What's stirring the waters of the less-than-truckload (LTL) freight market? Is it the unpredictability of macroeconomic conditions or undercurrents within the industry itself? Roadrunner CEO Chris Jamroz cuts through the noise with a clear perspective: the real challenge lies in identifying opportunities amidst disruption to achieve breakthrough growth. In a recent conversation with Logistics Management Group News editor Jeff Berman, Jamroz shared insights about the current state and future prospects of the LTL freight market.
Freight Economy: Moving Cautiously Through the Fog
When asked about the current state of the freight economy and whether it has bottomed out, Jamroz offered a nuanced view. While the U.S. economy remains robust overall, the freight market appears shrouded in uncertainty. Citing indicators like new factory startup rates and the ISM index, Jamroz noted these metrics show no signs of positive growth. Particularly concerning is the ISM manufacturing index, which has remained below the 50-point threshold—indicating contraction—for nearly 20 consecutive months, casting shadows over the LTL freight market's outlook.
LTL Capacity: Accelerating Reshuffle Brings Both Risks and Rewards
Discussing the current LTL capacity landscape, Jamroz described Yellow Corporation's collapse last year as an "earthquake" for the market. While large national shippers emerged as primary beneficiaries of this shakeup, their gains stemmed from artificial market conditions rather than organic growth. Consequently, Jamroz anticipates negative year-over-year comparisons in the near future.
Roadrunner's Strategy: Operational Excellence Drives Growth
Despite industry headwinds, Roadrunner has delivered consecutive record-breaking quarters. Yet Jamroz remains focused on improvement opportunities, particularly in organic expansion. The company has dramatically improved its on-time delivery rate from approximately 60% in 2021 to over 90% today, establishing itself as a preferred partner for third-party logistics providers. However, Jamroz acknowledges room for growth in serving larger enterprise clients. Rather than waiting for macroeconomic improvements, Roadrunner prioritizes internal optimization—enhancing service quality and operational efficiency to sustain growth.
Manufacturing and Retail: Traditional Patterns Disrupted
As the twin engines of LTL freight demand, manufacturing and retail sectors have seen their traditional seasonal patterns dissolve. Jamroz, while noting Roadrunner's modest 1% market share limits his perspective's scope, observes meaningful shifts in freight supply chains. He distinguishes between "first mile" operations (production in China, India, or Mexico) and "last mile" (final U.S. delivery), highlighting Mexico's manufacturing boom as particularly noteworthy while China's recovery appears more muted. Mexico is emerging as a new growth driver for LTL freight.
China's Market: Gradual Recovery Faces Headwinds
Although U.S. imports from China remain strong, Jamroz sees persistent challenges in China's recovery. Blank sailings (canceled voyages) and idle vessels continue, while container rates, though rebounding from lows, remain depressed. Attempts to leverage geopolitical factors for surcharges have proven ineffective.
Inventory Management: Leaner Approaches Take Hold
Major retailers have tightened inventory controls to avoid repeating the massive write-downs that impacted 2022-2023 results. Manufacturers face similar pressures. While the service sector performs well, its direct contribution to LTL freight remains limited. E-commerce continues its strong growth trajectory as a key freight demand driver.
Mexico: The Rising Star
Jamroz expresses strong optimism about Mexico's potential. Traditionally driven by automotive shipments, Mexico's LTL freight growth now stems from broader manufacturing expansion, creating positive ripple effects for U.S. LTL providers.
Cross-Border LTL: Mexico's Share Expands
Jamroz predicts Mexico will capture increasing cross-border LTL market share, citing its workforce productivity and U.S.-aligned consumption patterns as powerful growth catalysts.
The New Normal: "Non-Peak" Becomes Peak
Addressing the paradox of strong U.S. imports without traditional peak season patterns, Jamroz proposes a provocative thesis: "non-peak" has become the new peak. He attributes this to systemic overcapacity—even significant volume increases fail to lift container rates, as record-breaking vessel deliveries (including the largest container ships ever built entering service in Q3) flood the market. Concurrent LTL terminal expansions compound this imbalance, requiring demand to keep pace with swelling capacity.
LTL M&A: Organic Growth Prevails
Regarding industry consolidation, Jamroz views Knight-Swift's acquisition of DHE as potentially the last major regional deal in the Southeast. With few new market entrants over four decades—attributable to the prohibitive costs and timelines of building national LTL networks—he sees organic expansion and targeted acquisitions as Roadrunner's optimal path forward, despite challenging deal-finding conditions.
Conclusion: Embracing Change to Seize Opportunity
Jamroz's analysis reveals an LTL sector at an inflection point. Amid macroeconomic uncertainty, overcapacity, and intense competition, success will belong to carriers that sharpen operational execution while capitalizing on emerging opportunities—from Mexico's manufacturing rise to e-commerce growth and lean inventory strategies. In this evolving landscape, adaptability becomes the ultimate competitive advantage.