Is Amazon on course to upend LTL industry?

Needless to say, the potential for market disruption is significant. 

J.P. Morgan analyst Brian Ossenbeck warned in a research note that Amazon’s entry as a for-hire competitor poses a substantial risk to LTL stocks. “The most obvious risk for LTL stocks is if this service launches for external users at some point in 2026 as it is pretty much impossible to put that disruptive idea back in the box,” Ossenbeck notes. 

Amazon’s extensive network of cross-docks and existing logistics assets provide a robust foundation from which to construct LTL operations, potentially creating a dual impact: reducing demand for rival carriers while simultaneously increasing demand in the truckload segment.

This looming threat comes at a particularly challenging time for incumbent LTL operators. TFI International’s CEO Alain Bedard recently characterized the freight industry as being in a “deep recession,” with volumes at alarmingly low levels. “It’s still a very, very difficult environment,” Bedard stated during an earnings call, projecting that “the first six months of 2025 will be more difficult than the first six months of 2024.” This sentiment echoes across the industry, with most major players anticipating continued volume headwinds through at least the first half of 2025.

Old Dominion Freight Line — a bellwether for the industry — reported a 7.3% year-over-year decline in revenue for Q4 2024, with tonnage per day falling 8.2%. The company’s operating ratio deteriorated by 410 basis points year over year to 75.9%, reflecting the strain of maintaining excess capacity in anticipation of a market turnaround.

Similarly, ArcBest Corp.’s asset-based segment, which includes its LTL operations, saw a 7.6% year-over-year revenue decline in Q4 2024, underscoring the margin pressure felt across the industry. CEO Judy McReynolds emphasized the need for increased volume to leverage the company’s fixed-cost network and drive margin expansion.

TFI International’s U.S. LTL operations have been particularly challenged. Bedard candidly described the segment’s Q4 performance as a “disaster,” citing high costs, declining volumes and operational inefficiencies. The company reported a staggering operating ratio of approximately 98% for its legacy TForce Freight business, a stark contrast to TFI’s historically sub-90% operating ratios in its specialized truckload segment.

Despite these headwinds, some carriers remain cautiously optimistic about a potential recovery in the latter half of 2025. 

Old Dominion, for instance, pointed to encouraging trends such as the Institute for Supply Management’s Purchasing Managers’ Index (PMI) moving back into expansion in January after 26 months of contraction. This leading indicator typically precedes increased LTL volumes by several months.

Still, the impending entry of Amazon into the LTL market would likely throw a wrench into most carriers’ plans for a recovery.