LTL Rates Are at a Five-Year High — But Context Is Everything
On paper, the less-than-truckload (LTL) freight market is having one of its best pricing moments in years. According to SONAR's LTL.USA index, LTL all-in revenue per hundredweight currently sits at $46.13, well above the six-month average of $41.31 and at the highest point in the five-year window tracked by the data. For LTL carriers still absorbing the bruises of a prolonged freight recession, that number carries real weight.
But headline numbers rarely tell the full story in freight markets. To understand what's actually happening with LTL pricing — and whether these gains are durable — you have to look at the broader competitive landscape, particularly what's happening with van contract rates. The picture that emerges is nuanced, instructive, and has meaningful implications for both carriers and shippers navigating the rest of 2025 and beyond.
How We Got Here: The Multi-Year Freight Recession and Its Aftermath
The freight market spent the better part of 2023 and 2024 working through a painful correction. After the extraordinary rate environment of 2021 and 2022 — driven by pandemic-era demand surges, supply chain disruption, and a capacity crunch — rates across virtually every freight mode fell sharply. Van contract rates on SONAR's VCRPM1.USA index shed more than 20% from their 2022 peak, eventually bottoming out near $2.25 per mile in mid-2025.
LTL carriers were not immune to that environment, but they navigated it differently than their truckload counterparts. The LTL sector had already been reshaped by the collapse of Yellow Corporation in mid-2023, which removed a significant volume of capacity from the market almost overnight. That structural shift gave remaining carriers — including FedEx Freight, Old Dominion, XPO, and Saia — unusual leverage to push through rate increases even as the broader freight market softened. General rate increases (GRIs) became more frequent, and carriers began exercising greater discipline around low-margin freight, selectively shedding shipments that didn't meet profitability thresholds.
The result of all that discipline is now visible in the data: LTL revenue per hundredweight at a multi-year high, well above trend, and moving in the opposite direction from where many market observers expected rates to be at this point in the cycle.
The Van Contract Rate Recovery: A Complicating Factor
Here is where the narrative gets more complex. Van contract rates, which had been in a prolonged slump, have staged one of the sharpest recoveries in the five-year data set. Over approximately the past eight months, VCRPM1.USA has climbed meaningfully off its mid-2025 lows. That recovery matters for LTL carriers because the two modes compete for certain types of freight, particularly partial truckload shipments and freight that sits near the boundary of what qualifies as LTL versus volume LTL or truckload.
When truckload rates are depressed, shippers often find it economical to consolidate smaller shipments into full or partial truckloads, effectively bypassing the LTL network. That dynamic can suppress LTL volume even when LTL pricing itself looks strong. Conversely, as truckload rates rise — as they are now doing — the economics shift back toward LTL, and shippers who had temporarily migrated freight to the truckload side may begin returning it to LTL carriers.
This means the LTL rate strength seen in the current data could be reinforced rather than undermined by the truckload recovery. A tighter truckload market reduces the substitution pressure that has historically acted as a ceiling on LTL pricing power. For LTL carriers, that is a meaningful tailwind.
What LTL Carriers Are Watching Right Now
Despite the favorable pricing environment, LTL carriers are not resting easy. Several dynamics continue to command attention across the sector:
- Volume trends: High revenue per hundredweight is only half the equation. Carriers need sufficient freight density to keep their networks operating efficiently. If higher rates are being achieved partly by shedding lower-yield shipments, absolute volumes may not be keeping pace with rate gains.
- Operating ratio pressure: Fuel, labor, and equipment costs have not retreated proportionally from their peaks. Carriers are watching whether margin improvements match the rate improvements showing up in revenue metrics.
- New capacity entrants: The removal of Yellow's capacity was the catalyst for today's LTL pricing strength. But the question of whether new regional or national capacity enters the market — or whether existing carriers expand aggressively into Yellow's old lanes — remains open and could gradually erode current pricing power.
- Tariff-related demand shifts: Trade policy changes in 2025 have created uneven freight demand patterns, with some import-heavy lanes showing elevated volumes while others have softened. LTL carriers with diversified network footprints are better positioned to absorb these regional swings.
What This Means for Shippers
For shippers managing LTL budgets, the current environment calls for strategic rather than reactive procurement. Locking in contract rates while the carrier market still has appetite for volume commitments may prove more cost-effective than riding the spot market if rates continue climbing. Shippers should also revisit their freight classification practices — misclassified freight becomes significantly more expensive as base rates rise.
Additionally, shippers who shifted freight to the truckload side during the rate trough may want to model the economics of returning some shipments to LTL, particularly given that truckload rates are rising simultaneously. The gap between modes that once made truckload the cheaper option is narrowing, and in some lanes it has already closed.
The Bottom Line
LTL's paper gains are real — $46.13 per hundredweight is a genuine multi-year high, and the structural changes in the LTL carrier landscape mean that pricing discipline is likely to persist longer than it has in prior cycles. But the interplay with rising van contract rates adds an important layer to the story. A recovering truckload market could either channel more freight back into LTL networks or signal a broader demand environment that lifts all freight modes.
Either way, the freight market in the second half of 2025 is shaping up to be considerably more dynamic — and more expensive for shippers — than many anticipated entering the year. Carriers and shippers alike would do well to watch both the LTL.USA and VCRPM1.USA indices closely, because the relationship between those two lines will go a long way toward defining the freight pricing story for the months ahead.