ABF joins UPS with early rate increase
Less-than-truckload carrier ABF Freight System announced a 6.9 percent general rate increase effective July 25.
The pricing announcement comes on the heels of last week's news that competitor UPS Freight is implementing a similar rate increase for non-contract freight and signals that the LTL industry, which has been slower to recover from the recession than truckload and freight transport sectors, is finally gaining some strength.
General rate increases typically affect the small level of spot market purchases of trucking service. Customers that sign contracts for ongoing service typically receive a substantial discount from the standard rate.
Other carriers are expected to follow suit. But whether the proposed increases stick depends on the discipline carriers show during customer negotiations and in decisions on adding capacity to their fleets, David Ross, transportation and logistics analyst at Stifel Nicolaus, said in a message to investors.
ABF, the fifth-largest U.S. LTL carrier, and UPS are implementing annual rate increases several months sooner than normal. UPS raised rates 5.9 percent last October and in December 2009 announced a 5.7 percent increase that took effect on Jan. 4, 2010. ABF took a 5.9 percent rate increase last October.
ABF said prices could vary by lane and shipment characteristics. Rate details will be posted at www.abf.com. ' Eric Kulisch