Freight Slowdown: Old Dominion's Price-Over-Volume Bet

THOMASVILLE, NC – December 02, 2025 – Old Dominion Freight Line, Inc. (Nasdaq: ODFL) provided a stark reminder of the challenges facing the U.S. economy, reporting a significant drop in freight volumes for November. The less-than-truckload (LTL) giant saw its revenue per day decrease by 4.4% compared to the same month last year, a direct result of a 10.0% plunge in LTL tons per day. This decline, driven by a 9.4% drop in daily shipments, serves as a potent bellwether for the broader industrial and consumer landscape.

In a statement, President and CEO Marty Freeman attributed the performance to “ongoing softness in the domestic economy.” This assessment is strongly corroborated by recent macroeconomic data. The ISM Manufacturing PMI, a key gauge of the factory sector's health, registered a contractionary 48.2% in November, its ninth consecutive month below the growth threshold of 50. New orders and employment within the sector also weakened. Simultaneously, consumer sentiment has soured, with the Conference Board Consumer Confidence Index falling sharply to 88.7 as shoppers pull back on discretionary spending. For an industry as closely tied to manufacturing output and retail inventory cycles as LTL freight, these headwinds are directly translating into fewer pallets on trucks.

However, a deeper look into Old Dominion’s metrics reveals a carefully orchestrated strategy of resilience. While volumes fell, the company managed to increase its LTL revenue per hundredweight, a critical measure of pricing power. This deliberate focus on yield over sheer volume is becoming a defining characteristic of the industry's top performers in a post-pandemic, post-Yellow Corp. market.

A Masterclass in Yield Management

Old Dominion’s ability to command higher prices in a soft market is not accidental; it is the result of a long-term strategy centered on service quality and disciplined pricing. While overall revenue per day dipped, the company reported that for the quarter-to-date, LTL revenue per hundredweight (excluding fuel surcharges) rose by a healthy 5.2%. This demonstrates a firm commitment to what Freeman calls “yield management initiatives.”

This pricing power is built on a foundation of operational excellence. The company consistently boasts a 99% on-time service record and a cargo claims ratio of just 0.1%. In a supply chain environment where reliability is paramount, shippers are increasingly willing to pay a premium for service that minimizes disruption, damage, and delays. ODFL is leveraging this “unmatched value proposition” to hold the line on pricing, even as competitors might be tempted to cut rates to attract volume.

The strategy reflects a broader industry trend where leading LTL carriers are prioritizing profitability over market share at any cost. By using sophisticated costing models to evaluate lane and customer profitability, carriers like Old Dominion are selectively choosing the freight they haul, ensuring that each shipment contributes positively to the bottom line. This approach stands in contrast to the historical model of chasing volume to maximize network density, a strategy that often led to price wars and margin erosion.

Navigating a Reshaped Industry Landscape

The current market dynamics cannot be understood without acknowledging the seismic shift caused by the 2023 collapse of Yellow Corp. The exit of one of the nation's largest LTL carriers removed significant capacity from the market, fundamentally altering the competitive landscape. This has provided remaining carriers, particularly well-run operators like Old Dominion, XPO, and Saia, with newfound pricing discipline.

Old Dominion’s November volume decline of 10.0% is in line with trends seen elsewhere. For instance, competitor XPO reported a 5.4% year-over-year decline in LTL tonnage for November, though it also managed to increase its yield. Saia, another major player, has seen mixed results, with tonnage falling in October before seeing a slight rebound in November. This industry-wide pressure on volumes underscores the pervasive economic softness.

However, the strategic responses differ. While some carriers have aggressively pursued former Yellow terminals to expand their footprint and absorb displaced freight, Old Dominion has maintained its focus on organic growth and service quality. The company is in the midst of a $450 million capital expenditure plan for 2025, with nearly half dedicated to real estate and service center expansion. This isn’t about filling empty lanes; it’s a calculated investment in building the capacity and efficiency needed to capture high-quality market share when the freight cycle inevitably turns.

Investing for the Next Cycle

Old Dominion's leadership has repeatedly stated a long-term goal of gaining market share. Yet, its current actions—prioritizing price over volume—may seem counterintuitive to that goal. The strategy, however, is forward-looking. By refusing to compromise on price, the company protects its margins and preserves capital, allowing it to continue investing in its network, technology, and people even during a downturn.

Since 2015, the company has invested $2.4 billion in service center expansion, viewing the LTL sector as fundamentally capacity-constrained. Management believes that when industrial activity and consumer demand rebound, shippers will flock to carriers with available capacity and a proven record of superior service. By maintaining its high standards and expanded network through the lean period, ODFL is positioning itself to capture a disproportionate share of the upside.

This approach signals a mature phase for the LTL industry, where the most successful companies will be defined not by their size alone, but by their operational efficiency and financial discipline. For investors and supply chain managers, Old Dominion’s November report is a clear signal that while the near-term economic road may be bumpy, the company is steering a steady course aimed at long-term dominance.