On the Front
Category: LTL Market Trends
The recent load to truck ratio hit a two-year high indicating further that TL capacity is tightening up. As we've mentioned before, the DAT Solutions metric is a good indicator of the state of the market. If you explore the trendlines in more detail you can find certain markets that are tougher than others - like outbound Texas. http://www.dat.com/resources/trendlines/van/demand-and-capacity We are also noticing a very strong change in direction from the LTL carriers. You may recall in our last post we mentioned increases are being requested at higher %'s, which is a clear indication pricing power has shifted. In addition - they are getting far smarter in what they are handling and making it clear that there is certain freight they will not handle at a cheap price. I met with a large, national LTL carrier at their headquarters just last week. They told me they are handling around 50,000 shipments a day and are not looking to increase that number.
As 2017 progresses, we continue to see more signs of aggressive price increases within the LTL market. Carriers have invested a significant amount of money implementing new technology to ensure all shipments moving through their terminals are priced accurately which can translate into reweighs and reclassifications for shippers. According to multiple national LTL carrier sources, capacity is tightening rapidly and many are looking to implement “take it or leave it” increases upwards of 20+%. This is a sure sign the economy is changing and price increases are not going away anytime soon. Recently a carrier rep told us their president mandated a 20% increase in revenue per bill and instructed reps to walk away from bad business. Another mentioned they are pushing for a 91% OR (operating ratio) no matter what it takes. Last year, according to YRC CEO James Welch, he said ”Our contractual pricing has continued to increase between 3 and 5 percent. We’re going to continue