YRC Freight plans to raise base rates 6.9 percent on average, matching rate increases announced by several competitors, YRC Worldwide CEO James Welch said Friday.
“Rates still aren’t where they need to be,” Welch said in an interview. “The industry as a whole needs to improve its returns so companies can recapitalize their fleets.”
FedEx Freight and Con-way Freight will take 6.9 percent general rate increases July 9 and ABF Freight System implemented a 6.9 percent increase June 25.
YRC’s regional carriers — Holland, New Penn Motor Express and Reddaway — may impose a slightly smaller GRI, in the 6.5 percent range, Welch said.
General rate increases only cover non-contract freight, typically a smaller portion of a less-than-truckload carrier’s overall business. But they send a signal.
LTL operators say more of those rate increases are sticking with customers, which in turn helps solidify contract rates in annual negotiations with shippers.
There are a “multitude” of factors propelling LTL rates higher, Welch said, leading with the need to reinvest in operations and replace aging fleet equipment.
“Our equipment, our facilities, are not like fine wine. They don’t get better every day,” Welch said. “Some of the industry’s infrastructure needs to be upgraded.”
LTL carriers, including YRC Freight, also face higher technology costs and must spend more to recruit and train employees, including truck drivers, he said.
But higher rates aren’t always the answer. Greater collaboration between shippers and carriers can blunt rate increases by reducing carrier costs.
“There’s an overall attitude of ‘how can we partner together to help each other’ versus a pure price play,” said Welch. “I certainly see that” among shippers.