With August in the books, less-than-truckload carrier XPO remains on track to achieve its third-quarter guide for a mid-single-digit tonnage increase.
XPO (NYSE: XPO) reported a 3.7% year-over-year increase in tonnage for August as a 5.7% increase in daily shipments was partially offset by a 1.8% decline in weight per shipment, according to a Thursday news release. The headline tonnage number decelerated from July’s 5.8% y/y increase, however, the July 2025 comp was 400 basis points easier than August’s prior-year comp.
On a two-year-stacked comparison, which removes the noise from prior-year comps, all volume metrics (shipments, weight per shipment and tonnage) improved in August compared to July. The two-year-stacked tonnage comps began improving in November, with August off just 1% following a 2.9% decline in July.
The company said on its second-quarter call that July tonnage was basically flat with June, which was 400 bps better than the normal seasonal trend. The August update implies the seasonal outperformance has continued. The update also puts the carrier on track to achieve its third-quarter tonnage guidance, which calls for a mid-single-digit percentage y/y increase.
Weight per shipment improved on a two-year comp, suggesting more industrial-related freight is back in the network.
The Institute for Supply Management’s Manufacturing PMI stood at 54.6 in August, 100 bps below July’s four-year high. However, the dataset remained in expansion territory for an eighth consecutive month. (A reading above 50 signals expansion, while one below 50 indicates contraction.)
The new orders subindex—an indicator of future activity—fell 3 points but remained in growth mode at 53.7. Carrier tonnage typically lags the index by three months.
XPO’s changing freight mix presents a headwind to weight per shipment. The freight mix now includes more shipments from local accounts (SMBs), which are typically lighter but produce better margins.
The company doesn’t provide revenue-based metrics in its intraquarter updates, however, it previously said contractual rate renewals were up by a mid-single- to high-single-digit percentage in the second quarter. It also said on the call that yield and revenue per shipment (ex-fuel) will continue to improve sequentially in the third and fourth quarters.
XPO’s adjusted operating ratio outlook for the third-quarter also appears intact.
It normally sees 200 to 250 bps of OR degradation from the second to the third quarter, which implies an OR above 82%. It expects to generate an OR below 81% in the quarter, suggesting at least 180 bps of y/y improvement.
Why it matters? XPO is one of a few publicly traded LTL companies. Its midquarter results provide insight into a subsegment of trucking where few public datasets exist.
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