drifting: rejections ticking up for seasonal reasons, rates hovering just high enough to hold capacity, and volumes slowly sliding through January.
