SJ Consulting

The $66 billion less-than-truckload (LTL) market is facing a turbulent year, with tariffs and economic uncertainty significantly impacting profitability. Analysts predict a challenging environment for LTL carriers, who are dealing with supply constraints, changes to the National Motor Freight Classification (NMFC), and increasing pressure on pricing strategies.

A report recently issued by ShipMatrix, a subsidiary of Warrendale, Pa.-based SJ Consulting, points to an increasing shift in the parcel marketplace that is having an impact on the parcel duopoly of FedEx and UPS.

While demand remains tempered, the LTL sector is navigating challenges and positioning itself for growth as economic conditions shift.

We’ve assembled our annual panel of logistics and freight transportation analysts to share their insights on rate patterns in all the major transport modes in an effort to help shippers prepare their freight transportation budget for the coming year.

In a wide-ranging presentation at the SMC3 Connections conference, which was recently held in Colorado Springs, Co., Satish Jindel, principal of Pittsburgh-based SJ Consulting Group, took a deep dive into the current state of the less-than-truckload (LTL) market. Jindel addressed various aspects of the LTL market, including the impact of Yellow’s exit roughly a year ago, industry supply and demand, and opportunities for shippers, carriers, other stakeholders to work together, and changes in the parcel sector posing a threat...

The cessation of Yellow continues to have repercussions throughout the $58 billion LTL market. Now, a shuffling of the capacity equation is causing strategic changes, and shippers need to adapt to the new alignment of resources to find operational success.

ShipMatrix observed that based on its data of millions of parcels shipped during Cyber Week pointed to online orders being delivered “at levels better than in the last several years,” with the respective OTPs for FedEx, UPS, and the USPS, coming in at 97.8%, 98.0%, and 95.2%, respectively.

There is a sharp, telling contrast among yields of trucking companies, depending on which niche they are operating. An expected slow first half for freight demand has morphed into uncertain expectations for the rest of the year. Most truckload (TL) executives are hoping for a second-half rebound to make up for a below-par first half.

The firm said that average tally of parcels delivered per day came in at around 85 million, with OTP ranges for the three largest carriers—FedEx, UPS, and the United States Postal Service (USPS)—in similar territory, at 96.3%, 97.0%, and 96.2%, respectively.

The impact of e-commerce on freight transportation has been profound, and it’s not restricted to any single mode—in fact, all have been affected. What’s the reality and what does it mean going forward?

This data is based on millions of packages shipped via UPS, FedEx, and USPS.

Data recently provided to LM by ShipMatrix, a subsidiary of Pittsburgh-based SJ Consulting, pointed to mixed on-time performance (OTP) ranges, in June, for major parcel carriers, including UPS, FedEx, and the United States Postal Service (USPS).

Retail, e-commerce, carrier discipline driving revival

Data recently provided to LM by ShipMatrix, a subsidiary of Pittsburgh-based SJ Consulting, showed that major parcel carriers, including UPS, FedEx, the United States Postal Service (USPS), and were within similar ranges, for on-time performance (OTP) for May on an annual basis, whereas average daily volumes saw a bigger spread, to the upside.

Entitled the ShipMatrix 1st Class Parcel Service, the firm said that this offering is geared towards retail and e-commerce shippers that have been “capped” by the parcel duopoly of FedEx and UPS for the 2020 peak season. Some of the key aspects of this offering, according to ShipMatrix, include: no limit on parcel volume; no peak season surcharges; and an automatic money-back guarantee on packages that are not delivered within five days.