Shipping companies have been hurt during the recent recession just like any other business. While there is an expected increase to come in the early parts of 2010 in many aspects of shipping, there is one in which the decreases are expected to continue. It would seem that if you are interested in saving money you can make a killing by shipping less than a full truckload (and just shipping often).
LTL trucking companies are expected to take their already low rates and make them even lower in the near future. With business becoming harder to find due to economic concerns everywhere, LTL carriers are being forced to cut their rates even further in order to stay in business.
This pricing philosophy of dropping LTL freight rates even lower has proven to benefit some companies. Con-way is operating at nearly full capacity while there are others such as Old Dominion Freight Line are not so lucky. Freight rates are already around 5-15% lower than they were a year ago. Some freight shipping companies have LTL freight rates already discounted by 85%.
How some of the freight shipping companies like Con-way operate at such cut rate prices is a mystery to some. An executive for Old Dominion Freight Line, Earl Congdon, has commented on how operating at those rates is below cost, making running at full utilization not economically sound; the cost would be way too high.
“Those carriers,” he said of competitors pricing at or below cost, “are not going to be able to operate with the prices they’ve been quoting.”