Less-than-truckload (LTL) pricing reached a record high in the fourth quarter, as carriers maintained firm control over rates despite subdued demand, according to a quarterly report released Wednesday by AFS Logistics and TD Cowen. While some seasonal easing is anticipated in the first quarter, pricing levels remain historically elevated.

The LTL rate-per-pound component of the TD Cowen/AFS Freight Index finished the fourth quarter at 67.9% above its January 2018 benchmark. That represented a 100-basis-point increase from the third quarter and a 490-basis-point jump year over year.

Looking ahead, the index is projected to decline by 180 basis points in the first quarter to 66.1%. Even with that pullback, rates would still be 220 basis points higher than a year ago, extending the streak of year-over-year gains to nine consecutive quarters.

According to AFS Logistics Vice President of LTL Pricing Mich Fabriga, carriers have remained disciplined. “Despite limited demand and ongoing shipper efforts to optimize modes and reduce costs, LTL providers have largely avoided using pricing concessions to chase volume,” he said.

Broader economic indicators continued to signal weakness during the quarter. Manufacturing activity remained in contraction territory, with the Purchasing Managers’ Index falling to 47.9 in December, down 30 basis points from November. A reading below 50 indicates contraction, and the index has now pointed to recessionary conditions for 10 straight months and 36 of the past 38 months.

The new orders component, often viewed as a forward-looking gauge of demand, also remained contractionary at 47.7.

Despite declining shipment characteristics, overall LTL costs held firm. Cost per shipment edged down just 30 basis points from the third quarter, even as average shipment weight fell 160 basis points and length of haul dropped 260 basis points. Fuel surcharges also declined by 140 basis points during the period.

The report noted that LTL costs per shipment have stayed more than 40% above January 2018 levels since the second quarter of 2022, even though shipment weight has fallen roughly 20% over that same timeframe. This dynamic underscores what the authors described as “exceptional pricing discipline” among LTL carriers.

Truckload market shows early stabilization signs

Truckload (TL) market conditions were more nuanced. The report identified “tentative signs of recovery” emerging late in 2026, driven primarily by tightening capacity. Regulatory pressures—including stricter English-language proficiency standards, limitations on non-domiciled commercial driver’s licenses, and increased enforcement related to ELDs and driver training—have helped support higher rates, even as demand remains flat.

The TL rate-per-mile component of the index rose 160 basis points sequentially in the fourth quarter and was up 240 basis points year over year, ending the period 7.6% above the 2018 baseline. However, inflation in operating costs has far outpaced rate growth over that span, compressing margins and contributing to carrier exits from the market.

The index is forecast to dip slightly in the first quarter by 20 basis points. Even so, it would remain 7.4% above the baseline—120 basis points higher year over year—and mark a fifth straight quarter of annual gains.

Truckload linehaul costs per shipment declined 8.6% from the third quarter, closely mirroring a 10% drop in miles per shipment. The report attributed both trends to continued shipper efforts to regionalize networks and optimize transportation modes.

Taken together, the parallel movement in costs and miles suggests a freight market that is beginning to stabilize, albeit under conditions of flat demand.

“Across the industry, there’s a belief that carriers who survived the prolonged period of rock-bottom rates will eventually benefit from a recovery in 2026,” said Aaron LaGanke, vice president of freight services at AFS. “The uncertainty lies in when that turning point will actually arrive.”