LTL Freight

Will there be Major Changes with the LTL Market?

Charles Popick Newsletter

The LTL market has regained its health. Carriers are applying pricing discipline and resist the urge to expand capacity beyond fulfilling immediate shipper needs.The top three spots include FedEx Fright, XPO Logistics and Old Dominion, all non-unionized carriers. All three have seen a slight improvement in Operating Revenue ratios and increased earnings. The three carriers have forecasted improved forward earnings, optimistic about the future with continued improving net income and continued efficiencies and business acquisition. Many leaders in these companies are optimistic as they review their KPIs; Wayne Spain, president and COO of Averitt Express said, "There is reasonable consistent growth in 2017." Brad Jacobs, chairman and CEO of XPO Logistics, says that he's "actually encouraged" by the overall national economic picture. "Both demand and yields have been good," he says. "The pricing environment is rational and the industrial recession that had been impacting U.S. manufacturers has been showing some signs of improvement." Further, The ATA trade group mentions freight volume will grow 2.8 percent in 2017, and will then growth will accelerate to 3.4 percent annually through 2023 however; expectations for LTL rates are currently divided by a survey of 14,000 shippers and brokers. 43% expect a slight increase while 43% are forecasting flat LTL pricing. The remaining top ten carriers are also are showing improved results, YRC coming out of tough times with an higher than average operating ratio of 98.2% however, showing continued improved net income results in 2016 and optimistic expectations for continued improvement for 2017.

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