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July 3, 2023

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48 Journal of Commerce | J uly 3, 2023 Surface Transportation and when they need them to arrive, and they don't want them to sit for too long." LTL carriers have become much better at not just pricing, but deter- mining what is an acceptable level of profitability per shipment and per trailer. For example, LTL shipments per day at Old Dominion Freight Line (ODFL), the second-largest US LTL provider, dropped 11.4% year over year in May and revenue per day decreased 15.7%, ODFL said in early June. But the company's reve- nue per hundredweight, excluding fuel surcharges, rose 7.9%. "While our volumes decreased on a year-over-year basis, our LTL shipments per day remained relatively truckload market, with the 25 larg- est LTL carriers accounting for 92% of all US LTL revenue. Keeping pallets moving That consolidation is ongo- ing, Jindel said. RIST Transport, an LTL provider with headquar- ters in New York state, last week acquired AMA Transportation, a Massachusetts-based LTL operator. The deal will allow both companies to offer overnight service through- out New England and the Northeast. RIST operates about 219 trucks and AMA has a fleet of 67 vehicles, according to the latest data filed with the Federal Motor Carrier Safety Administration. "The combined company will move up into the list of the Top 50 LTL carriers when ranked by reve- nue," Jindel said. Conversations with LTL carriers and shippers indicate that although shippers are moving less LTL freight, they're still partially filling trailers, and those trailers need to move. For example, instead of 10 pallets, a shipper might tender six. Some freight may be consoli- dated into truckloads, but some still need to move as LTL shipments to meet customer delivery deadlines. "Shippers have become much better at predicting what they need and where and when," Tomasz Jamroz, head of operations at Road- runner, said in an interview. "They know where they need those goods LESS-THAN-TRUCKLOAD (LTL) trailers in the United States aren't as full as they once were, but the palletized trucking sector is not running on empty. US LTL carriers have suffered a significant decline in shipments, even deeper than that seen by their contract truckload counterparts, but their revenue per shipment is rising, according to SJ Consulting Group. And at least one LTL carrier has been using dynamic pricing to keep its volumes rising, bucking the overall demand trend. While LTL shipment counts overall were down 9.1% year over year in the first quarter, LTL rev- enue per shipment rose 2.7%, according to data supplied by the Pittsburgh-based consulting firm. In comparison, truckload ship- ments, excluding spot market freight, were down 6% year over year in the first quarter, while average rev- enue per shipment dropped 5.2%. SJ Consulting Group analyzed data from the major asset-based truckload and LTL carriers to obtain the data. The higher revenue per ship- ment on fewer shipments indicates LTL carriers are having more suc- cess holding a line on pricing than their truckload competitors, said Satish Jindel, president of SJ Con- sulting Group. "The truckload guys have a spot market that creates a competitive dynamic that doesn't exist in LTL," putting more pressure on truckload contract rates, he said. That success is reflected in the producer price index (PPI) for LTL primary services, which was down only 5.5% year over year in April, compared with a 19% decline in the truckload PPI. One reason is consolidation. The LTL sector is famously more consolidated than the fragmented Cruise control US LTL trucking companies improving yield, profitability despite headwinds By William B. Cassidy US LTL pricing slips for second straight month in April US long-haul less-than-truckload (LTL) producer price index (PPI) 200 180 200 220 240 L L 2019 2020 2021 2022 LTL PPI Notes: US BLS producer price indices are based on selling prices for trucking services US US Source: US Bureau of Labor Statistics data, JOC analysis © 2023 S&P Global Trucking | Rail | Intermodal | Air & Expedited | Distribution

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