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US LTL carriers raising rates as shippers keep wary eye on 2025

By William B . Cassidy

US freight demand may be soft , but less-than-truckload ( LTL ) carriers are defying a two-year freight slump and increasing contractual pricing heading into 2025 .

Several large publicly-owned LTL providers have reported third-quarter contract renewal rates rising from low single-digit to high single-digit percentages .

Jon Tetzlaff / Shutterstock . com

Smaller US LTL carriers increasingly merging in competitive market

By William B . Cassidy

Merger and acquisition activity in the already highly-consolidated US lessthan-truckload ( LTL ) market is picking up speed — not from the top down , but from the bottom up .

That could mean new options for shippers trying to find the right home for their LTL freight in a market that has been in flux since Yellow collapsed in July 2023 .

While large companies such as TFI International and Knight-Swift Transportation Holdings are talking about LTL acquisitions , small carriers are expanding by acquisition , too .

“ I think if you ’ re not growing , you ’ re sinking ,” Mike Moran , president of Moran Transportation , told the Journal of Commerce in late October . “ If you don ’ t maintain a certain size and a certain growth rate , you ’ ll have a hard time competing in this market .”

Chicago-based Moran Transportation said in a statement Oct . 29 it is buying RMX Freight Systems , another small LTL provider , expanding its coverage area , terminals and workforce .

Terms of the deal were not disclosed , but it adds three states to Moran ’ s service map , bringing its total number of terminals to 12 and its truck fleet to 675 vehicles . Moran will now have coverage from points in the Dakotas and Missouri in the West to Ohio and points in Kentucky and West Virginia in the East .

“ If you don ’ t maintain a certain size and a certain growth rate , you ’ ll have a hard time competing in this market .”

The Moran-RMX combination is the latest in a string of acquisitions quietly reshaping the lower tier of LTL providers as defined by revenue , further consolidating the sector .

Smaller carriers were among the fastest-growing LTL companies in 2023 , and acquisitions propelled that growth .

CrossCountry Freight Solutions , for example , was ranked 40th among US LTL carriers in 2020 , but in 2024 rose to 25th place in the Journal of Commerce / SJ Consulting Group rankings thanks to several acquisitions .

More recently , DC Logistics acquired the US freight business of GLS , the Netherlands-based parcel carrier , including its LTL assets known as Mountain Valley Express . Jack Cooper has expressed interest in purchasing LTL provider Standard Forwarding from DHL .

These companies are combining to get the terminals , talent and technology they need to compete as larger carriers increasingly seek business in regional markets , said Satish Jindel , president of transportation research firm SJ Consulting Group .

“ As a small carrier , it ’ s increasingly difficult to have all of the ‘ three Ts ’: terminals , talent and technology ,” Jindel said . “ There are more of these small acquisitions coming .”

Shrinking LTL pool for shippers

Moran believes smaller carriers are part of a value proposition for shippers that is increasingly under threat .

38 Journal of Commerce | November 18 , 2024 www . joc . com