Over the past week, we have had a number of follow-up conversations coming out of our scenario planning discussion. And one question keeps coming up:
“If truckload rates are going up…does that mean LTL is going up too?
Historically, that has been a reasonable way to think about the market. Truckload and LTL have often moved in tandem—if rates rise or fall in one market, the other market follows. But that is not what we are seeing right now.
As the freight recession begins to ease, truckload rates are moving up—in some cases rates are 10% to 20% higher than last year - and that is before factoring in additional increases due to higher fuel surcharges. That creates understandable concern.
But here is some great news! In today’s transportation marketplace pricing in the LTL market does not have to follow that same path with the types of increases were seen in the truckload market.
Based on recent sourcing activity, we are seeing something different. Shippers who approach LTL strategically are experiencing more moderate increases—and in some cases, are reducing their costs.
That is not market timing. That is execution.
Why This Is Happening
LTL pricing is not just driven by capacity. The density of freight moving within a carrier network is critically important. That is because carriers are managing freight flow across terminals, lanes, and equipment. Their profitability depends on how efficiently that network operates—not just how much freight is moving.
This means that the success of your LTL sourcing event is influenced as much by how your freight fits within a carrier network as what is happening within the transportation market at a given point in time.
Where to Focus
If you are doing some scenario planning and looking at projected freight costs for the next 6–12 months, here are three very important variables:
1. Start with your current carriers
Before going to market, have direct conversations.
Understand how your freight performs in their network—where it works, and where it creates inefficiencies.
That context matters more than most shippers realize.
2. Know your freight at a network level
LTL carriers focus on trailer utilization. While you do not control how trailers are built, your freight characteristics—especially density—directly impact that outcome.
The difference between a trailer moving at 27,000 pounds versus 20,000 pounds is significant from a profitability standpoint. That gap is one of the drivers behind how carriers evaluate and price freight.
3. Align before you negotiate
In LTL, alignment drives results.
When your freight fits within a carrier’s network, pricing tends to follow. When it does not, costs show up—either in rates, accessorials, or service.
A Practical Consideration
Carriers are using increasingly sophisticated pricing models that look at the “cost to serve” your account.
That raises raises a simple question: What are you doing today that drives your carrier’s cost?
At TranzAct, we have built tools to help answer that question and improve the success of your sourcing event:
1. The Carrier Yield Test, evaluates how your practices impact carrier cost and positioning
2. Our Carrier-Friendly White Paper outlines what carriers actually value—and what drives better long-term pricing outcomes.
If you would like a copy of either, let me know. We are happy to share and walk through how to apply them in your network.
Scenario Planning Question
In your scenario planning process, here is an important question to consider:
What happens if your LTL costs go up - not because they had to, but because your strategy didn’t change to reflect the realities of today’s freight market.
That is the real risk. And it is also the opportunity.
Because in LTL, the difference between an effective versus ineffective sourcing event is not just the market and the timing of the event.
It is how you plan—and how you execute.
We're here to help. To get in touch, give us a call at 630-833-0890, send us an email, or schedule a conversation.