The less-than-truckload sector is said to be entering the summer in a really strong position regarding their business. Bob Costello, the chief economist at American Trucking Associations, stated that the sector benefited from many different factors. The factors include; strong e-commerce sales, tightness in the truckload sector, and accelerating factory output. He added that for those reasons, there were loads of freight to be moved by LTL fleets.

Amit Mehrotra, managing director of airfreight and surface transportation at Deutsche Bank, similarly acknowledged that both demand and supply were in a good phase. He added that the situation has allowed prices to go higher. He stated that the current state had caused an increase in prices, influencing the amounts of volumes as well. However, Mehrotra noted that the LTL sector prefers higher prices with fewer volumes since there are no costs attached to higher pricing, unlike loads of volumes.

LTL carriers mostly serve the industrial sector

Mehrotra said that LTL carriers mostly serve the industrial sector, which has recently rebounded, leading to witnessed positive trends. Also, he said the industrial economy experienced the first positive growth in March for the past 18 months. He stated that when such a transition moment occurs, it lasts quite some time. He, therefore, reiterated that the positive trend is projected to be experienced for the next three years.

A report by Stifel indicated that the economy in the industrial sector had not yet fully recovered. The supply chain still had downtimes due to delays at the ocean, congestion at the port, low inventory levels, and labor shortage. The report noted that the turnover rates in the truckload sector were high, and the payment structure was complicated and prone to changes. LTL faces the challenge of hiring drivers and dockworkers with the increased volumes amidst the pandemic times.

Mehrotra reiterated that the market in the LTL sector moves in a consolidated manner. Just right about the top 10 companies account for the largest share of the capacity measured using the door capacity. Old Dominion, according to Mehrotra, has been the best over the past decade. Old Dominion is expected to release its financials by July 28, and just like most top companies, it will have strong quarterly results.