LTL Rates Top 80% Above 2018 for First Time, AFS Says

LTL freight rates are projected to run 82.5% above their 2018 level this quarter, the first time the TD Cowen/AFS Freight Index has crossed 80%.

If you sell sofas, treadmills, hot tubs, patio sets or anything else that ships on a pallet, freight is the cost line most likely to be eating a margin you priced months ago. Every high-ticket store I teach at Ecommerce Paradise lives or dies on the gap between what the customer pays and what the supplier, the carrier and the ad platform take, and this index says one of those three just moved against you.

The sections below cover the index itself, the fuel and carrier moves behind it, the damage to a $2,400 order and five freight moves to make before Black Friday. If you are new to the model, start with my guide to what high-ticket dropshipping is.

Freight bills this size make the structure behind your store matter more, so form your LLC with Northwest Registered Agent, the best LLC formation service for ecommerce owners. The address on an LLC filing is where plaintiffs and regulators look, and Northwest’s registered agent address keeps yours off it. Form your LLC with Northwest →

AFS Index Puts Q4 LTL Rates 82.5% Above the 2018 Baseline

AFS Logistics and TD Cowen released the Q4 2026 TD Cowen/AFS Freight Index on Oct. 13 at 10:00 a.m. ET, according to the company release. Every figure in it is measured against a January 2018 baseline.

LTL, priced per pound, is projected at 82.5% above that baseline and up 8.8% from a year earlier. Per CCJ, that is the first quarterly reading above 80% and would make Q4 the third straight record quarter.

Truckload is projected at 23.4% above baseline, up 14.7% year over year and the highest since Q1 2022. It was 19.7% in Q3 2026 and 7.6% in Q4 2025. Ground parcel, priced per package, is projected at a record 43.3%, up 5.8% year over year and 3.2% from Q3. Express parcel is projected at 20.3%, up 13.8% year over year, which would be a record for the fifth straight quarter.

Fuel is the common thread. AFS said LTL fuel surcharges in September ran 79% above their September 2025 level, and the release says LTL surcharges track diesel closely. On the parcel side, the average fuel surcharge rose from 7.75% of the transportation rate in Q1 2021, when diesel averaged $2.91 a gallon, to 30% in September 2026, when diesel peaked at $6.53, according to FreightWaves.

AFS estimates that 72% of that 22.25-point parcel increase came from carriers rewriting their surcharge tables rather than from the pump price. At 2021 diesel prices, today’s tables would still produce a 23.75% surcharge, roughly three times the 2021 level.

Mingshu Bates, chief analytics officer and president of parcel at AFS Logistics, said: “Even if crude oil normalizes and fuel prices recede, the effective fuel surcharge will not show a material decrease.” AFS CEO Andy Dyer was quoted by DC Velocity: “We expect fuel to drive elevated transportation costs for the foreseeable future.”

The report pairs rising rates with soft volume. Mich Fabriga, vice president of LTL pricing at AFS Logistics, said: “Underlying LTL demand remained soft in 2026.” Per the release, LTL tonnage is declining, with national carriers reporting mid-single-digit drops. On the truckload side, Dyer pointed to a “shrinking pool of trucks,” and the release says regulatory enforcement is pulling drivers off the road and that 16 trucking companies filed for bankruptcy in a 30-day period.

Carrier tariffs already reflect the fuel run-up. FedEx Freight’s published LTL fuel surcharge was 57.70% for Oct. 7 through Oct. 13, based on the Oct. 5 fuel price, per its fuel surcharge page. The U.S. Energy Information Administration put on-highway diesel at $6.199 a gallon on Oct. 5, down $0.183 from the prior week, per EIA.

Parcel carriers are stacking more on top. FedEx’s 5.9% average general rate increase takes effect Jan. 4, 2027, per Supply Chain Dive, and FreightWaves counts it as the fourth straight year of an increase that size. The same date moves 2,533 ZIP codes into the remote delivery area surcharge, where the fee rises to $17.75.

Carrier Rate Hikes and Fuel Tables Built the 82.5% LTL Reading

The number did not appear overnight. In my post on the LTL rate increases that took effect Oct. 5, I tracked the carrier moves underneath it. Old Dominion announced a 4.9% general rate increase on Sept. 21, effective Oct. 5, a month earlier than last year. Saia applied 7.1% on July 6, three months earlier than its prior increase, and ArcBest applied 5.9% on June 22. Those figures came from FreightWaves.

Diesel supplied the rest. CBS News reported a record $6.53 a gallon on Sept. 22, and EIA’s Sept. 28 reading of $6.382 was $2.628 above a year earlier. On the policy side, an order deferring 24.4 cents a gallon in diesel tax through 2026 is already in place, which I covered in the dyed diesel order post.

Relief from Washington is not assured. Bloomberg’s Nick Wadhams reported on Oct. 13 that President Trump’s deal for Russian diesel has drawn legal questions and criticism from allies, and that analysts doubt it will lower prices, per the Business Standard republication.

Not every source reads the market the same way. C.H. Robinson’s October freight market update, published Oct. 1, says industry data showed improving LTL tonnage in September, partly because rising truckload costs are pushing some freight back into LTL networks. AFS says national carriers are reporting mid-single-digit tonnage declines. The two accounts conflict on volume, and neither report explains the gap.

C.H. Robinson also says it does not expect a significant LTL capacity crunch, that service levels remain generally strong, and that carriers are holding prices rather than cutting them to win volume. It expects LTL capacity to tighten gradually through year-end. It notes that LTL carriers set their own fuel surcharges, usually as a percentage of linehaul charges, unlike truckload, where surcharges are negotiated per mile.

The index also reflects projected pricing, not invoices. The Freight Intel Report noted, in the coverage I cited earlier, that a list-rate increase may not match what shippers pay after negotiated discounts. AFS’s own report says FedEx and UPS have room for deeper discounts, with FedEx’s favoring large shippers and UPS’s favoring small and medium-sized businesses, per FreightWaves.

What an 82.5% LTL Index Does to a High-Ticket Store’s Margin

My read: the 82.5% is the least useful number in the report. It measures distance from 2018, and your prices were not set in 2018. The 8.8% year-over-year move is the one to price against, and the 79% jump in September’s fuel surcharges is where the volatility lives.

Run it on a hypothetical $2,400 sofa order. Product cost is $1,430 and freight is $390, so landed cost is $1,820 and gross profit is $580, or 24.2%. These are my round numbers, not reported figures. Raise freight by the 8.8% index move and it costs $34.32 more, leaving $545.68, or 22.7%. Raise it 20%, a scenario where your supplier reprices harder than the index, and you lose $78, leaving $502, or 20.9%.

Now add ads. Say you pay $360 in ad cost to land that order, also hypothetical. Profit after ads is $220 at current freight, $185.68 after the 8.8% move and $142 after the 20% move. The index-sized increase takes 15.6% of what was left, and the 20% scenario takes 35.5%. Freight hits net profit at several times its own size because ad cost does not shrink to make room for it.

My trigger for repricing a SKU is freight rising two points of order value above the assumption you priced with. In the example, freight is 16.25% of the order ($390 of $2,400), so the trigger is 18.25%, or $438. You hit it at a 12.3% freight increase, which sits above the 8.8% index move and well below the 20% scenario. One more fuel table reset on top of the index move gets you there.

Durability depends on the mode. For parcel, AFS says the tables changed and Bates says falling fuel will not bring them down, so I treat parcel surcharges as a permanent step up. For LTL, the release says surcharges track diesel closely, so a real drop in diesel should show up in your bill. I would not plan around it. Diesel was still $6.199 on Oct. 5, C.H. Robinson says carriers are holding pricing, and the list-rate increases landed in June, July and October.

You also cannot pass all of it to buyers. Consumer sentiment fell to 46.3 as durables buying sank, and a buyer already hesitating on a $2,400 purchase will notice a $390 shipping line. If you import your own inventory, ocean freight adds a layer underneath, since container rates dipped 2% but stayed 30% above July on Shanghai-LA.

The big players are betting on heavy goods, and they will win on rate. C.H. Robinson agreed to buy RXO, the big-and-bulky delivery company, per my coverage of the deal. Walmart is building a $300M Ohio hub for furniture and TVs, which I broke down in the Walmart oversized fulfillment post.

You cannot out-negotiate a retailer with a national volume contract, so compete on what a small store can offer a supplier: predictable order flow, clean pallet specs and flexible delivery windows. If you also sell on Amazon, note that Amazon is adding LTL labels for bulky sellers in October, so the same freight math applies to your marketplace listings.

Black Friday is where this bites hardest. A discount stacked on top of a freight increase compresses margin from both sides, so check every planned offer against my list of 17 Black Friday promotion ideas that protect your margins before you publish it.

Supplier freight terms, pricing rules and carrier fallbacks are the operator complexity that grows with every SKU you add. It is the work my team takes on in the turnkey done-for-you service, where we build and run the high-ticket store for you.

Freight is rewriting the margin math on stores that were profitable in spring. Want my team to scale the store you already have? See the scaling service →

5 LTL Freight Moves to Make Before Black Friday

Five moves, in the order I’d do them this week:

Pull 90 days of freight invoices and split them by SKU. Compute freight as a share of order value for each one, and flag anything running more than two points above the number you priced with. If your books cannot show landed cost by SKU, fix that first, and a bookkeeping tool such as Finaloop is one way to do it.
Email every supplier and ask three things in writing: the current LTL fuel surcharge percentage, whether it floats with the weekly fuel table, and which accessorial fees (liftgate, residential delivery, inside delivery) apply to your SKUs. Ask whether freight is fixed through Jan. 31. FedEx Freight resets its surcharge on a weekly cycle, so a supplier quoting last month’s percentage is already out of date.
Set a freight floor on each heavy SKU. Shopify moved shipping rates into Markets starting Oct. 1, per my post on the rollout. That means your rates now live at the Market level, so check each one against the new floor inside Shopify.
Quote at least two carriers on anything that ships parcel. Residential demand surcharges start Oct. 25 at UPS and Oct. 26 at FedEx, and the full fee tables are in my holiday surcharge breakdown. Easyship lets you compare courier rates side by side.
Tell customers before they ask. Update the delivery-window language on your policy pages, and use Termly to generate policy pages if you do not have counsel. Send open-order customers a short note through Klaviyo with the new delivery timing.

If you want a second set of eyes on your freight math, book a discovery call and bring the invoice export from the first step.

Frequently Asked Questions

What is the TD Cowen/AFS Freight Index?
It is a quarterly report from AFS Logistics and TD Cowen that projects pricing for truckload, LTL and parcel, each measured against a January 2018 baseline. The Q4 2026 edition came out Oct. 13.

Does 82.5% mean my LTL bill is up 82.5%?
No. The figure is measured against January 2018, and the year-over-year move is 8.8%. It also tracks projected list-rate pricing, so your net change depends on your discounts and your supplier’s contract.

Will falling diesel bring surcharges back down?
For LTL, the release says surcharges track diesel closely, so a sustained drop should show up. For parcel, AFS’s Mingshu Bates says the effective surcharge will not fall materially. Diesel was $6.199 on Oct. 5 per EIA, so price for the current level.

Who pays LTL freight in dropshipping?
It depends on the supplier’s terms. Some build freight into the wholesale price and some bill it separately, so get the terms in writing. My guide to dropshipping suppliers covers the vetting checklist.

What about return freight on heavy items?
Return freight is a real cost on a 150-pound item, so put it in your return policy before the holiday rush. Shopify will tax US return shipping fees from Oct. 23, which I covered in this post.

How do I handle delivery-delay tickets?
Send tracking updates automatically with AfterShip. Route the tickets that still arrive through a helpdesk such as Gorgias so one person can answer them in a batch.

Which niches are least exposed to LTL rates?
Lighter goods with a high price per pound. I would add weight-to-price ratio to any niche shortlist. My guide to choosing a high-ticket niche walks through the filters I use. The free niche list gives you candidates to test.

Not sure your freight math survives Q4? Want 1-on-1 coaching to launch or fix your high-ticket store? Get the coaching details →

Freight is the cost line most store owners check last and fix last. Move it to the top of your list this week, before the holiday volume makes every carrier quote worse. Subscribe to the YouTube channel for daily breakdowns. More breaking news coming through the day.

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Trevor Fenner

Trevor Fenner is an ecommerce entrepreneur and the founder of Ecommerce Paradise, a platform focused on helping entrepreneurs build and scale profitable high-ticket ecommerce and dropshipping businesses. With over a decade of hands-on experience, Trevor specializes in high-ticket dropshipping strategy, niche and product selection, supplier recruiting and onboarding, Google & Bing Shopping ads, ecommerce SEO, and systems-driven automation and scaling. Through Ecommerce Paradise, he provides free education via in-depth guides like How to Start High-Ticket Dropshipping, advanced training through the High-Ticket Dropshipping Masterclass, and fully done-for-you turnkey ecommerce services for entrepreneurs who want a faster, more hands-off path to growth. Trevor is known for emphasizing sustainable, real-world ecommerce models over hype-driven tactics, helping store owners build scalable, sellable, and location-independent brands.