Dive Brief:

• Old Dominion Freight Line's August revenue per day increased 29.1% compared to August 2020, the company said in an update Tuesday. It's a sign the LTL market is booming. The carrier said a 10.9% increase in LTL tons handled per day contributed to the revenue surge.
• August LTL shipments per day flowed into Old Dominion, helping to fuel the surge. Company officials reported a 17.3% YoY increase in LTL shipments per day in August, partially offset by a 5.5% decrease in LTL weight per shipment. ArcBest also reported an August jump. "Daily August 2021 revenue, tonnage and shipments in the asset-based core LTL-rated business were some of the strongest in the last 10 years."
• Greg Gantt, Old Dominion president and CEO, said even with an economic rebound, there are warning signs for the industry and the nation. One of those signs was a rise in COVID-19 cases caused by the delta variant. Gantt also warned of supply chain woes vexing the industry. The company's growth, Gantt said, "was affected by the recent rise in COVID-19 cases as well as various other matters impacting customers' supply chains throughout the country."

Dive Insight:

Old Dominion's update indicates there is no letup in the LTL sector. Consumer demand is still strong, and capacity is tight, which makes the market ripe for profit-making.

But it also means LTL carriers have to make tough decisions to preserve quality. On Wednesday, ArcBest noted in a filing with the Securities and Exchange Commission that it took action to decrease its tonnage to keep service to core LTL customers stable. ArcBest called this "deliberate moderation."

LTLs are picking the freight that can deliver the most profit, said Cathy Morrow Roberson, president of Logistics Trends and Insights. But Roberson warned that the high end of the cycle doesn't last, and customers who are turned down will remember.

Shippers are now learning to go beyond the big LTL firms and consider other options, Roberson said.

"Sit down with your LTL provider and come up with a solution," said Roberson. "There are options, and shippers need to be aware of these options."

One option could be 3PLs, Roberson said.

For the LTL sector, the Old Dominion and ArcBest news will likely not be surprising. In a call with investors and analysts on June 24, Lance Moll, president and CEO of FedEx Freight, said TL division was at capacity, and that kind of freight was spilling over into LTL.

TL divisions are five times the size of LTL divisions, Moll said. And when spillover happens, much of that freight likely goes to some of the big LTL fleets first — FedEx Freight, Old Dominion, XPO, ArcBest and Saia.

FedEx Freight declined to comment on its August activity, with a spokesperson saying it will file earnings on Sept. 21.