Knight-Swift’s Surge and TFI’s Challenges Offer Insights for Shippers

At Gain Consulting, we provide U.S. shippers with data-driven strategies to navigate the dynamic supply chain landscape. The first quarter of 2025 has brought mixed results for the less-than-truckload (LTL) sector, as highlighted by recent earnings reports from industry leaders Knight-Swift Transportation and TFI International, published by Transport Topics on April 24, 2025. Knight-Swift posted a robust 26.7% increase in LTL revenue, driven by strategic acquisitions, while TFI faced profit declines and leadership changes at its U.S. LTL unit, TForce Freight, amid freight market weakness and tariff pressures. Below, we analyze these developments, their implications for U.S. shippers, and actionable strategies to optimize LTL operations in 2025.

Knight-Swift’s LTL Triumph: A Surge Fueled by Acquisitions

Knight-Swift Transportation, ranked No. 7 on the Transport Topics Top 100 list of for-hire carriers, returned to profitability in Q1 2025, reporting a net income of $30.6 million compared to a $2.64 million loss in Q1 2024. The standout performer was its LTL division, which saw revenue excluding fuel surcharge soar 26.7% to $305.26 million from $240.99 million year-over-year. This growth was driven by a 24.2% increase in daily shipments, rising to 23,349 from 18,800, largely attributed to the July 2024 acquisition of Dependable Highway Express (DHE).

The DHE acquisition, combined with Knight-Swift’s strategic expansion through former Yellow Corp. terminals (adding over 1,000 doors since January 2025), has bolstered its LTL network, particularly in the Western U.S. Transport Topics notes that LTL revenue per hundredweight (excluding fuel surcharges) increased 9.3% to $18.24 from $16.91, while revenue per load jumped 11.7% to $1,956 from $1,751. The division’s operating ratio (OR) improved to 96.4 from 98.0, reflecting better cost management despite tariff-related headwinds.

Knight-Swift’s CEO, Adam Miller, highlighted challenges, including weather disruptions in January and February and a tariff drag in March that dampened seasonal freight volume growth. FreightWaves reports that shipper uncertainty around tariffs, such as the 10% baseline and 25% on Canadian/Mexican goods, is affecting rate negotiations, with Knight-Swift securing only low- to mid-single-digit rate increases rather than the anticipated build. Despite these pressures, the LTL segment’s strong demand and network expansion position Knight-Swift for continued growth.

Key Takeaway: Knight-Swift’s LTL success underscores the value of strategic acquisitions and network expansion in driving volume and revenue growth, even in a tariff-constrained market. Shippers can leverage such carriers for reliable capacity.

TFI’s LTL Struggles: Leadership Changes Amid Market Weakness

In contrast, TFI International, ranked No. 4 on the Transport Topics Top 100, faced a 39.6% profit decline in Q1 2025, with net income dropping to $56 million from $92.8 million in Q1 2024. The company’s U.S. LTL unit, TForce Freight, underperformed, grappling with a soft freight market and tariff-related volume declines. CEO Alain Bédard, typically critical of underperforming units, praised the new leadership team—Kal Atwal, Chris Traikos, and Keith Hall—for their efforts following mid-quarter changes prompted by a challenging January and February.

TFI’s broader truckload (TL) segment also struggled, with Canadian TL mileage falling 14.8% to 21,574 miles from 25,326 miles year-over-year, exacerbated by tariffs on steel and aluminum imports and excess capacity from the Daseke acquisition ($1.1 billion, December 2023). Transport Topics notes that TFI reduced its 2025 capital expenditure to $200 million from $300 million, reflecting caution amid market uncertainty. Bédard described the freight environment as a “deep recession,” with no recovery expected before 2026.

Despite these challenges, TFI’s U.S. LTL unit is focusing on operational improvements, including shifting shipments from rail to road to reduce errors like missed pickups, which Bédard called “a disaster.” The company is also upgrading its pricing software, set for completion by year-end, to enhance competitiveness. FreightWaves highlights TFI’s plan to re-domicile to the U.S., where 70% of its operations are based, signaling a long-term commitment to the market.

Key Takeaway: TFI’s LTL challenges reflect broader market softness and tariff impacts, but leadership changes and operational tweaks aim to stabilize performance. Shippers should monitor TFI’s progress for potential service improvements.

Market Context: Tariffs and Freight Dynamics

The contrasting performances of Knight-Swift and TFI reflect broader trends in the U.S. LTL market, shaped by tariffs and economic uncertainty:

• Tariff Impacts: The 10% baseline tariff, 25% on Canada/Mexico (partially paused), and 145% on Chinese goods (effective April 10, 2025) have disrupted freight flows. Journal of Commerce reported a Q1 surge in LTL volumes near U.S.-Mexico borders due to “pull-forward” freight, but FreightWaves notes a 64% drop in U.S.-China imports in early April, reducing overall freight demand.

• LTL Resilience: LTL remains a bright spot compared to truckload, with Knight-Swift’s 26.7% revenue growth and TFI’s focus on LTL turnaround highlighting its stability. Digital Commerce 360 underscores strong e-commerce demand, with Walmart’s delivery expansion to 12 million households driving LTL needs for consumer goods.

• Capacity and Rates: The New York Times reports ample trucking capacity has absorbed import surges, but Knight-Swift’s Miller notes shippers are adopting a “wait-and-see” approach, tightening inventories and delaying rate decisions. The LTL Producer Price Index (PPI) dropped slightly in March 2025, suggesting stable pricing despite volume growth.

• Regional Dynamics: BTS Transborder Freight Data shows $86.6 billion in truck freight moved across U.S.-Canada-Mexico borders in February 2025 (up 3.9%), with Laredo, TX ($23.4 billion) and Detroit, MI ($8.1 billion) as top ports, critical for LTL cross-border flows.

Key Takeaway: Tariffs are dampening freight demand, but LTL’s resilience and regional hubs offer opportunities for shippers to optimize logistics.

Implications for U.S. Shippers

The Q1 2025 LTL market dynamics have significant implications for U.S. shippers:

1. Capacity Availability: Knight-Swift’s network expansion (e.g., 1,000+ new doors) ensures robust LTL capacity, particularly in the West, while TFI’s operational tweaks may improve service reliability. Shippers should secure capacity early as tariff-driven slowdowns loom.

2. Cost Pressures: Rising LTL rates (e.g., Knight-Swift’s 9.3% increase per hundredweight) and new customs fees (e.g., FedEx’s $4.50 or 2% disbursement fee) due to the de minimis exemption ending May 2, 2025, will increase shipping costs.

3. Service Reliability: TFI’s shift to road-based LTL shipments aims to reduce errors, but shippers must monitor service quality during this transition. Knight-Swift’s improved OR (96.4) signals operational efficiency.

4. E-Commerce Demand: Digital Commerce 360 notes that e-commerce growth, driven by players like Walmart, is fueling LTL demand for consumer goods like computers/parts and vehicles/parts, as seen in BTS data.

5. Tariff Uncertainty: FreightWaves projects a 15% drop in U.S. cargo volumes for 2025, with May TEU down 20.5% year-over-year, urging shippers to plan for reduced import activity.

Key Takeaway: Shippers face rising costs and tariff-driven uncertainty but can leverage LTL carriers’ capacity and e-commerce growth to maintain efficiency.

Strategic Recommendations for U.S. Shippers

To thrive in the 2025 LTL market, U.S. shippers should adopt the following strategies:

1. Partner with Expanding LTL Carriers: Engage with carriers like Knight-Swift, leveraging their 26.7% revenue growth and new terminals for reliable capacity, especially in high-demand regions like Laredo and Otay Mesa.

2. Monitor TFI’s Turnaround: Track TForce Freight’s progress under new leadership for potential service improvements. Request updates on pricing software upgrades to ensure competitive rates.

3. Mitigate Tariff Costs: Use customs bonded warehouses to defer duties for up to five years, as Bloomberg reports surging demand. Diversify sourcing to Mexico or Vietnam to avoid 145% Chinese tariffs.

4. Optimize Cross-Border Logistics: Focus on top truck ports like Laredo, TX ($23.4 billion) and Detroit, MI ($8.1 billion), as per BTS, for efficient LTL movements. Use transload facilities to consolidate shipments.

5. Enhance E-Commerce Capabilities: Align with LTL carriers supporting e-commerce, capitalizing on demand for computers/parts and vehicles/parts. Adopt geospatial technology, like Walmart’s hexagonal grids, to optimize delivery zones.

6. Invest in Visibility Tools: Use platforms like SONAR or Freightos to monitor LTL rates, port congestion, and shipment volumes, especially as DataDocks reports a 41% drop in April freight bookings.

7. Prepare for Soft Market: With American Trucking Associations projecting only 1.6% freight volume growth in 2025, tighten inventory management and negotiate flexible LTL contracts to handle volatility.

Key Takeaway: Strategic partnerships, tariff mitigation, and data-driven planning will help shippers navigate LTL opportunities and market challenges.

How Gain Consulting Can Help

At Gain Consulting, we specialize in turning supply chain complexities into competitive advantages for U.S. shippers. Our tailored solutions address the 2025 LTL market dynamics:

• LTL Carrier Partnerships: Connect you with high-performing carriers like Knight-Swift for reliable capacity and competitive rates.

• Tariff Mitigation Strategies: Secure bonded warehouse space and diversify sourcing to minimize duty costs.

• Cross-Border Optimization: Streamline logistics through key ports like Laredo and Detroit, leveraging transload and LTL solutions.

• E-Commerce Integration: Implement geospatial and AI-driven tools to enhance delivery efficiency for consumer goods.

• Market Intelligence: Provide predictive analytics to navigate freight volume declines and rate fluctuations.

Knight-Swift’s LTL surge and TFI’s challenges highlight a pivotal moment for U.S. shippers. Contact Gain Consulting today to build a resilient, cost-effective LTL strategy for 2025.

Sources: Transport Topics, April 24, 2025; FreightWaves, April 15, 2025; Journal of Commerce, April 2025; Bloomberg, April 15, 2025; Digital Commerce 360, April 18, 2025; Bureau of Transportation Statistics, April 23, 2025