LTL market remains stuck in freight rut as carriers brace for prolonged softness

In a recent conversation I had with a less-than-truckload (LTL) stakeholder, I was not entirely surprised about the way in which he described the current state of the LTL market.

That is largely related to the ongoing narratives about market conditions, in the form of things like low, or reduced, demand, tariff- and trade-driven uncertainty, inflation, the employment outlook, and an ongoing manufacturing slump.

“LTL market trends are getting worse and carriers have freight recession malaise, and chinks in their pricing armor, with carriers trying to protect their turf, and with some carriers desperate for more freight to fill networks,” I was told by the LTL stakeholder. “That said, pricing is still strong but not as strong as it has been in the past. Potential positive trends for 2026 include: durable goods inventories are low and need restocking and can serve as an LTL growth catalyst, as well as more domestic industrial capacity coming online—driven by pandemic—can help drive volumes more than import growth, maybe on the truckload side, too.”

At the CSCMP EDGE conference earlier this month, Pitt Ohio VP of Sales Al Webb said that the LTL market is exhausted, due to the freight recession. And he added that it is a good time for shippers to negotiate pricing.

“The market is very top-heavy, with the top 20% of LTL carriers representing 90% of the market,” he said. “Looking ahead, there is a chance the market could shrink to 15 dominant carriers, with the strong getting stronger and weaker ones maybe not making it.”

These respective comments, in a sense, could serve as a proxy, in terms of the LTL market, for sure. And that was reflected in some earnings releases issued this week by publicly-traded LTL carriers, with some common themes being revenue and volume declines, largely due to some of these aforementioned reasons or drivers.

In its third quarter earnings release, Marty Freeman, President and CEO of Old Dominion Freight Line (ODFL), widely considered an LTL sector market leader, said that the company’s third quarter revenue decline—down 4.3% annually, to $1.4 billion—is, “indicative of softness in the macroeconomic environment.”

To that end, though, he added that ODFL is the best positioned carrier to respond to a positive inflection in demand when it materializes.

When demand turns positive, though, clearly remains to be seen, of course.

Another major national LTL carrier, XPO, also cited the ongoing soft freight market, in its earnings release this week, even though its third quarter revenue saw a 2.8% annual gain, to $2.1 billion.

On its earnings call, XPO Chief Strategy Officer Ali Faghri observed that Q3 shipments per day and weight per shipment saw annual declines of 3.5% and 2.7%, respectively, with tonnage per day off 6.1% annually. But, despite those declines, Faghri noted that both shipments and tonnage per day improved annually compared to the second quarter. Which he described as a positive trend XPO expects to continue in the fourth quarter.

XPO CEO Mario Harik offered up some insights as to what 2026 could look like for the LTL market and, by extension, XPO.

“If you look at next year, obviously we do expect a strong year of both OR [operating ratio] improvement and earnings growth in 2026 and this is even in the current soft macro environment,” said Harik. “Without assuming any macro recovery yet, which is not what we’re hearing from customers by the way. We’re hearing more and more from customers that they do expect a recovery in 2026, but we’ll see what the macro has in store. Even without the macro recovery, we do expect to improve OR meaningfully and the earnings as well.”

While ODFL and XPO are two of the most well-positioned and capitalized LTL carriers—and can likely deal with a down market better than most of its LTL brethren—TD Cowen analyst Jason Seidl said in a research note that the industrial economy continues be a drag for LTL carriers, with quarter-to-date trends suggesting further softening. And he also observed that LTL industry tonnage has a long way to recover with volumes double digits off its prior peak.

Baird analyst Dan Moore said that LTL volumes tend to show a higher correlation with the ISM (manufacturing) index, which has been in contraction for 32 of the past 35 months.

“We suspect this trend has been further influenced by the recent government shutdown and the earlier front-loading of inventories,” noted Moore.

Given the myriad of challenges facing the LTL market, it is likely that current market conditions are likely to remain intact, barring a true indication of a demand catalyst. In recent years, especially amid the ongoing freight slump, or recession, that has been missing, and it still is today. We have gotten used to various stakeholders calling for market improvements “next month, next quarter or the second half of next year,” but it has yet to truly come to fruition. Until then, LTL industry stakeholders will continue to navigate the market with a close eye on operating costs, volumes, assets, and pricing until clear signs of a shift come into view.