Tucker Blog

Friday, July 30, 2010

LTL Carriers Seek Higher Prices/Rates

While a swift recovery is occurring in intermodal, ocean and truckload freight, the plights of many LTL carriers are still poor. FedEx Freight is now the nation’s leading LTL carrier in terms of market share, and paid a steep price in profitability. FedEx Freight’s fiscal year ended in May and saw a loss of $153 million—far worse than their loss the year before.

FedEx Freight, like Con-Way and other rivals to former market share leader, YRC Worldwide heavily discounted freight rates to woo shippers away from YRC. Both the LTL carriers and industry analysts are warning shippers that LTL freight rates must go up. If they aren’t happening already, shippers should expect emails, phone calls and knocks on their doors from their LTL carrier sales representatives, looking to talk.

As we’ve seen before, when markets improve, carriers—LTL and otherwise—begin to shed unprofitable customers, for better profitability and equipment utilization. It is happening in the truckload industry, and as always, LTL isn’t far behind.