In the less-than-truckload (LTL) transportation market, full-network express delivery is the area with the most long-term growth potential and economies of scale. The high-growth and low-concentration market characteristics make the full-network express delivery market the preferred choice for major express delivery companies to “cross over” into the LTL market.

Total social logistics costs include transportation costs, storage costs, and management costs, with transportation costs accounting for the highest proportion. Transportation modes include aviation, railway, waterway, and roadway. Among them, roadway transportation accounts for the highest proportion and plays an important role in China’s logistics system.

LTL transportation is one of the faster-growing areas in the roadway transportation market in recent years. It mainly targets freight demand between industrial production, commercial circulation, and other enterprises. It falls between express delivery and full-vehicle logistics in terms of cargo weight segment and market size. Express delivery is a segmented market formed by the extension of LTL transportation to high-end industries, mainly referring to fast and stable LTL transportation services with wide coverage, which has obvious characteristics of large-scale network operation.

Compared with the highly concentrated express delivery market, the LTL transportation market is very fragmented. Overall, the entry threshold for the LTL transportation market is low. Individual private car owners can carry out dedicated line transportation based on contract orders. At the same time, the LTL transportation market has high growth barriers, with a large number of small-scale market entities. Most enterprises develop slowly, the industry concentration is very low, and there are only a handful of large enterprises.

From the supply and demand sides, the LTL transportation market consists of three distinct segments: full-network express delivery, regional networks, and dedicated logistics, corresponding to three different types of enterprises: full-network express delivery, regional networks, and dedicated logistics. The industry has been accustomed to observing the LTL transportation market as a whole, and it is generally believed that its market size is large and competition is highly fragmented. In particular, there are huge integration opportunities for hundreds of thousands of long-tail dedicated logistics enterprises in the future, and it is expected that leading enterprises with a market value of hundreds of billions will emerge.

The high-growth and low-concentration market characteristics make the full-network express delivery market the preferred choice for major express delivery companies to “cross over” into the LTL market.