Annual Review & Outlook 2025 Surface Transportation
Elevated expectations
LTL carriers expanding networks to prepare for long-term growth
By William B . Cassidy
The big picture : US less-than-truckload ( LTL ) carriers are preparing for the next surge in demand , adding terminals and terminal doors even though freight demand is still tepid . They see demand for industrial freight and retail goods increasing in 2025 and believe there ’ s not enough LTL capacity in the market to meet that demand . LTL rates began rising in 2023 and remain elevated , and that ’ s unlikely to change in 2025 , with carriers seeking additional price hikes in the mid- to high-single-digit percentage range .
US LTL carriers issued general rate increases ranging from 4.9 % to 7.9 % in Q4 . Karolis Kavolelis / Shutterstock . com flowing more efficiently through expanded networks . As larger carriers built out those networks and created denser freight lanes , smaller carriers felt pressure to acquire other companies to remain competitive . And the LTL sector will be increasingly competitive in 2025 , with overall capacity still lower than it was in 2022 . With the pool of industrial freight still limited , LTL providers will look to diversify through the addition of premium services . They will increasingly target smaller shippers typically served by third-party logistics providers . Changes to the National Motor Freight Classification , the basis for much of LTL pricing , expected in May will challenge smaller shippers , making awareness of shipment dimensions and weight even more critical .
A look back : Yellow ’ s shutdown in July 2023 unleashed an LTL shakeup that is still working its way through the market . It took most of 2024 for the 50,000 or so daily shipments handled by Yellow to find a new carrier , often a pricier one . Yellow auctioned off more than half of its terminals in 2023 and 2024 , but 112 terminals remained to be sold in the fourth quarter . That spurred a realignment among the top LTL carriers . In October , LTL all-inclusive selling prices were more than 5 % higher than in July 2023 , prior to Yellow ’ s abrupt exit , according to the US Bureau of Labor Statistics long-haul LTL producer price index ( PPI ). The LTL PPI was down 0.4 % year over year in October , but those PPI selling prices , which include surcharges and other fees , were up 31 % from December 2019 . LTL carriers not only added terminals and equipment in 2024 but technology , too , as they strove to become more efficient , improve service and reach more customers ahead of the next wave of industrial freight .
A look ahead : Although volumes settled in the second half of 2024 , a year after Yellow ’ s shutdown , LTL executives remain optimistic about 2025 . Their terminals were busy in the run-up to the holiday season and freight was
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The next inflection : The LTL sector will try to hold its ground on pricing until improvements in US manufacturing lift demand . In the fourth quarter , LTL providers issued general rate increases ranging from 4.9 % to 7.9 %. The first quarter is historically slow for LTL freight but any pull-forward in imports to avoid an early Lunar New Year , an East and Gulf coast port strike and potential tariffs from the new Trump administration could create additional demand . LTL carriers hope lower US interest rates and capital costs will pull US manufacturing out of contraction and generate more consistent volumes by mid-2025 .
email : bill . cassidy @ spglobal . com
US LTL pricing slips yoy for first time in 10 months in October
US long-haul less-than-truckload ( LTL ) producer price index ( PPI )
245
240 238 180
235
230
225 L Jan 2023 Jul Jan 2024
Jul
LTL PPI
Notes : US BLS producer price indices are based on selling prices for trucking services
Source : US Bureau of Labor Statistics data , JOC analysis
Oct , 2024
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January 6 , 2025 | Journal of Commerce 65