SAIA Tonnage Surges
SAIA reports a 13% y/y increase in shipments
Following the shutdown of LTL carrier YRC (Yellow), Saia reported Tuesday that shipment average per day increased 13% through the initial two weeks of August.
Yellow Corporation, once a formidable force in the LTL market, has faced financial challenges for several years. Despite attempts to restructure and improve profitability, the company eventually reached a point where it could no longer sustain its operations. This has been beneficial for competitors of Yellow as they are collectively reporting large increases in shipment count.
While YRC's downfall might have been seen as a setback, it unexpectedly paved the way for growth among its competitors. The LTL market is highly competitive, and with one major player bowing out(11% of market share), other carriers saw an opportunity to expand their market share.
- Capacity Redistribution: With YRC's fleet no longer operational, the capacity that was once allocated to its shipments became available. Other LTL carriers quickly moved to absorb this surplus capacity, allowing them to handle more shipments and larger tonnages.
- Customer Migration: YRC's customers needed alternative options to fulfill their shipping needs. As a result, they turned to other established LTL carriers, leading to an influx of new business for these companies.
- Pricing Adjustments: With a major player out of the picture, LTL carriers found themselves in a more favorable position to adjust their pricing strategies. They could offer competitive rates while maintaining profitability, attracting both YRC's former customers and those looking for reliable alternatives.
Saia reported that when the Yellow rumors where making their rounds they saw an increase of 6% in shipments in July vs July 2022. Prior to the Yellow bankruptcy Saia was down 4% in shipments in the 2Q. Saia's daily tonnage has increased 6% in August, while the average shipment weight decreased by 6%.
The collective reporting of LTL carriers impact from YRC's ceasing of operations follows:
| YRC Fallout | Carrier Summary (July) |
|---|---|
| ABF Freight | 10% Increase in shipments at core accounts |
| Forward Air | 7% y/y increase in tonnage |
| Old Dominion | 6% increase in shipments |
| Saia | 13% y/y increase in shipments |
| XPO | 9% y/y increase in shipments |
| TForce | 13% increase in shipments |
All LTL carriers have noted impact from Yellow with Saia and TForce reporting the largest increases in shipments as a percent of total shipment count. Carriers are collectively reporting approximate shipment counts increasing by 3,000 shipments/day.
XPO has advised that they plan on increasing network capacity due to meet the additional demand.
The LTL industry is a dynamic landscape where the departure of one major player can lead to unexpected shifts in market dynamics. YRC's ceased operations, while unfortunate for the company itself, have triggered a series of positive developments for other LTL carriers. Through capacity redistribution, network optimization, customer migration, and pricing adjustments, these carriers have seen remarkable growth in their daily shipment counts and total tonnage. Carriers are taking actionable changes due to the increased volume such as XPO expanding, and Forward Air merging. This industry reshaping not only benefits the carriers directly involved but also sets the stage for a more competitive and customer-focused LTL market in the years to come.
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