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XPO Reports Continuation of Muted Trends in LTL Segment
June 6,
2023 by HFBusiness Staff in Business Strategy, Industry 
XPO reported a continuation of muted trends in its less-than-truckload segment during May. Tonnage was down 2.3% year over year (y/y) in the month, following a similar previously disclosed decline in April.
The tonnage decline in May was the combination of a 1.8% y/y increase in shipments and a 4% decline in weight per shipment. The May trends were slightly worse than what the carrier saw in April and largely an extension of its first-quarter results.
On its first-quarter conference call in early May, XPO’s management team said the company was hauling more local freight, which typically is associated with lower shipment weights. Weight per shipment was off 4% y/y in May, following a roughly 5% decline in April.
No commentary or revenue-based metrics were provided in the Tuesday update.
Management from the company previously guided to a small increase in revenue per hundredweight in the second quarter. The metric was 2.4% higher y/y in the first quarter, up 1.4% excluding fuel surcharges.
Management’s guidance also called for only half of the normal 400 basis points of sequential operating ratio improvement the company sees from the first to second quarter each year. Lower shipment weights are part of the reason for the softer OR guide.
The worst of the volume degradation may have passed for some carriers. Even if the rates of decline hold through June, which is normally a seasonally strong month for freight, XPO’s tonnage in the second quarter would be 3% higher than in the first quarter. By comparison, the carrier normally sees a 5% sequential tonnage increase in the second quarter.