Summary
The LTL market is undergoing a near perfect storm because of the economic problems, technology improvements and significant competition from the expert integrators, FedEx and UPS.
Inventory levels have been pruned down and orders have increased providing a prognosis for increased growth. The bottom appears to have been hit and costs have been strongly cut.
Analysis
From the shipping customer standpoint, now is a great time to negotiate alliances and rates. Three year contracts are preferred, with minimal annual increases. We recommend a balance of either FedEx or UPS for quality (at a higher price) along with strong traditional regional providers. Make sure tracking, electronic rating, service coverage and specific ancillary surcharges (including fuel) are included.
Look for more M&A activity with possible big name failures.
A similar industry vertical for parcel, traditionally 1-150 pounds has only two major players left after three decades of competitive battle.
Technology will begin to supplant what has traditionally been a "relationship" business buttressed with lots of meals, drinks and good seats at major sport venues.
