LTL Cost Trend Report
Labor and equipment costs continue rising for LTL fleets. Expect extended trade cycles and slower hiring in the coming months
Key Observations
- Labor costs are rising the fastest as a percentage of revenue. Employee compensation rose over two percentage points as share of revenue between Q1 2024 and Q1 2025.
- Insurance and claims costs are rising sharply. We are projecting further increases for the remainder of the year with a continuing rise in accident litigation settlements.
- Truck and trailer purchase costs are also going up. The trend commenced in 2021 as inflation kicked in and was moderating before the end of 2024. But current tariff policies are expected to spike prices again this year. The average age of tractors at LTL fleets will likely creep up again after dropping from 4.4 years to 4.2 years between 2024 and 2025.
- Lower fuel costs are helping to offset some of the cost increases. Diesel prices have been dropping steadily for the past few weeks and may sink a lot lower if crude oil prices continue to languish.
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