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There has been a lot of movement in the LTL industry lately, and the following are excerpts from a recent report issued by the TransImpact Carrier Management Team that is of interest to all freight shippers.

A top 5 LTL carrier implementing a $1,000 surcharge on any order 8’ or larger is highly indicative of the state of the LTL market. Over the last 18 months, the global supply chain spotlight has been placed on ocean freight, the North American spotlight has been on ocean freight and Full Truckload, while LTL networks have only made sporadic headlines. But, this surcharge is important news because it is a clear decision by Old Dominion to purge overlength freight from its network and should serve as a reminder that all modes of transport are connected, and what impacts one will impart shifts in the others.

Here are other ways LTL has evolved over the last year and a half. All are direct results of the new market conditions and are still developing.

  • Carriers are maintaining a reluctance to bid on non-incumbent opportunities with a heavy percentage of overlength/non-standard articles. Old Dominion may be the first to levy this kind of surcharge, but we would expect others to follow to varying degrees.
  • Yellow (YRC, New Penn, Reddaway, Holland) is tightening how they screen new accounts and specifically targeting credit and potential cash-flow risks.
  • The trend to abolish “Guaranteed Shipments” from most carrier networks is continuing. These shipments still exist and still demand a premium, but they are rarely truly guaranteed. The premiums paid do more to prioritize a shipment to ensure it will move while other “Standard” service shipments remain stationary.
  • Some carriers are instituting periodic local embargoes to manage capacity shortages within their networks.
  • Southeastern Freight Lines (for example) completely shut down new opportunities beginning Q2 2020. Recently, they began opening to new business, but on a limited basis.
  • New surcharges are being created by many carriers as ways to recover some of the additional costs they are facing without having to ask for mid-year increases.
  • The annual carrier rate increases have been extreme. 16% is the highest, with the average being 7-8% (the 2017-2019 average was 5-5.5%).

The list goes on – market conditions are still tightening. We’re predicting this kind of volatility will continue through 2022 and into 2023 while the international shipping markets and US port situation find equilibrium. When those markets eventually stabilize, the FTL and LTL markets will only then find their “new normal” position.

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