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US LTL carriers widen market reach through spot pricing technology

By Eric Johnson

Dynamic pricing tools are allowing less-than-truckload ( LTL ) shippers and brokers , especially smaller ones , to connect with LTL carriers looking for new sources of freight . This is widening the market reach for LTL carriers that have typically relied almost exclusively on contracts or general tariff rates for pricing .

The incremental shift toward more spot pricing in the LTL market speaks less to titanic change in how shippers are procuring than it does about there being easier paths for certain LTL carriers to reach shippers directly .

While the vast majority of LTL freight continues to move on shipper-specific contract pricing or more general pricing often used by brokers , there is an uptick in spot , or transactional , pricing in the LTL market , sources tell the Journal of Commerce .

Some attribute this uptick primarily to the currently soft LTL market , with regular customers seeking competitive rates outside their contracts , or first-time LTL shippers or brokers using transactional rates to test the LTL waters . US LTL shipment volume in 2024 was relatively flat after a more than 6 % drop in 2023 , according to Satish Jindel , president of SJ Consulting Group .

But digital tools are making transactional pricing easier for carriers to provide to customers , especially infrequent shippers or ones not accustomed to shipping LTL .

“ We are seeing and hearing of an increased demand for and usage of transactional or spot LTL quotes both from discussions with carriers and third-party logistics providers ,” said Brian Thompson , chief commercial officer at SMC3 , a trucking data and technology provider specializing in LTL pricing .

Iproving accessibility

Thompson said that the increase in spot-quoted shipments is due to a boost in the availability of application programming interface ( API ) -based quoting , with more LTL carriers now offering this option for their customers to obtain spot quotes .

Many shipper- and broker-focused transportation management systems ( TMS ) now offer direct API connections to carriers . Additionally , a number of carriers are requiring or incentivizing their customers to come directly to them for a quote via API , especially third-party logistics ( 3PL ) partners offering transactional quotes , Thompson said .

Spot quotes used to be limited to large LTL shipments

weighing a minimum of 4,000 or 5,000 pounds , but in recent years carriers have expanded the use of those quoting methods to price transactional business from brokers , 3PLs , freight forwarders and small shippers , Thompson added .

“ Carriers are also starting to utilize more advanced pricing methodologies that incorporate prospective costing of individual shipments and an advanced business rules engine to price individual shipments with more certainty based on the carrier ’ s needs at the time of quote ,” he said .

Indeed , LTL carriers have even started to accept shipments in the 500-pound ballpark that ordinarily would have been routed to parcel carriers .

Targeting small shippers

LTL carriers are looking for new customers and new sources of freight , including smaller shippers and even transloaded international freight .

“ In the last quarter we grew shipment count with small customers by more than 10 %,” Mario Harik , CEO of XPO , the third-largest US LTL provider , told the Journal of Commerce .

XPO has invested in technology , real estate and in its sales force , increasing its number of sales agents by 25 % in 2024 to pursue smaller shippers , Harik said , adding that contractual rates represent about 80 % of XPO ’ s business . Shippers can obtain rate quotes based on pricing agreements directly from XPO ’ s website .

The development of transactional pricing tools accomplishes a couple of key goals for certain LTL carriers . It lets them lure in shippers that would have been outside their traditional customer bases , either in terms of the size , number or frequency of shipments . Secondly , it lets carriers work directly with shippers , taking that business out of the hands of brokers .

38 Journal of Commerce | February 3 , 2025 www . joc . com