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Current LTL Environment and LTL Carrier GRI’s

It’s an exciting period for the LTL industry, which is seeing new growth and interest as the transportation market learns from 2020.

Photo of pallets being loaded onto a truck

It’s a really good time to be a carrier in today’s LTL marketplace.

There are several reasons. The first is pricing and unlike the fragmented truckload sector where the largest carrier, Knight-Swift, barely controls 1% of the TL market, there is concentration atop the LTL marketplace. The top 25 LTL carriers account for nearly 90 percent of the marketplace. In fact, FedEx Freight and Yellow Freight control almost 25% of it themselves.  The bigger question for LTL executives, as well as shippers is….. will it last?  In the past bullish LTL markets, one or two large LTL carriers would exhibit poor pricing discipline and that would drag the market downward.  Today, carriers are employing a high level of discipline to ensure their GRI’s stick and that they are maximizing contractual increases.

Another big reason is that the LTL carriers are enjoying significant headwinds due to the retail boom in ecommerce.  Historically, retail has been relatively ignored by the LTL carriers.  It’s recent boom, in large part due to covid and consumers shopping from home, eliminated their ability to ignore retail.  There is no doubt that retail is going to continue to grow and LTL carriers need to pay attention.  Those who don’t will find themselves with a smaller share of the available growing LTL market.  

So, what does this all mean.  It means that LTL carriers have shrinking capacity and with tight capacity comes increased rates and overall pricing discipline.  Regarding increasing rates, here is a list of some prominent LTL carriers and their 2021 GRI’s.

FedEx Freight…………….4.9% to 5.9%…….1/4/21
SAIA………………………….5.9%…………….1/18/21
Yellow Frt……………………5.9%……………..2/1/21
Estes………………………..4.6%………………2/1/21
UPSF………………………..5.4%……………..2/22/21
ODFL………………………..4.9%……………..3/1/21

As carriers become more particular about what freight they handle and are more disciplined in the rates they charge shippers, it’s more important than ever to have GMT help manage their networks, stay abreast of industry trends and ultimately to mitigate cost. Learn more about our LTL Spend Management solution today – plan, execute, and monitor your LTL spend like never before.

Photo of pallets being loaded onto a truck

 Written by Jim Badovinac


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