Surface Transportation

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US LTL providers adding trucks as they build out terminals

By William B . Cassidy

US LTL pricing growth accelerates through April

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

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Less-than-truckload ( LTL ) carriers expanding their US terminal networks are also purchasing trucks and trailers that will be needed to ensure supply is in place to meet future demand .

Equipment purchases haven ’ t received the same level of attention as real estate deals during an LTL land rush , but LTL carriers are investing in trucks and trailers , replacing older equipment and rebalancing networks as they add terminals and lanes .

Some LTL equipment added to fleets is recycled capacity — some 60,000 tractors , trailers , forklifts and other equipment once owned by Yellow are being sold by auction . Ritchie Bros . and Nations Capital are handling the sales at auctions across the country .

The expansion coincides with sustained rate increases at LTL carriers . The US long-haul LTL producer price index — a measure of all-inclusive “ selling prices ” — rose 8.2 % year over year in April and was up 6.9 % from last July and the collapse of Yellow .

But the expansion predates Yellow ’ s fall . Large LTL providers have grown their fleets by double-digits since 2019 , their financial records show .

“ This year alone marks the single biggest influx of terminals and equipment in our recent history .”

Recent earnings reports show some LTL companies are more aggressive about equipment purchasing than others , with companies adding the largest number of terminals also acquiring equipment needed to serve new facilities .

“ This year alone marks the single biggest influx of terminals and equipment in our recent history ,” Webb Estes , president of Estes Express Lines , said in his May president ’ s message to shippers . Estes , the fourth-largest US LTL carrier , acquired 29 terminals from former competitor Yellow in the bankrupt company ’ s real estate auction .

The privately-owned company hasn ’ t said how many vehicles it will add to its fleet of 10,400 tractors and 41,000 trailers . But as Estes and other competitors grow , it will need more tractors and trailers to maintain and expand service .

XPO and Saia , both publicly traded companies , each

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

purchased 28 terminals from Yellow and have made significant additions to their equipment fleets as well . XPO , which had about 7,900 tractors as recently as 2021 , now has more than 9,500 trucks .

“ Excluding the Yellow asset acquisition , more than twothirds of our capital expenditures in 2023 were deployed to increase the capacity of our fleet ,” XPO said in its annual report in May . Since 2022 , XPO has added more than 11,000 trailers , including more than 6,400 in 2023 , and more than 2,400 tractors .

XPO added 1,600 tractors in the first quarter alone , bringing its average tractor age down to 4.2 years from 5 years at the end of 2023 , according to CEO Mario Harik . The company also added 1,300 trailers manufactured at its own trailer plant in Arkansas .

‘ Another step up coming ’

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Saia is also stepping up equipment purchasing significantly . So far in 2024 , “ we ’ ve already taken delivery of 3,000 units , if you include trailers , tractors and forklifts ... we ’ ve got another step-up coming ,” CFO Douglas Col said in an April earnings call .

Saia added only about 300 tractors in 2023 , bringing its total to approximately 6,500 by the year ’ s end , according to its annual report .

Differences in how publicly-owned carriers organize their LTL operations and report earnings make apples-toapples comparisons across the sector difficult . ArcBest , for example , doesn ’ t report a tractor count for its ABF Freight LTL division , but it is expanding its fleet .

“ We operate a mature nationwide network and have a robust process in place to identify where we need to increase capacity to meet customer demand ,” Seth Runser , president of ABF Freight , said in an April earnings call . “ Since the end of 2021 , we ’ ve added roughly 500 doors , and we plan to add around 280 doors the rest of this year .”

The company will add trucks to service those dock doors , including those that come with four terminals Arc- Best purchased from Yellow . “ We have more equipment

32 Journal of Commerce | June 17 , 2024 www . joc . com