XPO used pricing discipline and productivity gains to turn a weak shipment backdrop into stronger profits in the third quarter, a result that stands out in a still‑sluggish LTL market. The carrier’s adjusted earnings rose year over year and its North American LTL operating ratio improved by 150 basis points to 82.7%, with management crediting AI‑driven planning tools and mix improvements for the outperformance.
Under the hood, activity was softer but richer: shipments per day fell 3.5% and tonnage per day declined 6.1%, yet yield excluding fuel climbed 5.9% and revenue per shipment continued its multi‑quarter trend higher. XPO reported $2.11 billion in total revenue, adjusted EBITDA of $342 million, and generated $371 million in operating cash flow. Results also reflected a $35 million corporate charge tied to a pre‑acquisition Con‑way legal matter.
Several granular indicators underscore how XPO squeezed more margin from each move. Analyst scorecards show revenue per hundredweight excluding fuel at roughly $25.77, pounds per day near 65.2 million and average weight per shipment around 1,302 pounds—signals of a lighter mix that can be margin‑friendly when priced and routed effectively. Management called out “profitable share gains” in the local channel, which typically carries shorter hauls and higher yields.
The context across LTL remains challenging, which makes XPO’s margin expansion notable. Old Dominion reported a 9% drop in LTL tons per day in Q3 and said October volumes were running even weaker year over year, despite impeccable service metrics (99% on‑time, 0.1% claims). Saia posted essentially flat revenue, with tonnage and shipments down modestly and an adjusted operating ratio of 87.6%. Taken together, peers’ results reinforce that demand is still at a trough even as carriers defend price and service.
Investors noticed XPO’s spread against the cycle. The stock outperformed on the print, and fresh sell‑side commentary this week highlighted the company’s “idiosyncratic” efficiency levers—areas where cost and productivity programs can move the needle even before volumes rebound. Stifel lifted its XPO target to $140 on October 28, citing stable pricing and the carrier’s ability to grind out gains through the elongated downturn.
Why it matters for carriers and shippers: In a market still starved of freight, the winners are those translating technology and dock‑to‑door execution into fewer empty miles, tighter labor deployment and cleaner terminal turns. XPO’s yield and OR gains show that route optimization and account mix can more than offset negative tonnage—without abandoning pricing discipline. For shippers, that combination typically preserves reliability now and reduces the risk of aggressive rate snap‑backs when demand finally turns.
Looking ahead, executives remain cautious on near‑term freight but see brighter prospects into 2026 as rates and industrial sentiment stabilize. Meanwhile, October volume commentary from a best‑in‑class competitor underscores that the recovery is not here yet. Expect carriers to keep leaning on yield management, service quality and selective share gains rather than chasing freight—an approach XPO just showed can expand margins at the bottom of the cycle.
Sources: FreightWaves, XPO Newsroom, Barron’s, Zacks, Old Dominion filings/transcripts (summaries), Saia press release
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