LTL carriers’ margins are decreasing with more competitive pricing

LTL Carriers are reporting a decrease in demand and an increase in price competition. The increasing price of fuel is reducing the margin which LTL carriers make on a shipment. FedEx Freight in 2007 reduced its fuel surcharge which is putting pressure on other LTL carriers to either increase their discounts or adjust their fuel surcharge. Alan Graf, FedEx Corp.’s CFO stated “Since September, our fuel costs have increased more than 8%, or $85 million."

JPMorgan analyst Thomas Wadewitz said “he expects LTL carriers to continue to increase capacity going into 2008 and sees carriers getting more competitive on pricing.”