Executives at XPO said on a Q2 earnings call Friday that Yellow's shuttering is allowing its own pricing to accelerate.
The LTL competitor implemented a general rate increase for its transactional retail business, and has moved up its target for contract renewals, incoming CFO Kyle Wismans said.
"Others with annual contracts will take time to realize, but our customers understand: When you take 10% of capacity out of the market, it's going to cost more to move freight," Wismans said.
For Q2, the company experienced YoY growth in tonnage of 4% as well as an increase in shipments per day of 9%, according to an earnings report. Chief Strategy Officer Ali Faghri said on the call that positive upticks continued in July, with tonnage up 4.2% YoY and shipment count up 8.8%.
While the YoY increase continued in early July, that change accelerated toward the end of the month. "At the end of July, we saw roughly about a high single-digit increase in our shipment count versus the beginning of the month, so call it somewhere in that 3,000 shipments per day increase," he said.
CEO Mario Harik said the reason behind those results involved not just Yellow's disruption but its investment in capacity over the last year and a half. The company has added more doors and markets, increased its headcount where it's needed and modified its culture through incentivized compensation changes.
Harik said it's still too early to tell what the impact on pricing is going to be, but XPO expects tailwinds in the quarters and years ahead.
"When you look at LTLs, pricing has always been very disciplined, given that dynamic of shortage of capacity versus demand and growth," he said.