The last few years for the LTL market have been volatile and 2025 was no exception, but surprisingly, LTL carriers have seemed to circumvent the basic laws of supply and demand. We say that tongue in cheek, but there is some truth to it. While the overall economy has been expanding, the manufacturing sector contracted for ten consecutive months through December 2025 according to the ISM Manufacturing Purchasing Managers Index. This has led to sluggish demand from a core sector that drives LTL freight.
Despite soft freight demand and economic uncertainty, LTL carriers prioritized “pricing discipline” in 2025 to protect margins. Per the TD Cowen/AFS Freight Index, the LTL rate per pound in the 4th quarter of 2025 increased 4.9% year-over-year, and the LTL Producer Price Index (PPI) posted solid year-over-year gains. This was a result of General Rate Increases (GRIs) in the mid-single-digits, contract renewal increases ranging from 1.6% to 5%, and fuel price increases in late 2025 peaking in November. We had predicted a 1-3% increase last year, and while the overall increase was higher, there were pockets where our prediction held true.
Let’s explore the underlying factors that impacted LTL in 2025.
- Capacity: Yellow terminal acquisitions enabled rapid expansion for carriers like Saia, driving low double‑digit tonnage growth. Results were uneven across the market, with some carriers—such as Old Dominion—maintaining significant excess capacity as they wait for demand to rebound.
- Tariffs: Anticipated tariffs pushed companies to pull forward inventory, temporarily elevating demand before softening later in the year.
- FedEx: Despite expectations that its June 2026 LTL spinoff would spur aggressive growth, FedEx reported a 1.7% revenue decline and a 2.8% drop in daily tonnage. While still positioned to disrupt the market, the company continues to exercise pricing discipline.
- Density-Based Pricing: The NMFTA’s new 13‑tier density‑based classification created cost volatility. Low‑density shippers faced higher freight classes—sometimes projecting up to 50% cost increases—while high‑density shippers generally saw reductions.
- Operating Costs: Carrier operating expenses, including labor and equipment, continue to rise faster than revenue.
- Surcharges: Carriers expanded and increased accessorial surcharges, in some cases outpacing base rate changes.
Factors that could impact LTL costs in 2026
One thing is clear after the last few years – LTL carriers will continue to work hard to maintain their pricing discipline. Several carriers have already announced General Rate Increases in the 4.9% to 5.9% range.
LTL carriers also continue to invest in technology to help them target cost reductions and optimize revenue, enabling them to be selective in the business they accept or retain. They manage density and capacity actively and continually adjust their linehaul and service networks to minimize costs. With manufacturing remaining sluggish for at least the first six months of 2026, LTL carriers do face some headwinds that could create cracks in their disciplined pricing approach. However, it is highly likely that they will maintain their discipline. We explore some of those factors below that could impact LTL pricing in 2026.
- Operating costs are expected to continue to rise, and LTL carriers will need to recoup at least some of these costs.
- Tightening truckload capacity could push more volume into LTL, impact capacity, and justify LTL pricing increases.
- Spikes in shipping demand could drive higher costs and longer transit times.
- With excess capacity (from purchase of Yellow terminals and already existing capacity) coupled with softer demand in the first six months, LTL carriers may be forced to chase revenue in some markets and undercut their pricing to secure volume to fill trucks and terminals.
- With fuel costs projected to decrease in 2026, LTL carriers will want to make up that revenue through their pricing or other accessorial costs.
- Continued introduction of electric trucks which have operating cost advantages but also come with higher upfront costs and the need for more and faster charging stations and longer mileage ranges on one charge.
Predictions and how you can effectively navigate LTL in 2026
As we detailed above, numerous factors will continue to impact LTL operations, costs, and ultimately the pricing. When negotiating, you will get some version of the list outlined above from LTL carriers justifying their pricing increases. We expect the LTL carriers’ pricing discipline will hold in 2026 and we’ll see 3-5% increases, but opportunity still exists to negotiate and achieve savings or at least minimize the pricing increase.
So, what things should you be doing to ensure that you are receiving the most competitive LTL pricing? We recommend the following:
- Master Data: Accurate product master data is critical. Errors in NMFC codes, freight class, weight, or dimensions can lead to incorrect LTL costs, misclassified BOLs, added rework, and less effective pricing negotiations. Keeping this data current reduces avoidable charges and improves overall transportation planning.
- Effective Procurement & Analytic Tools: LTL carriers use advanced cost‑modeling tools—now enhanced by AI—and often understand your cost drivers better than you do. Their pricing can be highly granular (by facility, direction, or metro area), so you need the ability to validate it. Effective negotiation requires tools that accurately rate shipments, compare them to historical costs, and clearly show the impact of pricing changes to identify negotiation opportunities.
- Partner with your LTL carriers: Maintaining a transparent, trust‑based dialogue with your carrier creates mutual value. It helps you address issues collaboratively and strengthens pricing negotiations by providing insight into the carrier’s cost drivers and opportunities to reduce costs together.
If you find it challenging to validate or negotiate LTL pricing, many third‑party logistics providers and consultants offer valuable support. They can equip shippers with the procurement expertise and analytical tools needed to navigate the process effectively. While these resources can be beneficial, it is essential to select an impartial partner who prioritizes your best interests.
High‑quality data is critical in the LTL market. Focus first on ensuring the accuracy and completeness of your data; without it, your decision‑making will be, at best, directional.
Wishing you a successful 2026!
This is the second in a set of four articles from the North America Transportation Practice. The first article is here: 2026 Truckload Rate Outlook: where do we go from here?
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