Less than truckload pricing is moving up at the fastest rate since the Yellow shutdown in the summer of 2023. The SONAR LTL monthly cost per hundredweight index shows new bids and general rate increases pricing roughly 12.5 percent above the same point last year, and about 29 percent above May 2021 levels.

The move follows a soft start to the year. LTL rates posted a 1.7 percent year over year decline in January and a 1.2 percent decline in February. The March reading reversed both, jumping 7 percent year over year.

LTL pricing normally trails the truckload market by three to six months because nearly all LTL freight moves under contracts or blanket pricing agreements lasting at least a year. The current response is running on that schedule, though the magnitude is larger than the pattern would suggest. The truckload turn began during holiday peak season, a period that usually leaves LTL untouched, since LTL carries less retail replenishment freight.

Shipment weights offer a clue about what is driving the surge. Average weight per LTL shipment has risen about 11 percent since the start of the year, consistent with shippers breaking up full truckloads and pushing the pieces through LTL networks to secure guaranteed capacity at lower service levels.

There is no meaningful LTL spot market, so urgency never shows up in real time pricing. Increases are stickier as a result and take longer to unwind.

Source: FreightWaves - https://www.freightwaves.com/news/less-than-truckload-rates-have-sharp-response-to-broader-market-turn