Surface Transportation
fourth-largest LTL provider and largest privately owned LTL company . “ When 10 % of LTL capacity leaves , everyone gets an enormous tailwind .”
Land rush still on
Some of the largest LTL carriers are showing sharp elbows in competition for Yellow ’ s real estate and business . They have been battling to buy former Yellow terminals and reopen them for three quarters , but there is still less LTL capacity available than a year ago .
According to documents filed in Yellow ’ s bankruptcy case in August , the company still has 116 leased and owned terminals that have yet to be sold or leased to other companies . Industrial real estate firm CBRE has been hired to dispose of those properties .
“ These carriers are going to have different footprints . That ’ s changing the competitive landscape .”
The LTL sector has undergone a limited realignment , with capacity and business shifting hands . Companies including Saia , Estes and XPO have gained large amounts of freight from Yellow .
“ These carriers are going to have different footprints ,” said Mike Regan , chief relationship officer and founder of TranzAct Technologies . “ That ’ s changing the competitive
US LTL pricing rises yoy for eighth straight month in July
US long-haul less-than-truckload ( LTL ) producer price index ( PPI )
245
240 180 235
230 229
225 L Jan 2023 Jul Jan 2024
Jul , 2024 Jul
Notes : US BLS producer price indices are based on selling prices for trucking services
Source : US Bureau of Labor Statistics data , JOC analysis
Gone are the days when LTL carriers battled for market share by offering deep discounts . Shutterstock . com
LTL PPI
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landscape in the industry . They ’ re not in it just for expansion , they ’ re in it for profitable expansion .”
Estes is the latest company to add more former Yellow facilities to its network . In July , the company reacquired seven facilities it had leased to Yellow and is now adding them into its 280-plus terminal network . Altogether , Estes has acquired 39 Yellow terminals .
The race to acquire terminals is not just about expansion , Estes said .
“ It ’ s really about efficiency ,” he said . “ LTL is all about cross-docking freight , and when you don ’ t have enough [ terminal ] doors you have to touch that freight again and again .”
More dock doors and denser networks — more terminals closer together — means freight flows stay fluid and there is more opportunity to provide faster next-day service .
“ These [ new ] terminals provide more intermediate opportunities ,” Estes added .
Opportunities exist for acquisitions in LTL as well — and not just of terminals , but companies , too . Knight-Swift ' s acquisition of Dependable Highway Express ( DHE ) is the largest LTL deal so far this year . SJ Consulting Group President Satish Jindel believes more acquisitions will follow .
“ The LTL sector is very attractive right now , and smaller companies need investment to buy technology they will need to compete ,” including shipment dimensioning equipment , Jindel said .
On Aug . 30 , the International Brotherhood of Teamsters said DHL Freight , a nonasset arm of Germany ’ s Deutsche Post DHL , plans to sell Standard Forwarding , a regional LTL carrier based in East Moline , Ill .
Perhaps the biggest change for LTL carriers has been the way in which they compete . Gone are the days when carriers battled for market share by offering deep pricing discounts . Instead , LTL providers have spent the past decade emulating Old Dominion Freight Lines ’ disciplined pricing and costing strategy .
That makes it likely LTL companies will maintain their “ pricing discipline ” going forward .
L email : bill . cassidy @ spglobal . com
44 Journal of Commerce | September 23 , 2024 www . joc . com