The fourth quarter edition of the U.S. Bank Freight Payment Index, which was released today, showed gains and declines, for freight shipments and expenditures, to varying degrees. This report, which was initially launched in the third quarter of 2017, is comprised of data on freight shipping volumes and spend on both a national and regional basis. The report’s data is based on the actual transaction payment date, highest-volume domestic freight modes of truckload and less-than-truckload and is seasonally- and calendar-adjusted. Its historical data goes back to 2010, with a base point of 100, and its index point for each subsequent quarter marks that quarter’s volume in relation to the preceding quarter. U.S. Bank Freight Payment's business processes more than $43 billion in annual freight payments for some of the world’s largest corporations and government agencies. The report’s first quarter shipment index value, at 76.1, increased 1.5% compared to the fourth quarter, which was down 2.9% annually, and fell 4.9% annually. The report explained that while this sequential improvement is notable, freight volumes remained at historically subdued levels, adding that the annual decline highlights persistent challenges in the freight market for both motor carriers and shippers. And for all of 2025, the shipment index fell 9.9% annually compared to the 2024 average when adjusted for the year—and was still less than half of the 20.4% decline in 2024. And on a regional basis, shipments saw: a 1.3% sequential decline and a 5.4% annual gain in the Western U.S.; a 3.5% sequential gain and a 3.3% annual decline in the Midwest; a 4.2% sequential increase and a 12.1% annual increase in the Northeast; a 5.4% sequential increase and a 25.4% annual decrease in the Southwest; and a 2.4% sequential decline and a 5.9% annual decline in the Southeast. As for spending, the second quarter spend index value, at 191.9, was up 4.6% sequentially and up 5.2% annually, its first annual gain in three years. This marked the third straight quarterly increase, with the report observing that it serves as an indication that shippers are incurring higher costs to move only slightly greater freight volumes. “Despite uneven shipment volumes, fourth quarter spending rose nearly everywhere, driven mainly by higher freight rates,” the report noted. “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.” Spend data largely showed gains on a regional basis, including: West, up 2.6% sequentially, and up 9.4% annually; Southwest, up 12.6% sequentially, and up 16.8% annually; Midwest, up 5.0% sequentially, and up 0.1% annually; Northeast, up 5.5% sequentially, and up 16.7% annually; and Southeast, up 0.7% sequentially, and down 1.3% annually. Bobby Holland, U.S. Bank director of freight business analytics, said that 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,” he said. “Between fleet exits and carriers reducing their rosters, the industry is feeling the effects of prolonged contraction.” American Trucking Associations Chief Economist and the report’s lead author Bob Costello wrote in the report that in the last quarter of 2025, the national freight market experienced a slight uptick in shipment levels, but industry capacity continued to contract as shipper spending reached its highest point since early 2024. “Capacity in the freight market declined further, driven by several factors,” wrote Costello. “Prolonged market downturns led to reduced rates, prompting carriers to downsize fleets and decrease the number of independent contractors. The year also saw a decrease in the total number of carriers operating. Stricter government regulations and enforcement, including tougher English Language Proficiency standards, removed thousands of drivers from service. The Department of Transportation (DOT) temporarily paused the issuance of non-domiciled commercial driver’s licenses (CDLs) to certain non-citizens and non-permanent 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. Overall, industry capacity contracted in Q4 driving up 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.”

Executive Order establishes a Maritime Action Plan

In April 2025 President Donald Trump signed an Executive Order titled "Restoring America’s Maritime Dominance" that mandates the creation of a Maritime Action Plan (MAP). The MAP is intended to lay out a strategy with concrete steps to restore and sustain resilience in the U.S. maritime sector and to revitalize American shipbuilding.

Primary objectives of the Maritime Action Plan

The MAP is designed to provide a structured set of actions aimed at re-establishing U.S. maritime leadership, strengthening commercial and military shipbuilding, and ensuring long-term industrial capacity and workforce development within the maritime trades.

White House rationale on procurement and regulation

The Executive Order asserts that government procurement practices and excessive regulation have impeded private industry from delivering vessels on schedule and on budget. The administration framed the MAP as reversing that trend and improving conditions for domestic ship construction.

Proposed infrastructure fee on foreign-built commercial vessels

The MAP calls for a universal infrastructure or security fee assessed on foreign-built commercial vessels that call at U.S. ports. The fee would be based on the tonnage or weight of imported cargo carried by each vessel, with projected revenue directed into a new Maritime Security Trust Fund to support shipbuilding capacity, fleet expansion, and maritime workforce development.

• An assessment of $0.01 per kilogram of imported cargo is estimated to generate roughly $66 billion over a 10-year period
• An assessment of $0.25 per kilogram is estimated to generate roughly $1.5 trillion over the same 10-year period

Land port maintenance tax proposal

The MAP also proposes a land port maintenance tax to ensure that land border ports contribute more equitably to trade infrastructure costs. The proposal would assess 0.125% of the value of merchandise entering the United States through land ports of entry with Mexico and Canada.

Proceeds from this land port tax would be placed into a Land Port Maintenance Fund to be used for port planning, construction, maintenance and improvements.

Context from the State of the Union

The White House referenced President Trump’s recent State of the Union address in support of the MAP. In that speech the president pledged to "resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding." He added,

"We used to make so many ships. We don’t make them anymore very much, but we’re going to make them very fast, very soon. It will have a huge impact."

Expert reaction from John D. McCown

John D. McCown, a Non-Resident Senior Fellow at the Center for Maritime Strategy, the Navy League’s think tank, told LM that the United States already has a strong shipbuilding sector in specific niches that should be leveraged and expanded.

"I think we ought to build on that," McCown said. "The higher end you go, the more effective we are…and layer that on top of everything going on, whether it is molten sulfur, atomic plants, automation, or AI—things which the U.S. should be leading. I embrace all of that but where it [MAP] got a little confusing to me are the fees. There are certain aspects of this that are kind of a redo of what the USTR had proposed. But this is broader and does not really just affect China. If you are doing this to build the maritime base, you need to be clear in stating that."

Support for mariner training and academy capacity

McCown welcomed the MAP’s emphasis on expanding mariner training, including increased focus on the U.S. Merchant Marine Academy. He described that expansion as a critical need and said a priority should be placed on operating vessels that provide positions for crew and staff graduating from U.S. Merchant Marine academies.

Overview of the February report

The Logistics Manager’s Index (LMI) for February registered 61.5, an increase of 1.9% from January’s 59.6. That reading represents the fastest pace of expansion since February 2025 and ended an 11-month run of readings below the long-term average of 61.3.

The report links rising freight costs and tighter transportation capacity to leaner inventories and other market pressures.

Who produced the LMI

The monthly LMI is produced by researchers from Arizona State University, Colorado State University, the University of Nevada, Reno, Florida Atlantic University, and Rutgers University, with support from the Council of Supply Management Professionals (CSCMP).

The current edition was authored by Zac Rogers, Ph.D., Steven Carnovale, Ph.D., Shen Yeniyurt, Ph.D., Ron Lembke, Ph.D., and Dale Rogers, Ph.D.

What the LMI measures

The headline LMI score is composed from eight distinct logistics components. Those components cover inventory, warehousing, and transportation by both levels and cost or utilization.

• Inventory levels
• Inventory costs
• Warehousing capacity
• Warehousing utilization
• Warehousing prices
• Transportation capacity
• Transportation utilization
• Transportation prices

February results in context

The February reading of 61.5 improved on January’s 59.6 and is the quickest monthly expansion since the 62.8 recorded in February 2025. The rise also broke an extended period in which monthly LMI readings sat below the historic average of 61.3.

Authors emphasize that shifts in inventory strategy and asset use are central to recent movements in the index.

Detailed sub-index movements and comparisons

The report highlights year-over-year shifts between February 2025 and February 2026 across several sub-indexes:

• Inventory levels: fell from 64.8 in February 2025 to 53.8 in February 2026 as firms moved to leaner stock positions.
• Inventory costs: eased from 77.3 in 2025 to 67.8 in 2026, reflecting the inventory reduction.
• Warehousing prices: rose strongly in 2025 to 77.0 because of higher stocks, and remained elevated in 2026 at 62.6.
• Transportation capacity: tightened in 2026, with a 41.0 reading versus 55.1 in 2025, indicating reduced available capacity.
• Transportation prices: jumped to 76.7 in 2026 from 65.5 in 2025, driven by higher inventory turnover and more frequent shipments.

Drivers of uncertainty and cost pressure

The authors point to several ongoing forces increasing supply chain uncertainty and inflationary pressure, including conflict in Iran, higher fuel prices, and the lingering effects of tariffs. These factors have encouraged firms to change inventory approaches and affected demand for transport and warehousing capacity.

As inventories were reduced to avoid tariff exposure, pressure shifted to other logistics assets, tightening capacity and pushing up prices across transportation and warehousing.

Authors' outlook on adaptation and risk

The report notes that firms have markedly changed strategies and asset use with the common aim of optimizing cash flow. Researchers describe the sector’s adaptations as notable given the uncertainties caused by tariffs.

They also observe that a recent U.S. Supreme Court ruling is likely to prolong that uncertainty through 2026, and the team intends to continue monitoring how these legal and market shifts affect logistics activity.