The freight transportation industry operates on a complex spectrum of pricing tiers that accommodate shipments of all sizes, from small parcels weighing just a few hundred pounds to full truckload shipments exceeding 26,000 pounds. Understanding these pricing tiers is crucial for businesses looking to optimize their shipping costs and make informed logistics decisions.
In today’s dynamic freight market, trucking represents 80.7% of the U.S.’s freight cost, totaling a gross freight revenue of $940.8 billion in 2022. With such a massive industry, knowing how to navigate the various pricing structures can result in significant cost savings for shippers.
Understanding Freight Pricing Tiers: From Partial to Full Loads
The freight industry categorizes shipments into distinct tiers based on weight, space utilization, and handling requirements. These tiers create a pricing hierarchy that reflects the economies of scale achieved when shipping larger quantities.
1/8 Truckload (Small Shipments: 500-1,500 lbs)
The smallest tier in the truckload spectrum typically handles shipments between 500-1,500 pounds. These shipments often fall into the Less-Than-Truckload (LTL) category, where multiple shippers share trailer space.
Current Market Statistics:
- LTL rates made year-over-year gains in April 2024, with the Bureau of Labor Statistics’ Producer Price Index for LTL long-distance trucking rising 8.2% year over year
- The General Freight Trucking (Less Than Truckload) industry market size reached $94.5 billion in 2024, an increase of 1.22% from 2023
Pricing Factors for Small Shipments:
- Density: Shipment density determines how much space a shipment occupies in the truck and affects trucking per mile rates. Calculating shipment density involves dividing the cargo weight by its cubic feet
- Freight Class: Classification determines pricing based on density, stowability, handling, and liability
- Distance: Shorter distances typically result in higher per-mile rates due to fixed costs
1/4 Truckload (1,500-5,000 lbs)
Quarter truckload shipments represent a middle ground between small LTL shipments and larger partial loads. These shipments often benefit from consolidated pricing while still sharing trailer space with other shippers.
Key Characteristics:
- Better rates than smaller shipments due to improved density
- Still requires LTL handling and cross-docking
- Transit times typically longer than dedicated shipments
1/2 Truckload (5,000-12,000 lbs)
Half truckload shipments begin to approach the threshold where dedicated transportation becomes economically viable. These shipments often represent the tipping point between LTL and partial truckload services.
Market Dynamics:
- Heavy Shipments (5,000 – 15,000 lbs) represent a significant segment of the LTL market with specific growth projections through 2029
- Improved handling compared to smaller shipments
- Potential for dedicated pickup and delivery
Partial Truckload (12,000-26,000 lbs)
Partial truckload (PTL) services bridge the gap between LTL and full truckload transportation. When a load doesn’t fill an entire trailer, it’s a partial truckload. Carriers can take on multiple shipments to earn more per mile and maximize their earnings per trip. PTLs are charged per mile and pro-rated by weight and dimension.
Pricing Structure:
- Point-to-point service with minimal handling
- Rates based on weight and linear footage
- Faster transit times than LTL services
Full Truckload (26,000+ lbs)
Full truckload shipments represent the most cost-effective transportation option on a per-pound basis. Full truckload shipping (FTL) applies to a shipment that takes up an entire trailer. This is a key price variable as it affects the cost of freight per mile. When it comes to FTL freight rates factors, it doesn’t matter whether it’s the smallest truck in your fleet or the largest as FTL applies as long as you use up your entire space. Typically, FTL freight will exceed 15,000 pounds.
Market Size and Growth:
- The General Freight Trucking (Truckload) industry revenue is expected to increase at a CAGR of 6.0% to $253.5 billion through the end of 2024, including growth of 1.2% in 2024 alone
- The market size of the General Freight Trucking (Truckload) in the US is $253.5 billion in 2024
Current Freight Rates and Pricing Trends
Per-Mile Pricing Structure
The trucking industry primarily operates on a per-mile pricing model, with rates varying significantly by equipment type and market conditions.
Current Rate Benchmarks (2024-2025):
- Average national van rate averages are at $2.40 per mile, while the average spot rate for a dry van was $2.06 per mile, or $2.35 per mile as a contract rate in June 2025
- Reefer rates are averaging $3.19 per mile, with refrigerated trucks averaging $2.35 per mile spot rate, or $2.71 per mile as a contract rate in June 2025
- Flatbed rates show regional variation, with the Southeast having the highest average rates at $2.67 per mile, while the West averages $2.21 per mile
Operating Cost Analysis
Understanding the cost structure behind freight pricing helps explain the pricing hierarchy across different shipment sizes.
According to ATRI’s latest report, the average marginal cost of trucking hit $2.27 per mile in 2023, with fuel, labor, insurance, and equipment payments as key drivers of expense.
Major Cost Components:
- Fuel Costs: Typically, gross fuel expense averages between $0.40-$0.55 per mile. However, when you factor in fuel surcharge and some practices, the net fuel spend can be dramatically less
- Driver Compensation: Largest single expense category
- Equipment Financing: Equipment financing expense ranges from $0.00-$0.40 per mile
- Insurance: Rising costs impacting overall pricing
Total operating costs per mile vary widely, ranging from $1.16 to $3.05, with driver compensation and fuel being the largest expenses. Significant cost variations exist across different expense categories.
Market Structure and Fragmentation Impact on Pricing
The U.S. truckload market’s structure significantly impacts pricing across all shipment tiers. According to the American Trucking Association, there are over 1.1 million for-hire common carriers registered with the Federal Motor Carrier Safety Administration. 99.7% of those companies operate 100 or fewer trucks, and 95.7% operate less than 10 trucks.
This fragmentation creates unique pricing dynamics:
Market Concentration:
- Though there are several large national carriers with +10,000-truck-fleets, no provider controls enough market share to dictate terms to shippers. The top 15 full truckload-focused carriers only account for around 10% of total truckload market revenue
- Small carriers dominate the supply base
- High volatility in pricing due to fragmented market structure
LTL Market Dynamics and Pricing Trends
The Less-Than-Truckload segment, which handles smaller shipments from 1/8 to 1/2 truckload, shows distinct pricing patterns.
Recent Market Performance:
- Industry analysts expect a three to five percent rate increase for LTL rate inflation in 2024
- The reshuffling of capacity and market share has begun in earnest in the $56 billion LTL industry
- LTL carriers have historically maintained good pricing discipline and have consistently put out annual General Rate Increases (GRIs) in the 3-8% range. Those negotiated increases usually range somewhere below the GRI levels (i.e., 3-5%)
Emerging Pricing Trends:
- Another trend is the movement to density-based pricing. It has been something that the LTL industry has been talking about for years and appears to be gaining traction
- An additional factor that will impact LTL pricing is the improved pricing systems that LTL carriers are deploying. With the introduction of AI, these price models are getting more sophisticated and better able to model their costs. This enables carriers to pinpoint where they need price increases
Global Market Outlook and Growth Projections
The freight transportation industry shows strong growth prospects across all shipment tiers.
LTL Market Growth:
- The global less-than-truckload (LTL) market size was estimated at $216.68 billion in 2023 and is projected to reach $342.09 billion by 2030, growing at a CAGR of 6.9% from 2024 to 2030
- Less-Than-Truckload (LTL) market offers $110.7 billion growth opportunity by 2029, with 6.8% CAGR
Full Truckload Projections:
- Key findings show the Trucking & Freight-Long Distance, Full Truckload (FTL) Industry (U.S.) is projected to reach $248,065,272,905 by 2030
Factors Influencing Pricing Across All Tiers
Several universal factors affect pricing regardless of shipment size:
1. Distance and Lane Density
Initially, the distance between the origin and destination serves as a foundational parameter, influencing the baseline cost due to fuel consumption, driver wages, and vehicle maintenance. Longer distances often result in higher rates due to increased fuel, maintenance, and labor costs.
2. Seasonal Demand Fluctuations
Regional differences in trucking rates can be significant and are influenced by various factors. One of the primary determinants is seasonality. Throughout the year, rates fluctuate based on seasonal demand patterns. For instance, after the holiday season in January and February, rates typically drop as demand for capacity decreases. Conversely, unexpected weather events such as snowstorms or hurricanes can disrupt normal freight movements, leading to increased rates.
3. Equipment Type Requirements
Different equipment types command different rates:
- Dry vans: Standard rates
- Refrigerated: Premium pricing for temperature control
- Flatbed: Specialized handling premiums
- Specialized equipment: Highest rates due to limited supply
4. Freight Characteristics
The weight of the shipment is another critical factor influencing the cost of trucking per mile. Managing the overall weight load for the fleet helps control costs and determine per-mile rates accurately. Factors such as heavy haul rates per mile and FTL (Full Truckload) rates need consideration.
Technology’s Impact on Pricing Transparency
The freight brokerage market, which facilitates much of the tier-based pricing, is experiencing significant technological transformation.
Digital Platform Growth:
- Traditional brokerage accounted for 54.3% of the United States freight brokerage market revenue in 2024. The United States freight brokerage market for digital brokerage is accelerating at 17.0% CAGR between 2025-2030
- The freight brokerage market size crossed $51.7 billion in 2023 and is expected to grow at over 6% CAGR from 2024 to 2032, driven by the growing integration of AI and ML technologies
Strategic Recommendations for Shippers
Choosing the Right Tier
- Analyze Total Landed Cost: Consider not just transportation rates but also inventory carrying costs, packaging, and handling
- Evaluate Service Requirements: Balance cost savings against transit time and reliability needs
- Consider Consolidation Opportunities: FTL still commands the bulk of long-haul industrial freight, but driver scarcity and equipment constraints are nudging shippers to multistop LTL consolidations. Parcel-to-LTL consolidation hubs reduce last-mile congestion and cut per-unit cost
Optimizing Costs Across Tiers
- Leverage Density Improvements: Focus on packaging optimization to improve freight class
- Build Carrier Relationships: Develop partnerships across different tiers for consistent capacity
- Use Technology: Implement TMS systems to compare rates across tiers automatically
- Plan Seasonally: Due to recent volatility in international trade policy, many shippers and consumers have been conservative in new spending. If more trade deals are finalized, and companies and consumers feel more confident in making purchases, it would create a surge in shipping. Given the long period of low rates and carrier attrition, there is not enough carrier capacity to absorb incremental freight growth
Future Market Outlook
The freight transportation industry continues to evolve, with several trends affecting pricing across all tiers:
Economic Factors
For context, the average marginal cost to operate a truck in 2024 was around 34% higher than in 2014, according to the American Transportation Research Institute. Simply put, it is difficult for freight rates to drop materially, as many carriers have been running with unsustainable unit economics.
Capacity Constraints
Driver shortages and equipment constraints continue to pressure rates upward across all shipment sizes. An increase in rates may be driven by a number of persistent, industry-wide challenges in trucking, such as driver shortage, capacity constraints, and rising operational costs.
E-commerce Impact
Consumer spending on online shopping was nearly $905 billion in 2022. Expectations for speedy deliveries have increased, leading to growth in last-mile and same-day delivery markets, projected to grow by 21.2% in 2024.
Conclusion
Understanding the pricing tiers from 1/8 to full truckload is essential for making informed shipping decisions in today’s complex freight market. With the trucking industry generating nearly $1 trillion in annual revenue and serving as the backbone of American commerce, optimizing shipping strategies across these tiers can result in significant cost savings and improved service levels.
The key to success lies in understanding the unique characteristics of each tier, from the handling-intensive nature of small LTL shipments to the economies of scale achieved with full truckload transportation. As the industry continues to evolve with new technologies, changing regulations, and shifting demand patterns, staying informed about pricing trends and market dynamics becomes increasingly crucial for supply chain success.
By leveraging the insights and statistics presented in this guide, businesses can make more informed decisions about their freight transportation strategies, ultimately improving their bottom line while maintaining the service levels their customers expect.
