How is the Logistics Industry Doing These Days?
It’s doing well, according to the 34th annual project of the Council of Supply Chain Management Professionals (CSCMP), which reported on the state of LTL in their 2023 State of Logistics Report.
What's holding LTL steady?
While there has been a recent freight slow-down with fewer goods shipped, LTL leaders’ newfound dimensional pricing discipline has made for relatively steady revenue since many carriers now base charges on cube–not freight classification.
Some of the largest LTL carriers continue to face headwinds.
For April 2023, the third-largest U.S. LTL carrier, Yellow, received between 1% to 2% rate increases on contract freight for accounts that ended that month. Year-to-date contractual renewals average between 2% to 3%—compared with year-ago increases averaging greater than 10%. The company reportedly faces relentless cost increases in nearly every category except fuel. Contractual labor raises for its approximately 22,000 Teamsters employees is in the 5% range year over year. Yellow is also trying to eliminate redundancy by selling excess terminals. And as of July 31, Yellow has shuttered its operations and filed for bankruptcy.
And at Old Dominion Freight Line (ODFL)–the nation’s 2nd-largest and most profitable LTL carrier– first-quarter tonnage per day dropped nearly 12% year over year in the first quarter. ODFL executives acknowledged on an earnings call that the freight bounce-back the carrier expected in the current quarter was illusionary.
On the plus side, new LTL carriers are adding capacity.
Knight-Swift Transportation Holdings, parent of the largest U.S. truckload carrier, plans to add 11 LTL terminals soon, according to an earnings presentation. (Knight-Swift also recently bought two mid-sized Midwestern LTL carriers: Midwest Motor Express and AAA Cooper.) LTL providers Saia and XPO have added terminals recently as part of strategic growth.
These are complex times for shippers. If you’re trying to navigate recent or upcoming changes to U.S. LTL capacity, it’s wise to turn to the experts.
Nexterus specializes in managing LTL freight for small to medium-sized shippers. Nexterus contracts with major LTL carriers to keep your freight moving. Our network is filled with quality carriers that meet our stringent KPIs so that your freight will arrive on time, in the best condition, at the right location, for the best price. To get started working with Nexterus, contact us today.