The LTL Classification Overhaul: How Shipping Costs Will Shift and What It Means for Your Supply Chain

The less-than-truckload (LTL) shipping landscape is on the cusp of a historic transformation. As detailed in a March 24, 2025, Trucking Dive article by Colin Campbell, the National Motor Freight Classification (NMFC) system is set for a major overhaul in July 2025, with shipping costs poised to shift based on shipment density. Meanwhile, despite a sluggish freight market, LTL carriers are doubling down on expansion, banking on an eventual demand rebound. At Gain Consulting, we’ve analyzed these developments to help you understand how they’ll impact your costs, why carriers are building now, and how you can prepare for what’s ahead.

The NMFC Overhaul: Density Takes Center Stage

Shippers’ top concern about the upcoming NMFC update is straightforward: how will it affect their bottom line? The answer lies in a single word—density. Starting in July 2025, the NMFC will pivot to a density-based classification system, a shift dubbed “the biggest changes in classification in the history of classification” by Joe Ohr, COO of the National Motor Freight Traffic Association (NMFTA). This overhaul will simplify the process by focusing on weight and dimensions, moving away from the complexities of the current 18-class system.

Here’s the breakdown:

Heavier, Denser Shipments (4-6 lbs/cu ft and over 8 lbs/cu ft): These will see cost decreases as they’re reclassified into lower freight classes, rewarding industrial shippers with compact, weighty freight.
Lighter, Bulkier Shipments (under 4 lbs/cu ft): Costs will rise as these shipments shift to higher classes, reflecting the space they occupy on trailers.
Middle Ground (6-8 lbs/cu ft): Pricing should remain stable, offering a neutral zone for shippers in this density range.

This shift means accurate measurement is non-negotiable. Recording weight and dimensions will be critical to avoid misclassifications—and unexpected rate hikes. As Campbell notes, “It depends on the density of the shipment,” making precision in your shipping data a cost-saving imperative.

The Freight Market Paradox: Building Amid a Downturn

While the NMFC gears up for change, the U.S. freight market is grappling with a demand slump. The Cass Freight Shipments Index fell 5.5% year-over-year in February 2025, with an 8.2% annualized drop in January. Major LTL players like FedEx Freight (-4.7%), Old Dominion Freight Line (ODFL) (-5.9%), and XPO (-6.2%) reported shipment declines in early 2025, with only Saia bucking the trend at a 5.5% gain—likely poaching market share.

Yet, LTL carriers aren’t pulling back. They’re expanding terminals, adding lanes, and investing heavily in capacity. ODFL, for instance, poured $664 million into its network over two years, opening four new facilities in 2024 and keeping more under construction. Roadrunner added 278 lanes last week, a third exceeding 1,000 miles, while regional carriers like Dayton Freight Lines and A. Duie Pyle are boosting next-day and same-day capabilities.

Why the optimism? As Chris Jamroz, CEO of Roadrunner, told the Journal of Commerce, “We’re at the bottom of the trough, but we will go up, and we want to be positioned to respond to shippers very fast.” Carriers are betting on a recovery—hoping it hits later in 2025—and leveraging the fallout from Yellow’s 2023 collapse, which tightened capacity and drove the LTL producer price index (PPI) to a record high, up 12.3% since July 2023.

Pricing Power and Strategic Growth

The LTL PPI’s surge—6.3% in January and 6.1% in February year-over-year—reflects carriers’ ability to secure contractual rate hikes amid reduced competition. This pricing power, coupled with 30% excess capacity at ODFL, as noted by CFO Adam Satterfield, gives carriers room to absorb current softness while preparing for an “economic inflection.” Satterfield sees signs of improvement: “Sequentially, we saw shipments and tonnage improve more than average from January to February.”

This strategic buildup isn’t just about optimism—it’s about density. Larger, denser networks enable faster service and lower per-unit costs, aligning perfectly with the NMFC’s new focus. Carriers like Roadrunner, leasing former Yellow terminals, and ABF Freight, shifting to heavier truckload-rated shipments, are adapting to maximize efficiency and capture market share when demand rebounds.

What This Means for Shippers

At Gain Consulting, we see two converging forces reshaping your LTL strategy: the NMFC overhaul and carriers’ proactive expansion. Here’s how they’ll impact you:

Cost Variability
The density-driven NMFC update will create winners and losers. If your freight skews heavy and compact, you’ll likely see savings. If it’s light and bulky, brace for higher rates. Middle-density shippers can expect stability—assuming your measurements are spot-on.
Data Precision
Missteps in recording weight and dimensions could lead to reclassifications, inflating costs. The July shift amplifies the need for accurate shipment profiling—a task your logistics team can’t afford to overlook.
Capacity Opportunities
Carriers’ current excess capacity (e.g., ODFL’s 30%) offers a window to negotiate favorable rates before the anticipated upswing tightens the market. The FedEx Freight spinoff in 2026 and Amazon’s potential LTL entry could further shake things up, making early action key.
Service Enhancements
Expanded networks mean more next-day and same-day options, especially from regional players. This could shrink delivery windows—if you align with carriers investing in your lanes.

Preparing with Gain Consulting

The NMFC overhaul and carriers’ growth plans signal a pivotal moment for LTL shipping. Here’s how Gain Consulting can help you navigate it:

Density Audits: We’ll analyze your freight profile to predict cost shifts under the new NMFC, ensuring you’re ready for July.
Measurement Systems: Our experts can implement or refine tools to capture precise weight and dimension data, minimizing reclassification risks.
Carrier Negotiations: With carriers flush with capacity, we’ll secure competitive rates now, locking in savings before demand spikes.
Network Optimization: We’ll align your shipping with expanding LTL networks, tapping into faster service and denser lanes.

The Road Ahead

The LTL sector is at a crossroads. The NMFC’s density-based shift, set for July 2025, will redefine shipping costs, rewarding precision and punishing guesswork. Simultaneously, carriers are building for a recovery that’s yet to materialize, with the Cass Index and early 2025 data painting a soft picture—no traditional March peak in sight, as Jamroz observed. Yet, the LTL PPI’s record highs and carriers’ confidence suggest a rebound is on the horizon, fueled by Yellow’s absence and strategic investments.

Don’t wait for the upswing to catch you off guard. Contact Gain Consulting today to assess your freight, refine your processes, and position your supply chain for success in this evolving LTL landscape. Let’s turn density into dollars—and uncertainty into opportunity.