Friday, October 30, 2026
The news that moves freight
Companies & Markets Oct 30, 2026 · 7 min read

US LTL third quarter: fuel lifts the price, base rates split three ways

US LTL’s base-rate gap is now the number to negotiate

XPO’s fuel surcharge revenue in North American less-than-truckload rose 66.5% to $323m in the third quarter, the company reported on 29 October. Less-than-truckload, or LTL, is the shared-truck network that moves pallets for many shippers at once, through terminals. In total, XPO’s North American LTL revenue rose 17.4% to $1.47bn. Excluding fuel, it rose 8.5% to $1.15bn.

That one line sums up this week’s US LTL earnings. Old Dominion reported on 28 October. XPO and FedEx Freight reported on 29 October. All three showed higher all-in prices. Underneath, the part of the price that is not fuel is moving very differently from one carrier to the next.

Our view is simple. Diesel is doing most of the pricing work in US LTL right now. The base rate, the part a forwarder or shipper can actually negotiate, has split into three tiers: Old Dominion is pushing it, XPO is nudging it while winning volume, and FedEx Freight is holding it almost flat. That gap matters more for 2027 bids than any headline yield figure.

What the three carriers reported

Start with yield. Carriers measure it as revenue per hundredweight, which is revenue per 100 lb of freight moved.

Old Dominion said its LTL revenue per hundredweight excluding fuel surcharges was $30.25 in the third quarter, up 5.1%. Its release says the rise came “as we continued to maintain our disciplined approach to yield management.” Including fuel, the figure rose 13.3%.

XPO reported revenue per hundredweight of $34.06 including fuel, up 12.0%, and $26.70 excluding fuel, up 3.6%. Its investor presentation shows the ex-fuel figure climbing through the year, from $25.71 in the first quarter to $26.09 in the second and $26.70 in the third.

FedEx Freight reported revenue per hundredweight of $44.03, up 8.6%, and $33.93 excluding fuel, up 0.3%. Revenue per shipment excluding fuel rose 1.6% to $318.23. These are FedEx Freight’s first results as a standalone company. They cover a one-off four-month period, June to September 2026, while it moves to calendar-year reporting. The comparisons are against the same four months a year earlier.

So the ex-fuel spread is wide: 5.1% at Old Dominion, 3.6% at XPO, 0.3% at FedEx Freight. Including fuel, the three look much closer.

Fuel’s role is clearest at XPO. Its LTL fuel surcharge revenue went from $194m to $323m. Total LTL revenue went from $1,255m to $1,473m. By our arithmetic from XPO’s figures, fuel accounts for about $129m of the $218m gain, or roughly 59%.

Profit improved at all three. Old Dominion’s operating ratio was 71.5%, 280 basis points better than a year earlier. The operating ratio is costs as a share of revenue, so lower is better, and 100 basis points is one percentage point. XPO’s LTL adjusted operating ratio was 80.1%, 260 basis points better. FedEx Freight’s adjusted operating income rose 16.4% to $510m, a 15.5% margin. On a reported basis, after $127m of spin-off costs, its operating income fell 6.1% to $383m.

Volume: one carrier gaining, two still shrinking

Volume tells a different story from price.

XPO’s shipments per day rose 5.8% to 52,988. Pounds per day rose 5.0% to about 68.5m. Weight per shipment slipped 0.7% to 1,293 lb.

Old Dominion’s shipments per day fell 2.0% to 43,332. Tons per day were almost flat, down 0.1% at 32,194, because weight per shipment rose 1.9%. Chief executive Marty Freeman said: “Demand for our service improved during the quarter and our LTL tons per day increased on a year-over-year basis in September.”

FreightWaves put numbers on that. It reported Old Dominion’s tonnage down roughly 1% in July and August, then up 1.6% in September, with a modest increase in October. It also pointed out that the comparison is easy: Old Dominion’s tonnage fell 10.7% in the fourth quarter of 2025.

FedEx Freight’s average daily shipments fell 1.4% to 88,900. Tonnage per day was flat at 41,700 tons.

Put together, XPO is taking shipments while Old Dominion and FedEx Freight are not growing. XPO’s chief executive Mario Harik said the company is “improving revenue quality with higher-margin freight as customers value our world-class service.” He also said that “on the cost side, we’re operating more efficiently by expanding the use of AI across our network.” XPO gave no figures for what AI has saved.

The market was not impressed by Old Dominion’s turn. FreightWaves reported its shares down 5.5% at noon on 28 October, while the S&P 500 was up 0.2%. The same report paraphrased management as saying a more material demand inflection is still needed for upcycle-like results.

What happened a year ago

A year ago these businesses looked very different. In the third quarter of 2025, FreightWaves reported that XPO’s LTL tonnage per day fell 6% and shipments per day fell 3.5%, and its adjusted operating ratio was 82.7%. Harik said at the time: “Our intense execution is resulting in record service quality and margin expansion at the trough of the cycle.”

Twelve months later XPO has gone from shrinking volume to 5.8% shipment growth, and its operating ratio has improved another 260 basis points. Industry pricing has held through the downturn: XPO’s own investor deck notes “positive YoY industry pricing growth for over a decade.”

General rate increases are part of that. A GRI, or general rate increase, is a carrier’s across-the-board rise in list tariff rates. FreightWaves reported in September that Old Dominion brought forward a 4.9% GRI to 5 October, a month earlier than the year before. Saia moved a 7.1% increase to 6 July, and ArcBest put through 5.9% from 22 June. Old Dominion’s vice president of pricing services, Greg Lawrence, said “this GRI is designed to help offset continued cost pressures”, naming real estate, equipment, technology, and wages and benefits. Carriers are not waiting for demand before raising list prices.

What the outlooks say

FreightWaves reported that Old Dominion guided to a fourth-quarter operating ratio of about 73.5%, which would be 320 basis points better than a year earlier, and revenue of $1.54bn to $1.58bn, against a $1.51bn consensus. The company’s release says it expects 2026 capital spending of about $380m, including roughly $180m for real estate and service centres.

FedEx Freight guided fourth-quarter revenue of $2.30bn to $2.37bn, against $2.07bn a year earlier, and adjusted operating income of $185m to $205m, against $162m. For June to December it raised its adjusted earnings per share range to $2.80 to $2.90 and cut its reported operating income range to $465m to $485m, from $475m to $515m. Chief financial officer Marshall Witt said: “Underlying performance was largely in line with our expectations”. The company said it is “on track to announce its dividend and share repurchase plan for calendar year 2027, subject to board approval.”

XPO gave no numbers for the fourth quarter. It kept 2026 gross capital spending at $500m to $600m and its targets to 2027, including at least 600 basis points of LTL operating ratio improvement from 2021. It bought back $150m of shares in the quarter.

What this means for forwarders and shippers

First, split the bill. If fuel is driving most of the all-in increase, the fuel surcharge table is where the money is. Ask each carrier for its surcharge schedule, which diesel index it tracks, and how often it resets. A carrier with a flat base rate and a steep fuel table can cost more than one with a higher base rate.

Second, use the base-rate gap. FedEx Freight’s ex-fuel yield is up 0.3% while its shipments fall. It has an obvious reason to win freight in 2027 bids, and a new set of shareholders watching its margins. In our view, it is the carrier most likely to trade base rate for volume. Old Dominion, at 5.1%, is charging for service and is unlikely to move much. XPO sits in between and is already gaining share.

Third, do not plan on spare capacity. Old Dominion’s tonnage only turned positive in September, and against an easy comparison. Volumes are flat to slightly up, but every carrier is still pushing price and investing in terminals. If industrial demand does pick up in 2027, the network will tighten from a high price base.

Fourth, watch weight per shipment. XPO’s fell slightly while Old Dominion’s rose 1.9%. Heavier shipments usually point to industrial freight coming back. That is the early signal of the demand turn all three carriers say they are waiting for.

Our call

Our prediction: when the three carriers publish fourth-quarter results in late January and February 2027, Old Dominion’s ex-fuel revenue per hundredweight growth will still be at least 4%, and FedEx Freight’s will stay below 2%. We also expect XPO to report shipments per day up year on year again. If that gap holds, the cheapest base rates in 2027 bids will be at FedEx Freight, and forwarders who negotiate base rate and fuel separately will see the benefit.

Sources