2026 Market Update: LTL holds the line

From the March-April 2026 edition of Supply Chain Management Review.

March-April 2026

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Despite ongoing weakness in the much larger for-hire truckload sector, carriers in the $53 billion less-than-truckload (LTL) market are extending a three-year run of strong yield management.

Yet even as they continue to flex their pricing power in a sector defined by high barriers to entry, industry leaders say they have not seen a market this soft in a generation or longer. “In one word, I would describe it as ‘tepid,’” says Chuck Hammel, president of Pitt Ohio, a major Northeastern LTL carrier.

That’s not for lack of occasional false starts. “We will, at times, get surges, but then it backs off a week or so later,” Hammel adds. “I’ve never seen a market like this last so long.”

Still, LTL carriers are hardly printing money. Some freight that once moved through LTL networks has been absorbed by struggling truckload carriers, some of which have lowered their minimum shipment weights to as little as 10,000 pounds.

“Nothing jumps off the page to me to indicate an economic resurgence is around the corner that will materially improve the freight market,” says Peter Latta, chairman and CEO of A. Duie Pyle, the nation’s 16th-largest LTL carrier. “I hope I’m wrong.”

Following Yellow’s cessation on July 30, 2023, its roughly 10% share of the LTL market was redistributed largely among the remaining top 25 carriers. While some moved aggressively to expand, others notably passed.

As carriers weighed bids on Yellow’s former 325 terminals, the biggest capacity gains went to FedEx Freight, the largest LTL carrier, and Saia, the sixth-largest. One of the sector’s strongest players, Old Dominion Freight Line (ODFL), initially considered acquiring all of the former Yellow facilities, but ultimately balked at prices that in some metropolitan markets exceeded $100 million per terminal.

“I’m concerned the industry may slide into the LTL environment that carriers hated in 2009,” says Satish Jindel, principal of SJ Consulting. He recalls how the 2008–2009 downturn prompted major carriers—led by FedEx Freight—to launch a discounting war aimed at putting Yellow out of business.

“In the process, they took themselves over the cliff,” Jindel says. “It took the LTL industry five years to recover from the sharp decline in rates.”

Will the LTL sector learn from the past? In our annual deep dive, we examine the market fundamentals, how carriers are managing overcapacity, and how long-established LTLs can maintain pricing discipline before competitive pressure risks another damaging rate war.

How strong is the LTL sector? 

Even with additional capacity coming from former Yellow properties, LTL pricing has remained fairly strong, experts say.

ODFL led the latest round of rate increases in mid-October, announcing a 4.9% general rate increase (GRI) effective Nov. 3. FedEx and ABF Freight System matched ODFL’s move, while Saia implemented a 5.9% GRI on Oct. 1—three weeks earlier than most, though 200 basis points lower than its 2024 increase.

Still, for most large LTL carriers, a customer’s actual rate depends on individual freight characteristics, including how shipments fit within a carrier’s network and broader freight mix.

“Even as LTL networks pick up smaller shipments and experience some turnover, carriers have kept a keen eye on profitability and network efficiency,” says Mich Fabriga, vice president of LTL pricing for AFS, which helps more than 1,800 companies analyze freight costs and manages more than $11 billion in transportation spend.

Emphasizing yield over volume has proven to be a winning strategy in past down cycles, and rates are again “proving resilient,” Fabriga adds, “even in the face of negative indicators such as the ISM Manufacturing PMI, which has shown contraction in 33 of the last 35 months.”

“The market has largely reached equilibrium,” says Latta. “I hope the surviving carriers have vicariously learned the lessons—and effects—of irrational and undisciplined pricing.” Maybe they have. And maybe they haven’t. Only time will tell.

Challenges ahead

Like much of the industry, LTL carriers are grappling with rising costs across nearly every category—labor, insurance, equipment, repair parts, and the growing expense of defending themselves in court against so-called “nuclear verdicts” in wrongful-death lawsuits.

Insurance, in particular, is climbing at a punishing pace. “It’s not unusual to hear about good companies having their fleet insurance go up 75% to 125% year over year,” says Pitt Ohio’s Hammel. “That’s crazy. I don’t know how many companies can overcome this kind of cost increase.” He adds that both fleet insurance and healthcare costs are now rising at double-digit rates.

Latta of A. Duie Pyle agrees, noting that both his company and Pitt Ohio operate heavily in the congested Northeast. “It’s an inherently risky business, and the scales of justice are unfortunately not balanced,” he says.Latta believes addressing jury awards that can exceed $20 million in wrongful-death cases will require two changes:

1. eliminating plaintiff-lawyer contingency fees that bear little relationship to the actual cost of legal services; and

2. requiring the losing side to pay the winner’s legal costs.

Until that happens, carriers must focus on protecting themselves. At Pyle, that has meant investing in road-facing, side, rear, and inward-facing cab cameras across the fleet, while remaining vigilant against what Latta describes as fraudulent claims involving repeat lawyers, doctors, and claimants. “When the cameras demonstrate we’re at fault, we know it’s best to accept responsibility and seek to expeditiously close the matter in a fair and equitable manner,” Latta adds.

Classification changes accepted

One bright spot for LTL carriers—and shippers—has been how smoothly changes to the National Motor Freight Classification (NMFC) rating system were absorbed by the market. About one-third of the revisions took effect last July, with the remainder scheduled for this year.

“It really was a non-event,” says Pitt Ohio’s Hammel. “One of our executives said it reminded him of Y2K. There was all of this buildup—and then nothing.” Part of the smooth transition, he says, was that carriers identified affected customers early and addressed the changes in advance. Broader adoption has also been aided by the rollout of dimension-measuring equipment across most large trucking facilities.

The updates place greater emphasis on package dimensions, not just weight and destination. By better accounting for density, carriers can load more smaller shipments and utilize weight capacity more effectively, rather than “cubing out” first on lighter, less-dense freight.

The relationship between weight and cost per shipment continues to highlight strong pricing discipline in the LTL sector. AFS data from the third quarter of 2025 show shipment weight down 7.4% year over year, while cost per shipment declined just 0.7% over the same period.

Rates down the road

The LTL market continues to prioritize cost per shipment over volume, helping rates remain relatively steady, according to AFS Logistics.

Satish Jindel of SJ Consulting expects 2026 LTL rate increases to be “flat to low single digits,” roughly in the 2% range. However, he notes that with fuel surcharges down from a year ago, carriers’ true revenue is likely slightly lower—at least in the early part of the year.

LTL carriers are emphasizing yield rather than volume, an approach that has worked well in previous down cycles. But demand is unlikely to rebound until the U.S. economy fully recovers—an outcome made more uncertain by shifting tariff policy. Economists caution that this recovery could take time.

AFS data show that LTL cost per shipment declined just 0.7% year over year in the third quarter, even as shipment weight fell 7.4%. “A longer-term indication of carriers’ successful yield management and margin protection efforts is that cost per shipment has held steady at elevated levels since the second quarter of 2023—a period of nine straight quarters,” the AFS index reported.

Looking ahead, AFS adds that the fourth-quarter 2025 LTL rate-per-pound index is expected to remain above its January 2018 baseline, marking eight consecutive quarters of year-over-year growth.

So where did this pricing discipline come from? Geoff Muessig, chief marketing officer at Pitt Ohio, says most large LTL carriers now rely on highly accurate costing models that account for virtually every pound of freight.

“That has led to price discipline,” Muessig says. “When you run a shipment through the costing model, you can see whether it makes sense or not. It’s not that trucking executives are any smarter—the models have simply gotten better, more accurate, and more widely used.”

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