Less-than-truckload (LTL) carriers are handling more retail freight due to stagnant industrial demand. This shift was noted in recent Q2 earnings calls from Old Dominion Freight Line, Saia, and TForce Freight.

Adapting to Market Changes

LTL carriers are typically paid based on shipment weight. TFI International Chairman and CEO Alain Bédard explained that the increase in retail freight poses a challenge because it generates lower revenue than industrial freight. Saia CEO Fritze Holzgrefe acknowledged this shift, noting its impact on Q2 results, but emphasized that adapting to changes is part of the business.

Monitoring Freight Mix

Old Dominion Freight Line CFO Adam Satterfield observed stronger retail performance in Q2, in contrast to the stagnant industrial sector. He mentioned that the manufacturing industry has contracted for 19 of the past 20 months. LTL carriers like Old Dominion aim to increase their share of industrial freight to balance their portfolios.

TForce Freight is focused on improving the average weight per shipment by growing its industrial freight share. Bédard highlighted this as a priority for the company’s long-term growth.

Strategic Network Expansion

Holzgrefe expressed confidence that the rise in retail freight would not undermine Saia’s long-term goals. He emphasized that their ongoing network expansion aims to build a strong national network that ensures fair compensation for services provided.

XPO Logistics reported stable industrial demand with a slight increase from May, according to CEO Mario Harik. While the overall freight mix between industrial and retail sectors remained unchanged, Harik noted faster growth in the local channel.

Future Outlook

The LTL industry must adapt to changing demands, balancing retail and industrial freight while maintaining pricing discipline and optimizing freight mix. Insights from these leading carriers highlight the importance of strategic planning and agility in the logistics sector.

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