Old Dominion Freight Line will raise its tariff base rates 4.9 percent Aug. 6, joining several less-than-truckload competitors that raised rates in June and July.
Exact tariff rate increases will vary depending on lane and distance, but the average increase will be 4.9 percent, the Thomasville, N.C.-based carrier said.
The increased tariff rates will offset rising equipment and insurance costs as well as benefits and wages, Todd Polen, vice president of pricing, said in a statement.
“Raising our rates is something we do reluctantly and after considerable analysis,” said Polen. “We’re taking this action to ensure our services remain best-in-class.”
With the addition of ODFL, the six largest LTL operators in the U.S. have raised general rates between 4.9 and 6.9 percent this summer.
General rate increases only cover non-contract freight, typically a smaller portion of a less-than-truckload carrier’s overall business. But they send shippers a signal.
LTL trucking companies are pursuing higher contract rates as well, claiming higher pricing is needed to counter a broad range of rising operating costs.
Several trucking companies are still recovering from a bitter rate discounting war during the recession. Their rates still haven’t reached pre-recession levels.
ODFL was one of the few major carriers to hold back from that war, and as a result, the company remained profitable in 2009, when its competitors suffered losses.
In the first quarter, ODFL increased revenue 17.6 percent to $497.1 million, increasing profit 44.1 percent year-over-year to $31.1 million.
But success comes at a cost. The trucking company spenting $89.4 million in the first quarter alone on capital projects as it expands its territory and porftolio of services.