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Home » Old Dominion announces 4.9-percent general rate increase
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Old Dominion announces 4.9-percent general rate increase

July 23, 2012
Mark B. Solomon
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For the second consecutive year, less-than-truckload carrier Old Dominion Freight Line Inc. has announced an increase on noncontract rates that undercuts its rivals.

Thomasville, N.C.-based Old Dominion today announced a 4.9-percent general rate increase on shipments moving within the U.S. and Canada. The increase takes effect Aug. 6.

About the same time last year, Old Dominion imposed the same increase on shipments moving under its main tariffs.

Because the 2012 increases will be based on a shipment's length of haul, some shipments may be subject to higher increases than others, the company said. However, the increases are expected to average out at 4.9 percent, the company said.

As it did last year, Old Dominion waited late in the 2012 pricing cycle to make its move. Most of its rivals have already imposed general rate increases of 6.9 percent, though UPS Freight, the LTL unit of UPS Inc., recently announced a 5.9 percent hike.

Old Dominion, considered by many to be the strongest LTL carrier in the industry, did not dramatically lower its rates during the 2006–2010 freight recession as a number of its competitors did. Although the company acknowledged that it had to reduce its prices to defend its market share, Old Dominion chose not to become deeply enmeshed in the fierce rate wars that the other LTL carriers engaged in. These rate wars were designed to gain business and to drive YRC Worldwide Inc., then the market leader, out of business through underpricing.

As a result, Old Dominion emerged from the recession in much better shape than its rivals and could afford to take smaller increases to make up lost ground when the upturn commenced.

In the past two years, LTL carriers in general have rationalized their pricing strategies, and have either shed or turned away unprofitable freight. As a result, rate increases are, by and large, sticking, and yields are picking up to levels not seen for years. Truckers also have abandoned the idea that they could drive YRC out of business through predatory pricing. If anything, the rate wars only served to damage the carriers' bottom lines, and they did not push YRC out of the game.

Transportation Trucking Less-than-Truckload
KEYWORDS Old Dominion Freight Line UPS YRC Worldwide
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Marksolomon
Mark Solomon joined DC VELOCITY as senior editor in August 2008, and was promoted to his current position on January 1, 2015. He has spent more than 30 years in the transportation, logistics and supply chain management fields as a journalist and public relations professional. From 1989 to 1994, he worked in Washington as a reporter for the Journal of Commerce, covering the aviation and trucking industries, the Department of Transportation, Congress and the U.S. Supreme Court. Prior to that, he worked for Traffic World for seven years in a similar role. From 1994 to 2008, Mr. Solomon ran Media-Based Solutions, a public relations firm based in Atlanta. He graduated in 1978 with a B.A. in journalism from The American University in Washington, D.C.

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