Chicago Freight Market Tightens Unexpectedly
This week’s Redwood Rundown began with what felt like a familiar refrain: not much happening. Freight volumes remained soft, capacity continued to exit the market, and outside of a few bright spots. Until Chicago changed the narrative.
A Surprising Shift in Chicago
Anyone attempting to move freight out of the Chicago market this week likely noticed a significant shift. The market tightened—unexpectedly and sharply. And that caught our attention. At Redwood, we’ve developed a strong sense of timing for when regional markets like Chicago typically heat up. Mid-August isn’t usually one of those times. Especially not in a demand environment this weak. To put it in perspective, demand is currently sitting below 2019 levels. The Cass Freight Index has now shown 30 consecutive months of contraction. Under those conditions, a market tightening like this one is not something we’d anticipate.
What’s Driving the Tightness?
So what’s going on? Our analysis points to a surge of freight entering the U.S. through Southern California ports, which is now making its way inland—specifically into the Chicago freight network. Chicago plays a critical role in the national supply chain. Once freight arrives there, it’s redistributed across the Midwest, reaching as far as Pittsburgh, Kentucky, and beyond. It’s a dominant hub, and when it gets busy, the ripple effects are widespread.
We turned to Sonar to validate what we were seeing on the ground. Looking at the total inbound loaded rail containers—tracked under the “I RAIL” index (with two Ls)—we found that August volumes are at their highest level ever recorded in Sonar’s dataset.
That’s a clear signal: freight is flowing into Chicago at an unprecedented rate for this time of year.
Capacity Is Being Pulled Away
As this freight arrives, sleeper cabs are being deployed to handle the volume. These trucks are running routes to Green Bay, Indianapolis, and other regional destinations, then looping back to repeat the cycle. They’re following the freight—and the revenue.
This shift is pulling capacity away from the local Chicago market. As a result, freight that was easy to move just a week ago has suddenly become much more difficult to cover.
While the broader freight market remains soft, regional dynamics like what we’re seeing in Chicago can still create volatility. The combination of inbound rail volume and strategic carrier behavior is reshaping capacity in real time.
We’ll continue monitoring the data and sharing insights to help you stay ahead of the curve.
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