August 2025 Freight Market: A Collision of Forces

A Freight Market Navigates a Complex August

August 2025 freight rates saw a typical seasonal slip after a strong peak in July, with van and flatbed rates showing month-over-month declines. However, a deeper analysis of the month's data reveals a market in a state of flux, driven by two powerful, opposing forces. On one hand, a sharp decline in international import volumes, triggered by new, sweeping U.S. tariffs and the end of the `de minimis` exemption, flooded the domestic market with excess truck capacity, putting downward pressure on spot rates. On the other hand, a new federal regulation—the enforcement of the English proficiency test for commercial drivers—began to tighten the domestic driver pool, creating a counter-pressure that prevented a more significant rate collapse. The result is a nuanced market environment, under pressure from reduced demand but with a structural tightening of supply that may lay the foundation for future rate momentum.

August 2025 in the Numbers: A Mid-Year Dip

The freight market's mid-year performance, as reflected in the latest data, shows a clear deceleration from the prior month. Following a strong July, August saw a pullback in average per-mile rates for several key equipment types. This is not an unusual pattern, as similar dips have been observed in past years, but the reasons for this year's particular trend are layered in macro-economic and regulatory shifts.

Van & Flatbed Rates Feel the Gravity

The most significant changes were seen in the core dry van and flatbed segments. Van rates slipped by seven cents, representing a 3.0% decline month-over-month, returning to the rate of $2.26 per mile seen in June. Similarly, flatbed rates fell by 2.2% month-over-month to an average of $2.69 per mile. The decline in flatbed rates is typical for this time of year as demand from the construction season begins to slow down.

While the month-over-month slip for van and flatbed freight might seem like a cause for concern, it is important to place these numbers in a broader context. A year-over-year comparison paints a more optimistic picture. Both van and flatbed shipments saw a small but positive increase of 2.3% compared to August 2024. This long-term trend of mild improvement suggests that the market, despite its recent volatility, is not in a state of significant deterioration but rather an ongoing, albeit slow, recovery from the 'freight recession' that began in early 2023.

Reefer & The Conestoga Contradiction

The refrigerated freight market displayed remarkable stability, with rates remaining virtually unchanged from July to August, decreasing by a minimal 0.4%. This consistency is supported by a stable demand for perishable goods. A closer look at the data, however, reveals a subtle but meaningful shift in the reefer segment. The average length of haul for refrigerated shipments declined from 959 miles to 939 miles. This decrease is not a random data point but an indicator of a change in shipping patterns. It likely signals that produce from states like Colorado and Utah is beginning to enter the supply chain as a larger percentage of total shipments, which typically involves shorter, more regional hauls.

An even more striking anomaly is found in the specialized flatbed segment. While RGN and Step Deck rates saw modest declines, and standard flatbed rates slipped, Conestoga rates unexpectedly climbed by 4.6% month-over-month. This unique performance warrants a closer look. Conestogas are specialized trailers with a retractable tarp system, often used for high-value or weather-sensitive cargo that requires protection but cannot be loaded into a standard van. The recent surge in their rates, while other flatbed types softened, is directly related to the new, expansive U.S. tariffs. New tariffs on core commodities such as steel, aluminum, and copper became effective in August. As importers and domestic manufacturers adjusted their supply chains in response to these new cost structures, a disproportionate and isolated surge in demand for the transport of these sensitive, high-value materials occurred. This surge was strong enough to counteract the general market dip and was concentrated in a specialized segment with less available capacity, creating an isolated rate spike.

Broker Margins & Market Health

Despite the downward trend in per-mile rates, the data indicates that broker profitability on van freight increased slightly, with margins rising from 13.8% in July to 14.1% in August. This suggests that while market conditions for carriers may have softened slightly, the spread between the sell rate and the buy rate for brokers remained constant, allowing for a modest increase in profitability. The proprietary data itself states that these numbers show "no strong signal of deterioration of the spot freight marketplace". This reinforces the idea that the market is in a delicate balance, and that the decline in rates is more a product of external factors than an overall collapse in freight demand.

The Macro Story: The Two-Sided Market of August

The numbers from August 2025 cannot be fully understood in isolation. They are a direct reflection of powerful, competing macroeconomic and regulatory events that unfolded throughout the month. The tug-of-war between a decrease in demand driven by trade policy and a tightening of supply due to new labor regulations defines the August market.

The Tariff Tsunami & De Minimis Crackdown

A central reason for the softness in August freight rates is the sharp decline in international shipment volumes. The data shows a significant "nose-dive" in the count of international shipments, which fell by 31.0% from July to August. This is not a coincidence; it is a direct consequence of a "sweeping U.S. trade-policy shift" that began in August. New tariffs, effective August 1, raised the duty rate on non-USMCA goods from Canada from 25% to 35% and imposed a universal 50% tariff on copper. Additionally, new levies were placed on goods from Brazil, India, and other trading partners.

The most significant policy change, however, was the suspension of the `de minimis` exemption for all countries, effective August 29, 2025. This rule, which previously allowed non-postal shipments under a certain value to enter the U.S. duty-free, was a game-changer. Its suspension made all such shipments fully dutiable, fundamentally altering the cost structure for importers. The immediate impact of these policies is evident in external reports, which show that U.S. tariff revenue surged to a record $30 billion in August, the highest monthly total for 2025. This proves the policies are having a massive, immediate financial impact on importers and their supply chains.

The decline in international volumes had a direct ripple effect on the domestic freight market. Many importers, anticipating the new tariffs, engaged in a process known as `frontloading`—pulling volumes forward into the supply chain in July to beat the August deadlines. This explains the strong July numbers and the subsequent softness in August. The decrease in import volumes meant that trucks and drivers who would normally be occupied with port-to-warehouse movements were suddenly available for the domestic spot market. This surplus of capacity in the domestic market inevitably created downward pressure on rates, as more trucks became available to chase fewer international-origin loads.

The Driver Paradox: Capacity Tightens Despite Soft Demand

While declining import volumes exerted downward pressure on rates, a powerful countervailing force prevented a more severe collapse: the ongoing tightening of domestic truck capacity. A new regulatory change, the enforcement of the FMCSA's English Language Proficiency (ELP) rule, became effective in late June 2025. This rule allows a law enforcement officer to place a driver "out of service" for failing a simple two-part test on roadside signs and basic communication. This new rule adds a significant layer of regulatory risk and potential for driver attrition, which is explicitly noted in the August data as having a "tightening impact on capacity".

This new regulation exacerbates an existing, long-term structural problem in the industry. Despite softer freight demand, the driver shortage has not disappeared; it has simply shifted. The industry continues to face challenges from experienced drivers retiring, a lack of new entrants into long-haul roles, and a high rate of driver turnover. Hundreds of thousands of new CDLs are earned each year, but attrition makes it difficult for the driver pool to grow meaningfully. The paradox is that even in a cooling market, driver wages are forecasted to climb in 2025, with an expected increase of 2.7% for for-hire carriers, because the supply of qualified labor is so fundamentally constrained. The new English proficiency test simply adds a new and significant source of churn to this fragile labor market.

Strategic Implications: What This Means for Your Business

The August market, defined by these powerful, competing forces, demands a strategic response from both freight brokers and commercial motor carriers. The traditional approaches of focusing solely on rates or chasing volume will not be sufficient in this new, complex environment.

For Freight Brokers: Navigate the Narrowing Gap

The slight increase in van broker margins to 14.1% is an opportunity, but it is a fragile one. In a market with a surplus of trucks but a tightening supply of qualified drivers, the key to success is shifting from a pure rate-focused strategy to a capacity-sourcing one. The ability to source and retain reliable, vetted carrier capacity will be a key differentiator. Brokers who have strong relationships with compliant carriers—those not at risk of costly out-of-service orders from the new English proficiency test—will hold a significant competitive advantage. The focus should be on building a network of high-quality partners by providing value beyond just the load, such as offering predictable routes, fair compensation, and efficient payment processes. This will attract the best carriers who, as reports suggest, are now more focused on home time, predictability, and a good work environment than on sign-on bonuses.

For Motor Carriers: Adapt and Comply for a Competitive Edge

For motor carriers, the soft market is not a signal of defeat but an opportunity to invest in their business and position themselves for the future. While rates have softened, the underlying labor dynamics are working in their favor. The persistent driver shortage and forecasted wage increases mean that the supply side of the market is becoming more powerful. The new English proficiency test is not just a regulatory hurdle; it is a business risk that can lead to fines and out-of-service orders. Carriers must be proactive, ensuring their drivers are compliant to avoid these costly disruptions. The carriers who can demonstrate a reliable, compliant, and qualified driver pool will be in the best position to secure premium freight from brokers and shippers who are struggling to find capacity they can trust. This is the moment for carriers to move from being a commodity service to a value-add partner, one that prioritizes safety, compliance, and driver retention to secure better rates and more stable business.

Conclusion: A Glimmer of Hope for Q4?

The freight market in August 2025 was not simply a downturn; it was a delicate equilibrium shaped by a tug-of-war between two powerful forces: a drop in demand from global trade shifts and a structural tightening of supply from domestic labor regulations. The tariff-driven slowdown in international volumes explained the month-over-month rate softness and the temporary surplus of domestic capacity. At the same time, the new English proficiency test and the ongoing driver shortage worked as a floor, preventing a more severe rate collapse.

The key question for the fourth quarter is which of these forces will gain the upper hand. Will domestic freight volume eventually replace the lost import volumes? Will the new ELP test and ongoing driver attrition continue to thin the driver pool? The analysis suggests that while the market remains volatile, the structural tightening of capacity may create a foundation for a stronger, more resilient rate environment in the coming months, especially for those in the industry who are prepared to adapt to these new realities.