When we say it’s been a really big 2021 for the LTL market, we mean it quite literally.
Earlier this month, Central Freight customers got an unwelcome holiday surprise when the longtime regional carrier announced plans to shutter operations after 95 years in business.
Meanwhile, over in Phoenix, Knight-Swift Transportation Holdings announced that it had acquired MME (the two companies formerly known as Midwest Motor Express and Midnight Express) for $150 million.
These two events were the latest of several seismic LTL shifts in a year that has been full of them:
- In July, Knight-Swift officially entered the LTL market with the $1.35 billion acquisition of regional trucking mainstay AAA Cooper.
- In May, Road Runner Freight received a much-needed $50 million infusion of cash from a private equity investment firm.
- And on April 30, TFI International completed its acquisition of UPS Freight, an $800 million deal that was announced in late February.
This hyper-consolidation is good news if your company prefers to work with a small universe of carriers. However, it’s anything but that for your bottom line, because with the Top 10 carriers now controlling nearly 75% of the market capacity – and counting – your LTL shipping options and ability to get better rates are rapidly diminishing.
Keep this in mind as you approach the start of 2022, because as the new year begins, it’s not just going to be a carriers’ market, it’s going to be a mega-carriers’ market. These changes have created an LTL industry environment unlike any we’ve experienced in over a decade – and have greatly impacted the landscape of carrier operating leverage. In fact, we’re already seeing that reflected in carriers’ GRI announcements, which are clocking in earlier and higher than usual.
We’ll talk more about this trend and how AFS can help you more successfully navigate it in an upcoming blog. Until then, feel free to give us a call if you’d like to discuss your LTL opportunities and pain points. We’re always happy to hear from you, and we always enjoy a good transportation challenge.
Photo Editorial Credit: Jonathan Weiss / Shutterstock.com