Freight transportation services index

The Freight Transportation Services Index is forecast to grow 2.7% in 2026, supported by stronger demand for US-based freight services. China's commitments to resume purchases of US soybeans and interim agreements with India to increase imports of US energy and metals will give exporters additional markets to serve, offsetting some of the drag from stubborn inflation and tariff-related cost pressures. The Administration is expected to introduce softer but still meaningful tariffs after an adverse Supreme Court ruling, keeping policy tensions elevated. At the same time, the start of the Iran conflict and a temporary closure of the Strait of Hormuz will disrupt global energy flows and trigger sharp price swings, but US gas producers will have opportunities to redirect exports to affected markets, as occurred during the Ukraine war. While the TSI excludes international waterborne trade, increased use of US pipelines and related domestic freight movements will still lift the index by expanding underlying logistics activity.

From 2021 to 2026, the TSI has shown slow, steady growth, tracking overall US economic activity with a slightly lower growth trajectory. The index corresponds to a compound annual growth rate of 1.1%. Economic recovery in 2021 was mirrored in the index as the US emerged from pandemic disruptions. However, momentum waned, with near-flat performance in 2023 (up 0.2%) and a mild contraction in 2024 (down 0.3%). This stagnation reflects a broader economic shift from goods to services, reducing freight transportation demand. High inflation and interest rates further limited consumer spending on tangible goods, suppressing freight activity. Evolving fuel prices influenced costs and freight rates, while technological innovations and infrastructure developments provided incremental efficiency gains, offset by subdued economic growth and regulatory uncertainties.

Macroeconomic trends, including industrial production, consumer spending, and labor market conditions, have influenced freight volumes. While consumer sentiment improved post-pandemic, it remained below pre-crisis levels, limiting robust freight demand growth. Although supply chain constraints eased, they did not fully offset weaker demand from restrictive monetary policy and persistent inflation. The Freight Transportation Services Index (TSI) rose in 2025, reflecting a growth rate of 3.2% over the previous year. This moderate recovery comes after a period of stagnation from 2023 to 2024, known as a "freight recession." Although inflationary pressures and high interest rates continue to constrain goods movement, improvements in consumer sentiment and increased imports due to tariffs on China, Canada, and Mexico provide some support to freight demand. Operational costs remain sensitive to fuel price fluctuations, and the broader economic environment dampens freight volumes. Over the five years to 2026, the TSI's performance highlights the sector's sensitivity to cyclical economic drivers and shifts toward a service-oriented economy. Despite periodic fluctuations, the index maintained low volatility, aligning with overall economic output and demonstrating the industry's connection to macroeconomic developments.