Sunday, November 1, 2026
The news that moves freight
Ocean Nov 1, 2026 · 7 min read

FedEx Freight’s share jump and Schneider’s one bad claim

FedEx Freight’s 14% jump prices in rate rises its customers have not paid yet

FedEx Freight shares rose about 14% in early trading on Friday 30 October. Reuters reported that the stock was on track for its biggest one-day gain since it listed on 1 June, after the spin-off from FedEx. It was also heading for its first monthly gain. The trigger came the day before. The company raised its adjusted operating profit outlook for the seven months to December to $695m to $715m, from $605m to $645m (Yahoo Finance).

Our view is simple. Investors are paying today for price rises that FedEx Freight’s customers have not yet paid. The company’s base-rate growth is still the weakest of the big US LTL carriers. LTL means less-than-truckload: freight that shares a trailer with other shippers’ pallets. That gap is real, and it is closing. Forwarders who buy US domestic distribution should use it while it lasts.

What the numbers say about price

Start with the headline revenue. FedEx Freight’s revenue for the four months to September rose 9.2% to $3.3bn, Yahoo Finance reported. The company’s quarterly filing gives $3,281m against $3,004m a year earlier.

Much of that came from fuel, not base price. Revenue per hundredweight rose 8.6%. Revenue per hundredweight is what a carrier earns for every 100 lb it moves, and it is the standard way LTL carriers report price. Strip out fuel surcharges and the rise was only 0.3% (Yahoo Finance). Revenue per shipment, excluding fuel, rose 1.1%.

Compare that with the rivals’ latest quarters, again as reported by Yahoo Finance:

  • Old Dominion: base revenue per hundredweight up 5.1%, shipments per day down 2.0%, operating income up 25.4%.
  • XPO: North American LTL yield excluding fuel up 3.6%, shipments per day up 5.8%.
  • Saia: revenue per shipment excluding fuel up 5.8%.

In plain terms, the other three pushed base price up between 3.6% and 5.8%. FedEx Freight barely moved its own. For a forwarder buying LTL, that means FedEx Freight’s base rate has risen the least of the four.

Profit tells the same story. In the July–September quarter FedEx Freight made $253m of operating income, down from $290m a year earlier, according to its 10-Q filing. By our arithmetic from that filing, its operating ratio worsened to 89.6% from 87.2%. The operating ratio is costs as a share of revenue, so lower is better. Part of the drop is one-off. The filing shows $105m of separation and other costs in the quarter, against $30m a year earlier. Reuters also cited separation costs and technology upgrades as drags on short-term earnings.

Why investors still bought

The market is looking forward, not back. Chief executive John Smith gave investors the line they wanted: “Since June 1, we have successfully renewed approximately 25% of our contractual portfolio” and “achieved our strongest renewal pricing performance in recent years” (Yahoo Finance).

That is the key point for buyers. About a quarter of the contract book has been repriced since 1 June, at the best levels in years. The other three quarters has not. Each renewal from here is a chance for FedEx Freight to close the gap with Old Dominion and Saia.

Analysts agreed. Jefferies said the company’s ability to meet its medium-term targets is “becoming more achievable,” Reuters reported. Evercore ISI said the fourth-quarter guideposts for key revenue drivers appear to signal improvement on the third quarter and the first half, according to the same report.

Management also set out the path. Chief financial officer Marshall Witt said 2027 revenue growth would be in line with the company’s 4%–6% medium-term target, with adjusted operating margin moving toward 15% (Reuters). On the raised outlook, he credited “fuel tailwinds and slightly higher volume assumptions” (Yahoo Finance). Witt also said some customers are bringing their suppliers along, which could add volume (Reuters).

Then there is list price. FedEx Freight’s 6.9% GRI takes effect on 8 January, Yahoo Finance reported. A GRI, or general rate increase, lifts the published tariff. It mainly hits shippers on tariff pricing and contracts tied to tariff discounts.

Note what drove the upgrade, in the CFO’s own words: fuel and volume. Base price is the story investors are betting on, not yet the story in the accounts.

Trucking is tightening too

Schneider National’s third-quarter results, released on 29 October, point the same way for truck capacity. Schneider is one of the largest US truckload and intermodal carriers. Intermodal means a container moved mostly by rail, with trucks at each end.

Schneider ran an average of 11,347 trucks in its truckload business, down from 12,291 a year earlier. That is about 8% fewer. Yet revenue per truck per week rose 8% to $4,252. Truckload operating income more than doubled to $43.7m, from $19.8m, and its operating ratio improved to 93.0% from 96.8%. The company said the gain came from “improved Network price and productivity”, among other things.

Intermodal moved fewer loads: 114,619 orders, against 116,592. But revenue per order rose 3% to $2,486, and operating income rose to $22.6m from $16.8m. Schneider put the higher revenue down to “an increase in price, partially offset by a decrease in volume.” Chief executive Jim Filter said intermodal earnings growth was “supported by our differentiated offering and proactive price actions.” Schneider also announced a new agreement with Norfolk Southern the same day.

Its guidance tells the story too. Schneider raised its 2026 adjusted earnings per share guidance to $1.00 to $1.10. Chief financial officer Darrell Campbell said: “Our outlook anticipates continued contract rate recovery, further benefits from our productivity and cost initiatives”. He also noted that “peak season demand and driver capacity remain important variables”.

The brokerage hit: one claim and dearer trucks

The eye-catching line in Schneider’s results was brokerage. Its Logistics segment, which arranges loads on other carriers’ trucks, grew revenue excluding fuel by 12% to $372.5m. But operating income fell to zero, from $6.4m. Its operating ratio hit 100.0%, which is break-even.

It would be easy to read that as claims costs swamping US brokers. We do not think the filing supports that. Schneider said the fall was “driven by higher purchased transportation costs” and “increased insurance expense related to a specific prior year claim”. Group-wide, insurance and related expenses actually fell to $49.4m, from $60.1m a year earlier. Filter said that “the underlying business continued to improve” despite the claim costs.

The more lasting point is the first one: purchased transportation. Brokers pay trucking companies to move the freight, and that cost is rising. Group purchased transportation rose to $590.4m from $505.4m, according to Schneider’s filing. When carriers shrink fleets and push price, brokers get squeezed in the middle. In our view, brokers will pass that through to shippers at contract renewal rather than absorb it.

What this means for forwarders

For forwarders and NVOCCs (non-vessel operating common carriers) buying US domestic legs for import freight, we see three things to do.

First, treat FedEx Freight’s current base rate as a discount that is ending. About 75% of its contract book has not been renewed since 1 June. If your agreement is in that group, the renewal will likely carry a bigger base-rate rise than you saw in 2026. Negotiating early, and for a longer term, is worth testing.

Second, split base rate from fuel in every LTL bid. The FedEx Freight numbers show how fuel can make total revenue per hundredweight look strong, up 8.6%, while base price barely moved, up 0.3%. If you compare carriers on all-in rates alone, you will not see which part is moving.

Third, expect truck and intermodal contract rates to keep rising into early 2027. Schneider has fewer trucks, earns more from each one, and guides to “continued contract rate recovery”. Intermodal is getting more per box even on lower volume. Capacity that leaves a fleet does not come back quickly.

Our call

Our prediction: when the October–December quarter is reported in late January and February 2027, FedEx Freight’s ex-fuel revenue per hundredweight growth will still be below 2%, and Old Dominion’s will be at least 4%. We also expect XPO to report shipments per day up year on year again.

The renewal comments do not change that call. A quarter of the contract book renewing at better prices takes time to show up in the average. The 6.9% GRI lands on 8 January, after the quarter closes. The catch-up, in our view, is a 2027 story, not a fourth-quarter one. That means the cheapest LTL base rates in 2027 bids will still be at FedEx Freight. But the discount will be narrower by the second half of the year.

We also expect Schneider’s Logistics segment to return to an operating profit in the October–December quarter, reported in early 2027, because the third-quarter insurance hit was tied to one prior-year claim.

Sources