LTL or less-than-truckload freight is expected to grow after the roller coaster experience of last year due to COVID-19. If you’re an LTL trucking provider, or if you work with one to transport goods for your business, here’s what you need to know about the impact that COVID-19 has had on this industry, as well as what to expect for the future.
The growth of the e-commerce market wasn’t entirely unexpected due to social distancing guidelines throughout the pandemic, but the extent of its growth was a surprise to many. Online shopping has provided a new way to buy goods and services from the comfort of home, and retailers aren’t the only ones who have shared in this growth—LTL trucking companies have, too. Increases in consumer spending and business investment result in more demand for the LTL market. LTL companies are seeing strong freight demand as retailers and manufacturers work to restock depleted inventories.
Currently, e-commerce accounts for only 8.9 percent of overall retail sales, which means there’s still plenty of room to grow. The outlook for every LTL trucking provider, in turn, looks incredibly promising.
There’s great opportunity for LTL companies, not only due to increased consumer demand and an economic rebound, but also because COVID-19 caused a trucking capacity crisis. Social distancing requirements and driver quarantines due to potential COVID-19 exposures have caused full truckload companies to lag behind the capacity that shippers are demanding. In response, LTL companies have stepped in to fill the void, reducing costs and saving time. Since LTL companies are more efficient, flexible, cheaper and streamlined, more and more retailers are looking to them to keep up with the increase in demand.
Yet another reason LTLs have seen success throughout the pandemic is the complexities involved with entering the market. The top 25 companies take the lion’s share of the revenue for this industry. Growing LTL carriers need to invest in new technologies to optimize capacity and reduce operating costs. Companies that harness new technologies allow them to provide better services to their shippers at reduced costs, boosting profit margins while keeping all involved parties satisfied.
The delta variant
While many people may have thought the end of the pandemic was in sight just a few short months ago, the delta variant has brought about many changes in outlook. As the variant spreads, there’s potential for more supply chain disruption, especially for manufacturers in Asia and North America. While it’s too early to tell how the variant will affect the LTL trucking industry, economists are keeping close watch on the situation, which will likely impact the industry throughout the rest of the year and into 2022.
COVID-19 has had a ripple effect on every industry and will likely continue to do so for years to come. For more information about the current state of the LTL industry, contact a professional LTL trucking provider like K-Way Express, Inc. Staying abreast of changes in the industry will allow retailers, shippers and carriers to work together to keep up with increasing demands in a rapidly-changing world.