With August within the books, less-than-truckload provider XPO stays on monitor to realize its third-quarter information for a mid-single-digit tonnage enhance.
XPO (NYSE: XPO) reported a 3.7% year-over-year enhance in tonnage for August as a 5.7% enhance in each day shipments was partially offset by a 1.8% decline in weight per cargo, based on a Thursday information launch. The headline tonnage quantity decelerated from July’s 5.8% y/y enhance, nonetheless, the July 2025 comp was 400 foundation factors simpler than August’s prior-year comp.
On a two-year-stacked comparability, which removes the noise from prior-year comps, all quantity metrics (shipments, weight per cargo and tonnage) improved in August in comparison with July. The 2-year-stacked tonnage comps started bettering in November, with August off simply 1% following a 2.9% decline in July.
The corporate stated on its second-quarter name that July tonnage was mainly flat with June, which was 400 bps higher than the traditional seasonal pattern. The August replace implies the seasonal outperformance has continued. The replace additionally places the provider on monitor to realize its third-quarter tonnage steerage, which requires a mid-single-digit proportion y/y enhance.
Weight per cargo improved on a two-year comp, suggesting extra industrial-related freight is again within the community.
The Institute for Provide Administration’s Manufacturing PMI stood at 54.6 in August, 100 bps under July’s four-year excessive. Nevertheless, the dataset remained in growth territory for an eighth consecutive month. (A studying above 50 indicators growth, whereas one under 50 signifies contraction.)
The brand new orders subindex—an indicator of future exercise—fell 3 factors however remained in development mode at 53.7. Provider tonnage usually lags the index by three months.
XPO’s altering freight combine presents a headwind to weight per cargo. The freight combine now consists of extra shipments from native accounts (SMBs), that are usually lighter however produce higher margins.
The corporate doesn’t present revenue-based metrics in its intraquarter updates, nonetheless, it beforehand stated contractual charge renewals had been up by a mid-single- to high-single-digit proportion within the second quarter. It additionally stated on the decision that yield and income per cargo (ex-fuel) will proceed to enhance sequentially within the third and fourth quarters.
XPO’s adjusted working ratio outlook for the third-quarter additionally seems intact.
It usually sees 200 to 250 bps of OR degradation from the second to the third quarter, which suggests an OR above 82%. It expects to generate an OR under 81% within the quarter, suggesting no less than 180 bps of y/y enchancment.
Why it issues? XPO is one of some publicly traded LTL firms. Its midquarter outcomes present perception right into a subsegment of trucking the place few public datasets exist.
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