Ample capacity, moderate rate increases for LTL shippers

Extended freight recession

The less than truckload (LTL) industry continues to operate in an environment that many carriers now describe as an extended freight recession. A prolonged slowdown in the industrial and manufacturing sectors remains one of the largest contributors, as these segments historically drive a significant share of LTL demand.

Consumer-driven freight has been more stable but not strong enough to offset the decline in industrial activity, resulting in muted overall delivery growth. Adding further pressure, carriers report a continued drop in average weight per delivery, which affects their revenue. Seasonal patterns are also at play, with the typical fourth-quarter slowdown dampening volumes just as carriers work to maintain profitability.

Excess capacity continues

Excess capacity across LTL networks is pushing carriers to concentrate on improving trailer utilisation, managing density more tightly and scrutinising operational efficiency across every part of the business. They’re investing heavily in technology and AI to optimise routeing. These efforts reflect a broader goal to strengthen long-term margins and ensure that they can handle more volume efficiently when demand improves. In the meantime, most carriers have resisted aggressive discounting in light of rising labour, equipment and maintenance costs.

Pricing up moderately

Despite soft tonnage and excess capacity, most carriers have been increasing pricing moderately. Their cost controls and network optimisation have been able to keep the cost increases competitive for shippers, who may also benefit from improved service from this optimisation. For shippers who’ve been using the same carriers for some time, it may be worth looking into other carriers that may now be servicing new lanes or doing so at higher service levels.

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