The Rules Are Changing and So Are the Costs
The less-than-truckload (LTL) freight market has experienced significant disruption as demand and carrier capacity have done a complicated dance. Demand has surged and plummeted in a volatile economy. However, prices have remained consistently elevated amid carrier exits and strategic capacity reductions across the industry. In fact, in a recent survey conducted by UPS, 49% of wholesale shippers indicated rising transport costs as their primary challenge in freight management.1
Additionally, pricing structures, historically somewhat of an enigma in the LTL market, have become even more difficult to understand. After non-specialized freight moved to the new density-based scale in July of 2025, most shippers were faced with the arduous task of auditing all their reclassified shipments. And to add insult to injury, accessorial prices tacked on at the end can make a quote feel like a bait and switch but have come seemingly unavoidable. A full 91% of LTL shippers report paying for an accessorial, most commonly for inside delivery or overweight shipments.2 And in the automotive sector in particular, parts orders often vary in size, urgency and destination, complicating pricing even further.
With the decreased competition in the LTL market, it may feel like options are limited for shipments over 150 pounds, but in order to protect margins and keep products moving, it’s clear that businesses can’t continue to run the same playbook, and it may be time to take a second look at LTL operations.
Why It’s Time to Revisit Legacy Systems
Freight is a famously traditional industry, rooted in legacy and sometimes even analog systems. Depending on the age and the size of the company, LTL operations can range from a fully integrated transportation management system (TMS) to a manually coded spreadsheet, to a sticky note on the computer monitor of a shipping manager.
No matter the current state, the change management of auditing processes, integrating new shipping modes, and shopping for new carriers can sometimes stop supply chain managers from even beginning to take a closer look at their operations. But the world of final mile delivery is evolving, and companies that are not taking on the cost today of re-engineering their day-to-day operations could be leaving money on the table long-term.
The biggest surprise to many seasoned supply chain professionals may be the addition of an entirely new shipment type to the mix. The old rule that any shipment over 150 pounds automatically gets bid out for LTL may be the first legacy assumption to re-examine. With changes to freight classifications and increasing accessorial charges, the answer to your LTL freight pricing conundrum may actually be small parcel.
Why the Surprising Answer Might Be Small Parcel
Premium small parcel networks are the gold standard in terms of speed, visibility and safety. Small parcel shipments are more convenient and versatile, especially when delivering to smaller locations without a dock or staff in place to break down a full pallet. While some shipments' characteristics make LTL the right choice, the reality is that many shipments that travel LTL today are small parcel compatible, and switching transit modes can present substantial cost savings.
Especially when it comes aftermarket parts, service components or time-sensitive replacements, the reliability and trackability of a small parcel network that was historically out of reach now may even be more cost-efficient. That's why when shippers stop to take a look at their freight operations, they should assess the true cost of tradeoffs between LTL and small parcel. It may be time to add an unlikely shipping method to the mix.
Imagine a world where heavy shipments were fully trackable, had fewer touchpoints, required no lift gate or special handing accessorials and predictable pricing models. The answer to LTL pricing conundrum might not be LTL. The freight market isn’t showing signs of slowing down, and the brands that choose to evolve with it will be positioned for success.
1. “Freight Management Strategies: Why End-to-End Execution Matters for Wholesalers”, UPS, 2026
2. 2025 survey performed by Morning Consult, on behalf of UPS