Forward Air said Monday it will implement a 5.9% general rate increase (GRI) on tendered shipments starting Feb. 5. The announcement follows rate hikes from other less-than-truckload carriers, some of which were implemented ahead of schedule this year as Yellow’s exit shrunk the industry’s available capacity.
LTL carriers use GRIs to reset base rates to offset cost inflation and to fund capital investments. The announced increases are the expected averages the rate changes will produce. The rate bumps usually vary by lane, distance and weight class.
Forward’s (NASDAQ: FWRD) GRI was the same amount last year with implementation also on the first Monday in February.
“The rate changes will enable the Company to continue investing in customer support, safety and service enhancement, as operating costs have risen for many in the freight transportation industry,” a news release said. “Factors necessitating the GRI include increased costs in real estate, equipment, cost per mile and economic inflation.”
In recent weeks, carriers have announced GRIs ranging from 4.9% to 7.5%.
Saia’s (NASDAQ: SAIA) GRI set the top end of the range with a start date two months earlier than normal. Old Dominion (NASDAQ: ODFL) was at the bottom of the range but the implementation was one month ahead of schedule. However, the company has been an industry leader in yields, with revenue per hundredweight roughly 20% higher over the last two years.
Last week, Forward announced tonnage in its expedited segment was up 5.5% year over year (y/y) for the first two weeks of the fourth quarter. The increase was the result of an 11% increase in weight per shipment, which was partially offset by a reduction in shipment counts. Forward’s tonnage inflected positively y/y in September for the first time in a year.
Carrier:GRI (vs. prior):Implementation (vs. prior):ABF Freight (ArcBest)5.9% (in line)Oct. 2 (1 month early)TForce (TFI International)4.9% (-100 bps)Oct. 2 (6 weeks early)Saia7.5% (+100 bps)Dec. 4 (2 months early)Old Dominion4.9% (in line)Dec. 4 (1 month early)FedEx Freight5.9%-6.9% (-100 bps)Jan. 1 (in line)Forward Air5.9% (in line)Feb. 5 (in line)XPOTBAQ1/24Table: Company reports
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