LTL’s paper gains

Chart of the Week: LTL Monthly Cost per Hundred Weight, Van Contract Rate per Mile – USA SONAR: LTL. USA, VCRPM1. USA The headline numbers look impressive. LTL all-in revenue per hundredweight is up sharply on SONAR’s LTL. USA index, with the current reading at $46. 13, well above the six-month average of $41.

31 and at its highest level in the five-year window shown in the chart above. LTL carriers, by one reading, are having their best pricing moment since the post-COVID freight boom. The orange line complicates that story, but not in the way it might first appear. Van contract rates per mile, VCRPM1. USA, bottomed out near $2.

25 per mile in mid-2025 after a multi-year freight recession that shed more than 20% from the 2022 peak. What has happened since is the part that matters: over the past eight months, VCRPM1 has staged one of its sharpest recoveries of the five-year period, climbing back to $2. 51 per mile and still trending upward.

That is not a number failing to confirm the LTL rally. That is a number setting up the next leg of it. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag. defineSlot('/21776187881/FW-Responsive-Main_Content-Slot1', [[300, 100], [320, 50], [728, 90], [468, 60]], 'div-gpt-ad-1709668545404-0').

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display('div-gpt-ad-1709668545404-0'); }); The fuel surcharge is the whole story for now First, the honest accounting of where the LTL gains actually came from. When diesel averaged $3. 50 per gallon in May 2025 — using a generalized fuel surcharge table that starts at 0. 5% when the DOE’s weekly figure is at $1. 20 and increases 0. 5% for every $0.

06 increment — fuel costs were estimated at roughly 19. 5% of the base linehaul rate. By May 2026, diesel had surged to $5. 60 per gallon, a 60% increase, pushing the surcharge to 37. 0%. On a median LTL shipment, that swing alone added more than $5. 80 per hundredweight to the invoice, more than accounting for the entire year-over-year all-in rate increase.

Strip the fuel surcharge out and the picture inverts. SONAR’s LCWT1. USA index, which tracks initial contract base rates on paid invoices with fuel excluded, shows base rates flat to slightly negative year-over-year.

Carriers have actually been cutting rates across nearly every freight class — Class 50 (dense, efficient freight) by as much as 21% — to compete for volume in what has been, beneath the fuel noise, a buyer’s market at the base rate level.

This is the defining characteristic of the current LTL moment: the all-in rate is at a multi-year high, the underlying rate is not, and the gap between them is almost entirely diesel. The Yellow exit set the floor That divergence did not begin in a vacuum.

The circled annotation on the chart marks the exit of Yellow Freight, the Yellow liquidation in mid-2023 that removed roughly 10% of U. S. LTL capacity overnight. The event was widely expected to produce an immediate repricing of the market. It produced a floor instead.

The remaining carriers — Old Dominion, Saia, XPO, ArcBest, Estes and others — absorbed the displaced volume with unusual discipline, holding GRI cadence steady and preventing the kind of base rate collapse that hit the truckload market during the same period. Look at the white line on the chart in the months immediately following that annotation. LTL.

USA held its level through late 2023 and into 2024 even as the freight recession continued — a notable divergence from the deep trough truckload rates were experiencing at the same time. The Yellow exit did not ignite an LTL pricing surge. What it did was ensure there was a base from which to launch one, once the broader freight cycle turned.

That turn is now visible on both lines of the chart simultaneously. The truckload recovery is the signal The VCRPM1 move of the past eight months is not a rounding error. Van contract rates fell from a peak above $2. 90 per mile in mid-2022 all the way to roughly $2. 24 per mile at the trough, a decline of more than 20% over nearly three years.

The recovery off that floor has now retraced approximately half of that decline in less than a year. The slope of the orange line since October 2025 is the steepest sustained upward move in the five-year window outside of the 2021-22 boom. window. googletag = window. googletag || {cmd: []}; googletag. cmd. push(function() {googletag.

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push(function() {googletag. display('div-gpt-ad-1665767553440-0'); }); This matters directly to L