Spotlight
UPS reconsiders LTL
UPS no longer owns a less-than-truckload( LTL) subsidiary, but that doesn’ t mean it’ s lost all interest in LTL freight. The largest US package carrier has“ reintroduced” UPS Ground with Freight Pricing, a service option that targets shipments weighing more than 150 pounds typically hauled by LTL carriers as part of a palletized shipment.“ This positions us to be the only small package carrier that offers parcel-like pricing for less-than-truckload shipments, which is a true differentiator,” UPS CEO Carol B. Tomé said in the company’ s first-quarter earnings call. UPS’ major small package competitor, FedEx, owns its own LTL carrier, although it plans to spin off FedEx Freight in 2026. UPS is reviving the service as LTL shipping costs are rising, with the US long-distance LTL producer price index( PPI) up 5.5 % year over year in March and 6 % on average in the first quarter. Overall, the selling prices the PPI represents have climbed 12.1 % since Yellow, once one of the largest US LTL carriers, collapsed in July 2023. As LTL prices rise, shippers show more interest in alternative modes and shipping options.“ We see customers choosing other options in certain instances when we’ re taking rate increases,” Matthew J. Batteh, CFO of LTL carrier Saia, said in an earnings call last week.“ Customers always challenge the pricing increases that we propose.”
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LTL prices elevated and stable
US less-than-truckload( LTL) pricing has flatlined, but at the highest point on record, according to the US Bureau of Labor Statistics( BLS). The current BLS long-distance LTL producer price index( PPI) of 259 has remained stable from February through April, level with its previous pandemic-era peak in June 2022. The BLS uses pricing data from December 2003 as its base( 100) for calculating the LTL and truckload PPIs. The April reading is 4.9 % higher than a year ago and 12.1 % higher than July 2023, when the collapse of Yellow into bankruptcy set LTL costs climbing for the next 22 months. The LTL PPI is a measure of the total“ selling price” LTL customers pay carriers for services, including accessorial fees and fuel surcharges as well as base LTL trucking rates. It is a metric tracking the total cost of LTL services to shippers, rather than base rates. The LTL PPI flatlined from September through December 2024 before jumping 5.8 % from December to January and climbing another 0.8 % in February to its current plateau. The jump in early 2025 most likely corresponds with new rates set by contract renewals.
Tonnage tax whacks ro / ro
Car carriers face bills into the hundreds of millions to meet the cost of the United States Trade Representative’ s( USTR’ s) proposal to impose levies on non-US-built ships entering the US beginning Oct. 16, shipping executives said. Wallenius Wilhelmsen, the world’ s largest car carrier operator with 128 ships, said its vessels make between 300 and 350 voyages a year to the US, potentially generating annual voyage fees of about $ 300 million. Rival Norwegian operator Höegh Autoliners estimated its own potential voyage fee exposure at between $ 60 million and $ 70 million a year. Other roll-on / roll-off( ro / ro) operators facing hefty voyage fee bills include Japan’ s three largest carriers— NYK Line, MOL and“ K” Line— according to port call data from maritime consultancy Esgian, as well as Glovis, which is affiliated with South Korea’ s Hyundai Motor Group. Unlike other sectors, including container shipping and multipurpose vessels, where voyage fees only target China-built or-operated vessels, Lasse Kristoffersen, Wallenius Wilhelmsen CEO, said an anomaly in the USTR proposal meant that all foreign-built ro / ro vessels are liable for voyage fees. He expected the voyage fees to be passed on to
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the carrier’ s customers, like the way charges related to the European Union’ s emissions trading scheme are paid by shippers. Under current plans, the USTR proposal will levy voyage fees of $ 150 per car equivalent unit on car carriers from mid-October.
DAT acquires Outgo
DAT Freight & Analytics has acquired a payments and factoring technology provider that caters to truckload carriers to make its freight load board more useful and trustworthy for both carriers and brokers. The acquired company, Outgo, was founded in 2022 by veterans of Uber and now defunct freight broker Convoy. Terms of the deal, announced on May 15, were not
6 Journal of Commerce | June 2, 2025 www. joc. com