Consolidation, Innovative Service And Regional Carriers Reshape Sector

For much of the past 20 years, the less-than-truckload segment of trucking has been getting squeezed.

On one side, irregular-route truckload carriers have grabbed freight volume by offering lower-cost, point-to-point service. On the other side, customers have diverted more and more small shipments to parcel and express carriers promising fast and reliable delivery service.

Little wonder, then, that LTL carriers have undergone the most wrenching upheaval of any segment of trucking since economic deregulation of the industry in 1980. Today’s LTL world reflects the impact of consolidation among national carriers, the emergence of new regional competitors and the constant push for innovation.

Among the national LTL players, there’s been little change at the top. The Big 3 LTL carriers in 1979 — Roadway Express, Consolidated Freightways (CFWY) and Yellow Freight System — remained so in 1999 and have been joined by ABF Freight System (ABFS). All of these carriers benefitted from consolidation in the industry and have adapted their traditional hub-and-spoke freight networks to offer shippers more direct, faster service.

Beneath the top layer, the industry has been gutted. At least 51 of the 60 top LTL carriers in 1979 have merged or gone out of business. In just the past three years, time-honored names like ANR Advance Transportation of Milwaukee; Preston Trucking, “The 151 Line” in Preston, Md.; NationsWay Transport Service of Denver; and Crouse Cartage Co. in Carroll, Iowa, have closed their doors.

In their place have emerged new regional LTL carriers like Con-Way Transportation Services, which established its first regional fleeet in 1983 and was the first company to extend its regional coverage nationwide. USFreightways Corp. (USFC) has done the same thing by buying a group of independent regional carriers and adding logistics, distribution and freight forwading capabilities. American Freightways, which began as a regional fleet in Harrison, Ark., in 1982, will achieve its long-stated goal of becoming a national LTL carrier when it merges with FedEx Corp.'s (FDX) Viking Freight subsidiary later this year. FedEx’s acquisition of American Freightways is still subject to approval by the shareholders of both companies.

For the full story, see the Jan. 15 print edition of Transport Topics. Subscribe today.