It is way too premature to say less-than-truckload (LTL) carriers are reverting to the price wars of 2006-2010 that blew the sector out of the water. But according to David S. Congdon, vice chairman and CEO of Old Dominion Freight Line Inc., rate skirmishes are becoming a bit more commonplace as carriers struggle with a difficult operating environment.

Thomasville, N.C.-based Old Dominion, considered by most who follow the sector to be its best-run operator, has recently noted "some increased price competition," Congdon said today in a statement announcing the company's first-quarter results. Congdon emphasized that Old Dominion has not "seen signs of broad-based irrational pricing." However, he acknowledged that a subpar economic environment can "lead to the loss of pricing discipline" as carriers vie for share and shippers get tough on pricing.

Old Dominion's first-quarter yields, or "revenue per hundredweight," a traditional measure of the effectiveness of a carrier's pricing scheme, rose 3.8 percent over the 2015 period. The figure excludes the impact of a drop in fuel surcharges, which compressed the increase to 0.3 percent. Surcharges have dropped along with the price of diesel fuel, which has crimped revenues that carriers generate from the charges.

Congdon said in the statement that Old Dominion's yield increase reflects continuing price stability. Indeed, UPS Freight, the LTL unit of Atlanta-based UPS Inc., today reported a 2.1-percent rise in yields year-over-year, even though revenue and tonnage fell by high single-digit percentages in that time. Saia Inc., a Johns Creek, Ga.-based LTL carrier, yesterday posted a similar first-quarter gain in yield, despite year-over-year declines in revenue, operating income, and net income.

Any abandonment of the hard-won focus on rational pricing would not be good news for LTL carriers. From the start of the last so-called freight recession in 2006 through the aftermath of the Great Recession in 2010, carriers underpriced each other in a desperate effort to capture market share amid terrible volumes. The problem was amplified by efforts to drive the then-reeling market leader, YRC Worldwide Inc., out of business by taking its traffic. YRC survived, and other carriers paid with hits to their profitability. Since then, however, carriers have imposed multiple tariff rate increases; culled or refused to handle unprofitable loads; and rationalized their fleet operations. These steps have paid dividends, especially as demand has improved, albeit modestly relative to other recoveries.

But the worm has turned since last fall. The U.S. industrial sector, the LTL industry's bread and butter, hit a sharp speed bump as domestic demand slowed and the strong dollar hurt exports and made imports cheaper relative to U.S-produced goods. The situation has improved a bit since then, but a full industrial recovery is still a ways away.

The sluggishness in overall volumes in LTL and in the much larger truckload segment led Michael P. Regan, head of consultancy TranzAct Technologies Inc., to declare at this week's NASSTRAC Annual Shippers conference in Orlando, Fla., that the U.S. has fallen into another freight recession. The questions are now of duration and severity, Regan added. Historically, leading economic indicators such as transport anticipate turns in a business cycle by turning downward before a recession or a slowdown, and upward before a recovery or expansion.

Even Old Dominion is feeling it. Its first-quarter revenue rose just 1.2 percent year-over-year. Daily shipments rose 4.5 percent, but tonnage growth was hurt by a decline in average shipment weight. At the same time, the company's reported higher costs due to a 6.7-percent increase in the average number of full-time employees, and higher depreciation expense because of increased investments in capacity.

Old Dominion was essentially a spectator during the last rate war, and its prudence has paid off in terrific results quarter after quarter, due in part to never needing to dig out a of a rate hole as its rivals have. In recent years, the carrier has been one of the last to announce tariff rate increases, letting other carriers take the plunge first.

David G. Ross, who covers LTL for investment firm Stifel, said in a note today that the first quarter is the toughest period for carriers to hold the line on price, because volumes are seasonally sluggish. Ross said he expects the pricing climate to stabilize within the next two quarters. He added that Old Dominion's "core" pricing levels—base rates excluding fuel—came in flat in the quarter relative to 2015 due in large part to a 3.3-percent drop in average shipment size.