LTL Pricing Rises Amid Freight Slowdown: PNG Offers Stability Through Strategy and Scale

US less-than-truckload (LTL) providers have demonstrated remarkable staying power during what has become an extended period of market volatility and soft freight conditions. For much of the last three years, the LTL sector has defied expectations by maintaining or even increasing contract rates despite broad-based declines in volume and a softening industrial economy. In the first quarter of 2025, this trend held firm yet again, with most LTL carriers reporting mid-single-digit increases in contractual rates, even as macroeconomic uncertainty began to weigh more heavily on overall shipping volumes.

The persistence of LTL rate inflation in a weak demand environment raises important questions for shippers and logistics partners alike. Several underlying dynamics help explain this seeming contradiction, including the persistent effects of supply-side shocks, structural changes in the carrier landscape, and the increasingly strategic nature of freight matching in today’s fragmented market. All of these elements have combined to keep upward pressure on LTL rates, even as total shipments have declined.

Among the most consequential events in recent LTL history was the 2023 bankruptcy and collapse of Yellow Corporation, which at the time was the third-largest LTL provider in the United States. The loss of Yellow’s capacity sent a shock through the market and tightened available supply almost overnight. While other carriers have since begun to acquire and reactivate Yellow’s terminals and assets, the net effect is still a system operating at reduced capacity compared to pre-2023 levels. This has allowed the remaining players—XPO, Saia, ABF Freight, Estes, and others—to maintain pricing discipline and recover rate increases despite the freight downturn.

However, new cracks are beginning to form beneath the surface. Saia’s leadership recently noted a shift in shipment patterns starting in late March, continuing into April, with a marked softening in volumes attributed to economic uncertainty and reduced purchasing activity by customers. During their Q1 earnings call, Saia’s CEO Frederick Holzgrefe stated that customers were “shipping less than normal” and adopting a more cautious stance toward forward ordering. The estimated revenue impact of these trends was pegged between $25 million and $40 million for the quarter.

This hesitancy is echoed across the industry. ABF Freight, a subsidiary of ArcBest, reported a 0.4% year-over-year decline in quarterly shipments, while their leadership emphasized that customer production levels were clearly slowing. Similar feedback emerged during industry webinars, including SMC3’s economic outlook, where analysts warned of a 60- to 90-day window of stalled economic momentum due to macro headwinds, trade friction, and persistent inflationary pressures.

A major factor driving this uncertainty is the renewed escalation in trade tensions, particularly between the U.S. and China. The Trump administration’s imposition of new and expanded tariffs—some exceeding 70% or even 100% on certain categories of Chinese goods—has led to disruptions in traditional supply chains. Initial frontloading of imports in early 2025 has now been followed by canceled purchase orders, reduced manufacturing output, and an increase in blank sailings. These developments are gradually working their way through the domestic logistics chain, creating a murky outlook for the remainder of the year.

Yet, LTL rates have continued their upward climb. According to data from the U.S. Bureau of Labor Statistics, the Producer Price Index (PPI) for long-distance LTL trucking rose 5.5% year-over-year in March. This index reflects both transactional and contractual pricing, validating carrier reports that first-quarter renewal rates were up between 4% and 6%. Analysts note that these increases reflect not just raw supply and demand dynamics, but also a more strategic pricing approach by carriers who are becoming increasingly selective about the freight they accept.

That selectivity is key. LTL carriers are becoming far more sophisticated in how they evaluate and price freight. Density, packaging, origin-destination lanes, accessorials, and service time windows are all scrutinized before pricing is offered. Shippers who can align their freight profiles with the operational strengths of a given carrier may still find savings, while those with inefficient or misaligned freight are likely to see significant increases. In one notable example shared by Mike Regan of TranzAct Technologies, a shipper who anticipated a 3–5% rate hike ended up receiving a 14% reduction after realigning freight lanes and service requirements with the right carrier network. This kind of optimization underscores the increasingly asymmetric nature of the LTL marketplace.

Despite volume declines of over 10% since 2022, carrier discipline has created a market that remains tight from a pricing standpoint. While LTL providers are not immune to a broader economic slowdown, they are somewhat insulated compared to truckload or port drayage services. This is largely due to the inventory buffer. As XPO CEO Mario Harik explained, LTL carriers typically handle goods that have already cleared customs and entered the U.S. distribution network. These goods often go into inventory before final delivery, allowing LTL networks to lag behind broader downturns in import activity. The more immediate impact, Harik said, comes later—when inventories drop and replenishment demand kicks in, or when diminished stock levels make it impossible to fill a full truckload, thereby pushing freight into the LTL space.

Another structural shift looming on the horizon is the National Motor Freight Traffic Association’s (NMFTA) planned overhaul of the LTL classification system. The NMFTA is pushing for greater use of density-based classification models, which will upend traditional class-based pricing in many commodity groups. For shippers, this change could result in unexpected rate increases, reclassification disputes, or billing errors if not proactively managed. The complexity of this transition further reinforces the need for detailed classification audits and ongoing compliance with NMFTA rules.

This is where having the right logistics partner can make all the difference.

PNG Logistics has positioned itself at the forefront of these industry developments by combining scale, specialization, and cutting-edge technology. Through its proprietary Transportation Management System (TMS), PNG offers customers real-time visibility, shipment optimization, and advanced analytics tools that enable better decision-making. More importantly, PNG’s team of seasoned logistics professionals understands the intricacies of LTL classification, carrier pricing models, and network alignment.

Unlike many providers, PNG doesn’t operate on a transactional model alone. Instead, it functions as a logistics partner—auditing freight, bundling volumes across its customer base, and leveraging those aggregated volumes to negotiate favorable rates and capacity with major carriers. This bundling approach—paired with predictive analytics, machine learning algorithms, and real-time rate optimization—gives PNG’s customers access to savings and service levels that would otherwise be out of reach, particularly for small and mid-size shippers.

In an era where simply booking LTL freight is no longer enough, PNG steps in to ensure that every shipment is not just moved, but moved smartly—classed correctly, priced efficiently, routed optimally, and delivered reliably. Whether it’s navigating tariff-driven supply chain shifts, adjusting to NMFTA classification reforms, or addressing capacity constraints following Yellow’s exit, PNG brings the capabilities, expertise, and scale needed to insulate shippers from volatility.

As LTL rates continue to rise and uncertainty grows around trade policy, production levels, and freight volumes, shippers face a landscape that is more complex and more difficult to navigate than at any time in recent memory. PNG Logistics, through its unmatched industry presence, strategic volume bundling, leading-edge technology, AI tools, and highly trained logistics specialists, is uniquely positioned to help minimize the impact of rate increases and market disruption. Our team is ready to engage, advise, and act on behalf of our customers—ensuring they remain competitive, compliant, and well-positioned for whatever comes next. To explore how PNG can support your business, contact us today at www.pngworldwide.com or call 717-626-1107.