Dive Brief:
- Weights per shipment saw improvement in May across carriers, reflecting a healthier industrial environment.
- ArcBest’s asset-based segment, which features ABF Freight, led a group of mega carriers reporting results with a weight per shipment increase of 9% compared to a year ago. Old Dominion Freight Line, Saia and XPO also reported percentage point gains in the low- to mid-single digits.
- “We are seeing modest improvement in truckload-rated shipments, which, along with other changes in freight profile, is contributing to the higher weight per shipment,” ArcBest said in the update.
Dive Insight:
Manufacturing surveys have been reporting expansion sentiment, and carriers' mid-quarter data is backing up that trend, suggesting improvement in the market.
The heavier weight can reflect a more industrial-centric profile. But soft and sluggish demand has restrained growth, according to C.H. Robinson LTL freight reports.
The weight metric changes are part of a series of signals, though, possibly hinting at potential transitions.
“[D]emand has continued to improve as the quarter has progressed,” Old Dominion CEO and President Kevin “Marty” Freeman said in the carrier’s mid-quarter update.
The LTL industry has had challenging quarters as shippers have redirected freight to TL for savings. But improvements to LTL carriers’ volumes are coming forth as truckload capacity tightens, Uber Freight said in a Q2 report.
The producer price index for LTL long-distance, which measures prices from the sellers’ perspective as opposed to consumers’, has also been skyrocketing, according to federal data. But fuel surcharge receipts highly distort the measure, FTR VP of Trucking Avery Vise said in an email.
In providing the mid-quarter update, ArcBest’s LTL carrier, ABF Freight, noted performance improvements and revised its outlook.
“Historically, ABF’s non-GAAP operating ratio improves by approximately 350 basis points from the first quarter to the second quarter,” ArcBest said. “Based on current trends, we expect second-quarter performance to improve sequentially by approximately 600 to 700 basis points.”
