LTL market stays soft as 2026 rates edge higher

The less than truckload (LTL) market continues to experience an extended freight recession, with varying degrees of tonnage and volume declines across the industry. This softness in demand is expected to persist, driven by seasonal slowdowns and low confidence in the manufacturing and industrial sectors.

As truckload capacity tightens and rates rise, some smaller shipments are likely to shift back into the LTL market, though the timing and impact on LTL carrier networks remain uncertain. Another factor in LTL capacity is that bankrupt carrier Yellow is approaching the end of selling its terminals. Some were bought by other carriers, but not all of that capacity is expected to re-enter the market.

Mid-single-digit rate increases are anticipated in 2026, consistent with the nearly 5% year-over-year growth in the LTL Producer Price Index observed over the past three decades. While raising rates in a sluggish market may seem counterintuitive, the limited pool of LTL carriers positions them to recover higher operating costs such as labor, insurance, and equipment.

Across the industry, there is a strong focus on cost control and operational efficiency to mitigate margin pressures. Carriers are increasingly investing in technology and AI initiatives to enhance productivity, optimize routing, and strengthen long-term profitability. These efforts position LTL carriers to take on more volume when macroeconomic factors improve.

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