Annual Review & Outlook 2026

Surface Transportation

The US LTL sector still has less capacity than it did before Yellow’ s demise in 2023. Jon Tetzlaff / Shutterstock. com

LTL providers carefully managing capacity in changing market

By William B. Cassidy

The big picture: US less-than-truckload( LTL) carriers are girding for market changes in 2026, led by the spinoff of FedEx Freight, and hoping for a resurgence in industrial freight to help fill partially empty trailers and terminals. LTL pricing remains elevated, but continued weak demand will likely put further rate increases and carrier expansion plans on hold.

A look back: The dust thrown up by the collapse of Yellow, the third-largest LTL carrier when it declared bankruptcy in August 2023, and the resulting LTL land rush finally settled last year. With almost all of Yellow’ s former terminals sold by November, several of the largest LTL carriers ended the year with more terminals despite having less freight to haul. But excess capacity isn’ t the negative for LTL providers that it is for truckload carriers. In fact, some LTL carriers aim to keep up to 30 % excess capacity in their networks to ensure freight“ fluidity” and to provide surge protection and room to grow. What’ s more, the LTL sector as a whole still has roughly 6 % less capacity— i. e., terminals and doors— than it did before Yellow’ s demise and 10 % less than in 2020. That capacity shortfall has supported sustained yield and pricing gains, despite most carriers reporting a drop in average daily shipment counts. Average LTL rates in September slipped slightly after climbing to new heights in August but remained 9.9 % higher than in September 2024 and 15.7 % higher than in July 2023, the last full month Yellow was in operation, according to the US Bureau of Labor Statistics( BLS) long-distance LTL producer price index( PPI).

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A look ahead: Shippers reported LTL pricing flattening in contract talks late last year, with some carriers offering lower rates in certain lanes to maintain density and“ protect their turf.” With demand conditions unlikely to improve in the short term, LTL carriers are putting more of their capacity, old and new, into reserve. Terminals added to networks are likely to remain open, but with fewer active doors, and some lower-volume properties will likely be put in mothballs until the industrial economy gathers steam. LTL capacity may have dropped, but freight demand seems to have fallen farther, so the question now becomes how much longer carriers can avoid deeper cuts.

The next inflection: Unlike their truckload counterparts, LTL carriers can’ t rely on capacity cuts alone to drive rate growth. With more than half of LTL freight generated by domestic manufacturing, LTL operators need an industrial revival, but ongoing political and economic uncertainty make that an unlikely proposition. Carriers are also hoping that lower interest and tax rates will boost consumer spending to an extent that would lift manufacturing output. If, on the other hand, demand continues to fall, that would put more pressure on LTL networks and the industry’ s famed“ pricing discipline.”

email: bill. cassidy @ spglobal. com

LTL rates hovering above 2022 peak despite weak demand

US long-haul less-than-truckload( LTL) producer price index( PPI)

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250 210 240

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210 L 2022 2023 2024 May, 2025

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

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January 5, 2026 | Journal of Commerce 65