The 2025 LTL Industry Outlook: A Turnaround on the Horizon for Less-Than-Truckload Freight
Introduction: The State of the LTL Market in 2025
The less-than-truckload (LTL) freight sector has faced a turbulent few years, with declining freight volumes, capacity shifts, and corporate restructuring shaping the industry. However, 2025 appears to mark the beginning of a turnaround, as industry experts anticipate a 1.6% growth in freight volumes, a renewed focus on strategic mergers and acquisitions (M&A), and a stabilization of market dynamics following two years of uncertainty.
With the closure of Yellow Corporation, one of the nation's largest LTL carriers, in 2023, the industry has been undergoing a period of recalibration, with major players adjusting their pricing models, service offerings, and operational strategies. But with increased investments in factory construction, industrial shipping, and evolving LTL classification standards, there’s an optimistic outlook for a steady and sustainable market recovery.
This article explores the key trends shaping the LTL industry in 2025, including projected freight growth, major corporate developments, rate increases, and technological advancements that will define the future of trucking logistics.
Projected Freight Growth: An Economic Shift in 2025
One of the biggest indicators of an LTL turnaround is the anticipated growth in freight volumes, driven primarily by nonresidential construction, industrial manufacturing, and sustained consumer demand.
Key Factors Driving LTL Growth:
Nonresidential Construction Investment:
The U.S. is experiencing a boom in factory construction, with nearly $235 billion invested annually—significantly higher than in previous years.
This increase is expected to create a higher demand for industrial shipments, benefiting the LTL sector, which specializes in smaller, high-margin shipments to multiple destinations.
Rebalancing of Freight Markets:
After two years of declining freight demand, ATA Chief Economist Bob Costello predicts a return to 1.5%-2% annual growth, signaling a slow but steady industry rebound.
Retail and Consumer Goods Replenishment:
As supply chains stabilize, LTL carriers are seeing increased demand for retail and e-commerce shipments, especially in last-mile and regional logistics.
Surge in Nearshoring:
Companies are increasingly shifting production closer to the U.S., reducing reliance on long-haul supply chains and creating higher demand for regional LTL carriers.
These economic factors indicate that while LTL won’t see a rapid boom, the industry is on track for a gradual, stable recovery—a promising outlook after years of uncertainty.
Key Corporate Developments Reshaping the LTL Industry
The LTL sector is undergoing significant corporate restructuring, with major players reevaluating their business models, acquiring competitors, and investing in service expansions.
1. FedEx Freight’s Spin-Off
One of the biggest developments of 2025 is FedEx’s decision to spin off its freight division, allowing it to operate as a standalone company.
Why is this important?
FedEx Freight accounts for over $10 billion in annual revenue and is a market leader in LTL shipments.
By separating from FedEx Express and Ground operations, the freight division can focus on profitability without being tied to the company’s struggling parcel business.
Analysts estimate the spin-off could create a market valuation of $30-$35 billion, unlocking shareholder value and allowing FedEx Freight to compete more aggressively in the LTL market.
2. Mergers and Acquisitions on the Rise
Following the collapse of Yellow Corporation, other LTL carriers have been racing to absorb market share, leading to increased M&A activity.
XPO Logistics and Old Dominion Freight Line have been expanding their service areas through strategic acquisitions.
Smaller LTL carriers are being acquired by regional trucking companies, consolidating market power.
Private equity investors have also entered the LTL space, seeking opportunities in technology-driven logistics companies.
With fewer LTL providers in the market, consolidation is expected to drive up rates but also increase efficiency and service reliability for shippers.
LTL Rate Increases: What to Expect in 2025
1. General Rate Increases (GRIs)
Carriers are implementing GRIs ranging from 5% to 8%, primarily due to rising operational costs:
Fuel Prices: Although diesel costs have fluctuated, overall fuel expenses remain high.
Labor Costs: A driver shortage and increased wages have led to higher payroll expenses for carriers.
Equipment and Maintenance: Carriers are investing in newer, more fuel-efficient trucks, leading to higher capital expenditures.
2. Capacity Rebalancing & Service Adjustments
Following Yellow Corporation’s exit, LTL carriers have had to redistribute freight volume, leading to:
Tighter capacity and longer transit times in some regions.
Higher surcharges for expedited and specialized LTL services.
Technology & Sustainability in the LTL Sector
2025 is shaping up to be a pivotal year for LTL carriers investing in technology and sustainability.
Automated Freight Management Systems: AI-driven logistics platforms are improving route optimization, shipment tracking, and load balancing.
Eco-Friendly Trucking Initiatives: More LTL carriers are transitioning to electric and hybrid trucks to meet sustainability goals.
Blockchain in Logistics: Companies are adopting blockchain-based tracking systems to ensure greater transparency in LTL freight movement.
Final Thoughts: What’s Next for the LTL Market?
2025 is shaping up to be a critical turning point for the LTL sector. With freight volumes projected to grow by 1.6%, major corporate moves like FedEx Freight’s spin-off, and increasing investment in technology and sustainability, the industry is stabilizing.
While rate increases and capacity rebalancing pose challenges, the overall trend suggests a more resilient and profitable LTL market.