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This story appears in the Sept.��15 print edition of Transport Topics.

Freight markets are heating up noticeably as the third quarter draws to a close, with particular strength in the less-than-truckload sector, sources said.

Information from individual fleets, American Trucking Associations and industry analysts has linked the improved performance primarily to a stronger U.S. economy.

“We have seen a lot more strength in less-than-truckload,” said Judy McReynolds, CEO of ArcBest Corp., during an investor conference last week. She cited a 6% year-over-year tonnage increase during July and August at the ABF Freight unit.

ArcBest ranks No. 13 on the Transport Topics list of the 100 largest U.S. and Canadian for-hire carriers.

Old Dominion Freight Line, another LTL carrier, boosted its third-quarter tonnage outlook earlier this month. ODFL ranks No. 12 on the TT for-hire list.

BB&T Capital Markets analyst Thom Albrecht highlighted the favorable LTL trends in a recent report.

“While tight truckload capacity and poor rail service are undoubtedly helping, we believe absolute demand has improved,” he wrote on Sept. 4, noting that upward trend reflects higher gross domestic product. “Industrial production has averaged 4.7% growth the past three quarters, after lingering in the 2% to 3% range most of the prior two years.”

American Trucking Associations’ latest report, which includes data for July, underscores the trend.

“Less-than-truckload freight is on a roll,” the report said, showing a rise of 8.9% above July 2013, 1.2% above June, and at a faster pace than the overall 7% improvement in seven months of 2014.

Truckload shipments were 4% higher in July than the same month last year and showed a 1% improvement over June. Results also outpaced the 2% increase through seven months.

Year-over-year truckload volume growth has topped 4% in three of four months between April and July, ATA said.

��“The truckload market has continued to strengthen,” said John Steele, chief financial officer at Werner Enterprises.

“We think the peak season shapes up as a pretty good one,” said Steele, who also spoke at an investor conference on Sept. 9. “The second quarter was strong. We were overbooked almost every day. That has continued [this quarter].”

Henry Gerkens, CEO of Landstar System, No. 10 on the TT for-hire list, said on Sept. 4 on an investor conference call that “truckload volumes and truckload revenue per load continue to be at very high levels,” exceeding year-earlier amounts by 20% in July and August.

“I see no change in the positive momentum and direction,” he said.

Reports from load board operators also have been favorable during the quarter. DAT reported a 58% increase in spot market loads of all types in July over a year earlier, and a 44% year-over-year increase last month.

Cowen and Co. analyst Jason Seidl told TT that both privately owned and publicly traded fleets attending his firm’s Sept. 4 investor meeting had “absolutely” the same view of a stronger trucking market.

“Everyone felt good,” he said, because rates and freight levels were strong and capacity is tight.

Some fleets said they could handle 5% more freight if they had the drivers and equipment to accommodate higher volume, he added.

The stronger LTL market prompted ABF Freight to reduce the amount of truckload typically used to fill in cargo gaps in the LTL network, McReynolds said.

FedEx Corp. could further brighten the LTL picture when its fiscal first-quarter earnings are released on Sept. 17.

Another analyst, David Ross at Stifel, Nicolaus & Co., emphasized the LTL trend.

“Everyone we have talked to in the last couple of months has said [the market] is pretty good,” he said on a conference call on Sept. 8, noting a strong correlation between LTL freight and the Institute for Supply Management’s purchasing index.

Earlier this month, that index stood at 59, the best since 2011, and just a 0.3 percentage point below the record set in that year.

Ross also noted freight movement in the other direction — from LTL to truckload, because of capacity constraints in the TL market.

The market has improved enough that John Barnes, an analyst for RBC Capital Markets, asked McReynolds and other officials if there might be another rate increase this year.

McReynolds said rates are evaluated based on market conditions and that more than one rate increase has been made in past years. She also noted that ABF doesn’t typically make the first rate move.

FedEx Freight was the first to raise LTL rates this year. Others, including ABF, followed.

Steve Bruffett, CFO at Con-way Inc., also didn’t close the door on a second 2014 LTL rate hike.

“It’s always possible another [general rate increase] could happen,” he said, adding it was “not on the front burner.”