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LTL carriers eye further growth due to truckload constraints
FedEx Freight, Amazon eye market share as competition heats up
LTL capacity is now being absorbed, and weight per shipment is climbing. (Jon Tetzlaff/Getty Images)
Key Takeaways:
- Less-than-truckload carriers saw stronger demand in the second quarter as truckload capacity tightened, with executives reporting rising shipment weights and sequential improvement through the period.
- The shift reflects structural capacity constraints from CDL enforcement and fewer drivers, boosting LTL pricing with rate hikes near 6%-7% and higher revenue per shipment.
- Competition is expected to intensify in late 2026 as FedEx Freight targets new segments, Amazon expands LTL services and carriers add terminals to meet demand.
Less-than-truckload carriers saw greater demand from shippers in the second quarter of 2026 due to truckload capacity constraints and expect that to continue, perhaps increase, in the back half of the year.
During lean times, truckload carriers try to make multiple stops work and parcel carriers take larger-than-usual shipments, but when demand ramps up or capacity declines, that flexibility evaporates. As a result, LTL capacity is now being absorbed, and weight per shipment is climbing.
“We’re kind of the meat of the sandwich in the trucking industry. You’ve got the truckload that’s huge. And then you’ve got on the other side, the parcel guys that are handling the really small stuff,” Estes Express Lines President and Chief Operating Officer Webb Estes said.
Demand improved sequentially as the second quarter progressed, according to executives including Old Dominion Freight Line CEO Marty Freeman, as did weight levels.
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ODFL loading docks in Montgomery, Ill. (Old Dominion Freight Line via YouTube)
ArcBest’s asset-based unit saw a 5% weight-per-shipment increase in May compared with April, the carrier said in a June 4 Securities and Exchange Commission filing. ABF Freight’s revenue per shipment improved by about 5% as a result, it added.
Capacity in the truckload sector has tightened since the start of 2026 as a result of federal government enforcement initiatives on non-domiciled commercial driver licenses, the closing of some driving schools and visas for overseas drivers.
Not short-term underlying developments
“The developments that reduced capacity in our industry aren’t short-term things,” Estes told Transport Topics in late June, adding that it was a “double whammy” with the removal of CDL owners and fewer driving schools to fill already thinning ranks.
FedEx Freight — the largest player in the LTL segment of the freight market — saw particular benefits in backhaul lanes, CEO John Smith told analysts June 25 during the company’s first earnings call as a stand-alone entity.
Memphis, Tenn.-based FedEx Freight was spun off by FedEx Corp. on June 1. FedEx Freight debuted at No. 4 on the Transport Topics Top 100 list of the largest for-hire carriers in North America. FedEx Corp. remained the No. 2-ranked carrier.
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"[LTL is] kind of the meat of the sandwich in the trucking industry," Estes said. (DakotaSmith/Getty Images)
With demand and shipment weight rising, contract rates are increasing after spot rates started climbing at the beginning of 2026.
Rates for LTL customers of ArcBest and ABF Freight increased 5.9% on average June 22. ArcBest ranks No. 14 on the for-hire TT100, and ABF Freight ranks No. 7 in the LTL segment.
Saia on July 6 said Saia LTL Freight was implementing a general rate increase of 7.1% on LTL and truckload shipments effective immediately.
The rate increase will also help offset rising operating costs, said Saia, which ranks No. 18 on the for-hire TT100 and No. 6 in the LTL segment of the market.
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Earlier this month, Saia announced a 7.1% GRI on LTL and truckload shipments. (ablokhin/Getty Images)
Carriers and shippers can expect a few bumps on the freight market’s road to recovery, even as rates continue to climb, FedEx Freight’s Smith told TT in an exclusive interview before the carrier went public.
“We see green shoots, but with everything going on from a geopolitical perspective, I think there is truly opportunity for the market to turn,” Smith said, but he told TT: “We don’t expect the recovery to happen in a straight line.”
A more focused FedEx Freight?
But LTL competition will also be fiercer in the second half of 2026, with a stand-alone FedEx Freight looking to chase down rivals in segments in which it has historically underperformed its lofty pedigree, and a major new player entering the market.
FedEx Freight aims to increase its slice of the pie in the small- to medium-size business, grocery, healthcare, and data center and energy segments.
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FedEx Freight — the largest LTL carrier — has seen particular benefits in backhaul lanes. (Jon Tetzlaff/Getty Images)
The carrier has only minimal penetration in the $9 billion small- to medium-size business sector of the LTL market, Chief Specialized Services and Commercial Officer Mike Lyons told analysts and investors during the carrier’s first investor day in April.
“Basically, we’re doing zero business in the food and beverage marketplace,” Smith told TT in late May. “We feel like that that’s one of the markets that does good, whether the market is good or the market is down due to the fact that people are going to eat and people are going to drink.”
Meanwhile, there’s a new player in the LTL arena, and it too boasts a vaunted pedigree.
Amazon arrives
Amazon formally unveiled an LTL arm for its Amazon Supply Chain Services division June 10, expanding its operations in the LTL segment beyond the e-commerce giant’s own marketplace.
The announcement followed ASCS’ Amazon Freight unit stepping out of the shadows May 4. The unit will make Amazon’s transportation, fulfillment and parcel delivery network available to other businesses.
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Amazon unveiled its ASCS LTL division in June. (Trevor Srednick/Getty Images)
Amazon already has LTL experience. In 2019, Amazon LTL began serving Amazon sales partners and vendors. Amazon LTL will offer next-day live pickup for orders placed by 5 p.m., same-day pickup through Amazon’s drop-trailer solution and standing daily pickups for high-volume shippers.
However, analysts noted a relatively low number of service terminals compared with existing players, indicating a more asset-light model for the venture than is typical in the sector. Estimates on the company’s cross-dock facilities come in under 100, compared with an average of nearly 300 for the top five players in the space.
Terminal buildout continues
Existing players opened additional terminals in order to meet the growing demand and extend their entrenched advantage.
Saia opened two terminals in the Midwest in June, its fourth and fifth service center additions since the start of 2026. Saia now operates 218 terminals.
Johns Creek, Ga.-based Saia’s Duluth, Minn., terminal opened early in June, and the Columbia, Mo., facility began operations in the week starting June 22. The carrier also opened terminals in Marysville, Wash., and Edinburgh, Ind., in May and a 74-door terminal in York, Pa., in April.
Terminals require a great deal of land — something not easy to find near metropolitan areas — and are expensive to build. Marysville, for instance, is part of the Seattle metropolitan area. Scale and density tend to be vital in the LTL space.
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Averitt recently began construction of new regional campuses. (photosvit/Getty Images)
Averitt Express began construction of two new regional campuses in Charlotte, N.C., and Louisville, Ky., in May, as part of an upgrade of facilities in key locations for the carrier.
Both locations were identified by a senior executive in March as potential “pinch points” as the freight industry rebounds. Averitt ranks No. 29 on the for-hire TT100 and No. 12 in the LTL segment.
Looking forward, prospects are positive for the LTL segment, according to Smith. “We believe the long-term fundamentals of this industry, the LTL industry, remain attractive,” he told TT.
