Living off one’s savings? The regional LTL dedicated lines are gradually disappearing.

■

Over time, the supply sources of the wholesale markets on which the dedicated line relies have undergone significant changes.

The prosperity of dedicated lines stems from From 2005 to 2015, 80% of regional dedicated‑line services were established during this period; since 1998, the market has afforded these lines their most prosperous decade. Amid natural selection, after three years of the pandemic, dedicated‑line services entered a phase of adjustment in 2022.

Amid the digital wave, express delivery has kept pace with the times—from electronic waybills to order‑tracking—while dedicated‑line services have begun to slide from their peak into a trough, leaving most operators struggling to adapt. Slow to respond to market shifts, they have failed to standardize processes or address gaps in their traceability systems, and by failing to innovate and meet customers’ evolving needs, these dedicated lines find themselves on the defensive, feeling constantly hampered and unable to move forward. ……

▍ The Golden Decade of Regional Express Lines

Since the launch of reform and opening-up, the lagging development of the distribution sector under the state‑owned system has given rise to the prosperity of wholesale markets. As ancillary enterprises to the wholesale industry, numerous specialized freight‑forwarding companies—large and small—have grown and expanded by leveraging these wholesale markets. The commercial sector has completely decoupled from the supply‑and‑marketing system, and as markets have evolved, centralized collection, distribution, and sorting have increasingly become indispensable supporting services. As the table below shows, the growth of regional dedicated‑line logistics has been concentrated primarily in the provincial capitals of the Central Plains and North China, with the distribution industry as its main customer base, and it has established an extensive, deeply‑woven regional network. The period from 1995 to 2013 was a phase of concentrated outbreaks.

The above table allows us to draw the following conclusions:

First, regional less-than-truckload (LTL) shipping has grown in tandem with the wholesale industry. The growth of regional less-than-truckload (LTL) shipping coincided with China’s golden decade of economic expansion. During this period of rapid economic development, the wholesale sector played a pivotal role. In key metropolitan centers such as Zhengzhou, Linyi, and Shenyang, wholesale market complexes served as hubs, providing regional dedicated‑line services with a unique opportunity to capitalize on the concentrated flow of cargo within specific geographic areas.

Second, the collection‑on‑delivery service helps bridge the funding gap during growth. In the regional LTL sector, the capital shortfall is substantial; precisely because of this, the value‑added collection‑on‑delivery business provides a powerful channel for pooling funds. By capturing these funds without cost and charging handling fees, regional dedicated‑line carriers secure the lifeblood needed to fuel their expansion.

Third is B‑to‑B supply sources are well suited to regional less-than-truckload (LTL) operations. Looking at the cargo mix of regional dedicated routes—most evident in the building materials and auto parts sectors—shipments tend to originate from concentrated pickup points and terminate at fixed delivery locations, making both front‑end and back‑end processes highly amenable to consolidation. With relatively low customization requirements, high shipment frequency, and predictable batch sizes, these dedicated routes have benefited from such operational characteristics, enabling rapid growth over the past decade.

▍ LTL Dedicated Lines in Urban Renovation Projects

The exit of low-end logistics parks from the stage of history is an inevitable trend. Within Shimen Street, Baiyun District, Guangzhou, there are a total of… Of the 20 logistics hubs, in accordance with the Baiyun District’s plan for the remediation and upgrading of logistics parks, 9 sites—covering a total of 271,800 square meters of collectively owned land—were acquired and brought under state control in 2019. At present, Shimen Street is advancing the remediation and upgrading of the remaining 11 logistics parks, encompassing 1.2552 million square meters. As of December 2020, work had been completed on 7 of these sites, with 888,700 square meters cleared and vacated.

Lin’an Logistics in Baiyun District covers an area of… Covering 429,000 square meters, the site leverages its unique advantages to proactively align with government development plans, accelerating renovation and upgrading to create a smart supply-chain town under the “Internet Plus Industrial Cluster” model. To date, it has completed rezoning and transformation into an international supply-chain headquarters base—the Lin’an Supply-Chain Town. Several dedicated logistics routes have been relocated to Foshan’s Sanshui District, Zhaoqing’s Sihui City, Guangzhou’s Huadu District, and other nearby areas. For instance, Shenghui Group and Shengfeng Group have chosen Foshan’s Sanshui District.

For reasons of taxation and external image, it is an inevitable outcome that Baiyun District—primarily driven by the digital economy and air logistics—gradually shifts toward developing high-end logistics industries. The more than a thousand specialized freight lines that have relocated have… One-third opted to exit the industry. However, at the operational level, this has had no impact on Guangzhou’s freight rates or service quality.

At the Gaoqiao Logistics Market in Changsha, after more than three months of guidance and relocation efforts, the market—operating for over a decade—has… On December 31, 2015, the complete relocation and closure of the market was achieved. In accordance with the Municipal Party Committee and Municipal Government’s three-year plan for upgrading and transforming the Gaoqiao Market area, following the relocation of the Gaoqiao Logistics Market, the 188 commercial buildings—totaling nearly 100,000 square meters—will undergo comprehensive renovation and a shift in business formats. Building on the existing property base, the plan is to develop a modern commercial model that integrates offline experiences with online transactions and unifies domestic and international trade, ultimately establishing Changsha’s first “e‑commerce village.” As for the dedicated routes freed up, enterprises operating on lines 1 through 3 have largely chosen to exit the market, while those remaining are primarily regional network‑based dedicated services.

▍ Why is there less cargo on the regional LTL dedicated line?

Over time, the supply sources of the dedicated lines—on which they rely—have undergone significant changes. How to adapt and secure sufficient cargo volumes to fuel growth is the core challenge currently facing regional dedicated‑line operations.

The freight sources for dedicated highway routes primarily come from three channels: transshipment cargo originating from the downstream extension of other interprovincial dedicated lines, third-party logistics, and goods from the commercial and manufacturing sectors, as well as retail shipments from wholesale markets destined for rural towns.

These three categories of cargo each have their own distinct characteristics: transshipment cargo is a sort of “half‑hearted” business—used to fill gaps in the off‑season but abandoned when the peak season arrives; while cargo originating from manufacturing and third‑party sources is subject to stringent… KPI assessments and lengthy payment cycles must be endured, while LTL freight rates in wholesale markets are high and payable on delivery. With additional revenue streams such as cash-on-delivery, insurance, and delivery fees, this type of cargo has long been the preferred source for regional LTL carriers.

The dedicated line enters In 2019, as the market landscape evolved, a wave of network‑based freight companies emerged—such as Yimidida, Jumeng, Dekun, and others—elevating their capabilities in areas like infrastructure development, system integration, cargo acquisition and street‑level outreach, operational management, and brand building, while widening the gap with regional dedicated‑line operators.

Regional express lines enter In 2019, a widespread decline in shipment volumes was keenly felt. A provincial network that once handled 100 delivery routes and processed 150,000 shipments daily now struggles to reach even 100,000. Most business owners sum up the situation with a single word: “endure.” With operations teetering on the brink of survival, where are all those goods going, and what has led to this predicament? In my view, the root causes can broadly be categorized into the following four types:

On that day, the bicycle was eroded by timed delivery. Automotive parts and hardware products for For Tier 2 and Tier 3 cities within 50 kilometers, the most cost‑effective and fastest way to handle urgent shipments is by bicycle. Bicycle delivery eliminates the need for regional dedicated‑line consolidation and sorting, and in cases involving single‑product shipments, it captures a significant share of the high‑quality cargo that would otherwise flow through those regional lines.

As a result, numerous bicycles are scattered around the wholesale market; over time, they have become increasingly organized and coordinated, giving rise to designated pick-up points. →Single‑route delivery → Contact the consignee to arrange receipt → A standardized process for monitoring unloading quality.

The share of large-item express delivery and online freight services has increased. In the past, if you wanted to ship a package weighing several tens of kilograms… “Large items” used to be difficult to have picked up at your door by courier companies, but that’s changing. Since the launch of its standard‑delivery service, monthly volume has grown by more than 30%, and Shenzhen has become one of the regions with the highest pickup volumes under this service.

The express delivery industry’s foray into the less-than-truckload (LTL) sector is booming, with volumes steadily increasing. Companies like Debon, Yousu, SF Express, and the “Three通One达” network have all entered the large‑item logistics space. As a result, some shipments that previously would have been routed via dedicated LTL lines are now being sent directly by express carriers, thanks to their faster transit times, enhanced security, and end-to-end tracking capabilities.

Moreover, this trend is becoming increasingly pronounced, as courier companies are all stepping up their investments in large‑item delivery. Consequently, in the years ahead, it may become ever more difficult for less‑than‑truckload (LTL) express carriers to handle such shipments. For small shipments under 100 kilograms, LTL‑specialized freight is once again being eroded by express delivery services.

The market consolidation in the express delivery sector is largely complete. Meanwhile, publicly listed delivery giants, armed with substantial capital, have flocked into the LTL (less-than-truckload) express‑freight industry, swiftly capturing a significant share of the market. At the same time, a new wave of LTL platforms has ramped up investment to seize market share. All these players are vying for business that once belonged to small and medium-sized dedicated‑line carriers.

Wholesale inventories have declined, while direct shipments have increased. The functions of wholesale markets are gradually evolving. As logistics costs and delivery times become more manageable, the wholesale sector is increasingly separating sales from warehousing. Shipping from the Yangtze River Delta now incurs virtually no cost or time difference compared to shipping from provincial capitals, leading an increasing number of distributors to centralize their distribution warehouses.

In recent years, with the rapid growth of e‑commerce, online sales have become the primary sales channel for many businesses, and numerous manufacturers now sell their products directly over the internet, reaching consumers face-to-face. Since we’re now serving end‑consumers, goods that were previously sold through distribution channels or brick‑and‑mortar stores are now being “broken down into smaller shipments,” bypassing channel partners and decentralized warehouses and going straight to customers via express delivery. As a result, less‑than‑truckload carriers and dedicated‑line logistics providers that once handled most of this business are clearly seeing a noticeable drop in their shipment volumes.

Market evolution and share concentration among sellers. From Taobao to Suning, and from Pinduoduo to JD.com, these e‑commerce service providers for fast-moving consumer goods are now expanding into retail outlets, moving beyond JD.com, Taobao, and Suning to… With rapid market penetration in Tier 2 and Tier 3 cities, these companies often win favor from local governments, securing subsidies on land, rent, taxes, and other fronts. They swiftly expand into second- and third-tier urban centers, building their own logistics networks—a standard configuration adopted by players such as Cainiao, JD Logistics, and Suning Logistics.

Moreover, in recent years, the rapid growth of e‑commerce has prompted leading logistics firms such as Cainiao, JD.com, and Suning to deploy cloud warehouses and forward‑stocking warehouses. Many companies now ship their goods directly to these forward‑stocking facilities via full‑truckload or large‑volume shipments for inventory preparation. Shippers appear increasingly receptive to this model, which in turn has enabled a portion of logistics operations to… “Consolidating fragmented shipments into full‑truckload or large‑volume consignments” means that goods that previously might have been shipped via less‑than‑truckload (LTL) are now dispatched directly to forward warehouses in full truckloads or as high‑value, bulk shipments. From there, these warehouses use express delivery or same‑city distribution to reach B‑ and C‑segment customers. This represents an emerging trend; in the future, many shipments that once traveled on dedicated LTL routes could disappear altogether, thanks to the proliferation of cloud warehouses and forward warehouses.

Business is changing, as the internet gradually moves toward… With B2B market penetration, the rapid growth of e‑commerce, and the express delivery industry expanding into high‑value freight segments, small and medium‑sized dedicated‑line LTL carriers are acutely feeling a decline in volume—particularly in “small parcels”—while what remains are mostly low‑margin “large shipments.” Faced with this reality, these companies must first recognize the shift, adapt accordingly, and leverage their “small but nimble” strengths in timeliness, service, and flexibility to retain existing customers or attract new ones. Otherwise, they will find themselves increasingly struggling—or risk being phased out altogether.

▍ The reasons behind the gradual disappearance of regional LTL dedicated lines

Does the dedicated line still have any room to survive, and where should it go from here? This is the dilemma that plagues most… Regarding issues with dedicated lines 1–3, regional network‑based dedicated‑line providers that serve a specific area remain relatively confident about the future, with volumes continuing to grow. Adapting to customers’ evolving needs has become the central focus of transformation for regional dedicated‑line services.

Prior to 2016, dedicated‑line carriers enjoyed a stable base of freight volume and strong trust from shippers, leading most shippers to entrust these carriers with collecting payment on their behalf. This arrangement resulted in substantial cash reserves for the carriers. Consequently, many began diverting these funds to other ventures—purchasing vehicles, acquiring retail outlets, aggressively expanding their operations, and even investing in industrial parks or real estate.

Any investment initiative necessitates boosting cash flow, prompting companies to lower prices to compete for freight and expand their collection‑on‑delivery business. Over time, this vicious cycle leads to impaired liquidity, making it difficult to settle payments with shippers on schedule. As a result, Henan, Shandong, and Shanxi have each experienced multiple cases of express‑freight “runaway” incidents—where carriers abscond with funds. These incidents have dealt a severe blow to the reputation of independent operators and specialized line‑haul firms in the LTL sector. Fearing non‑payment, shippers have increasingly shifted their cargo to well‑known national LTL carriers as a risk‑mitigation strategy. Meanwhile, some shippers are also opting for mobile‑payment collections and adopting practices such as releasing shipments only upon notification, no longer entrusting payment collection to dedicated line‑haul services.

Digital logistics platforms are gaining ground. As the digital economy continues to expand, companies like Huolala and Manbang have entered the dedicated‑line market and are steadily evolving into comprehensive logistics enterprises—much like… In 2017, Huochebang entered Linyi, consolidating full-truckload freight and trucking resources. It offered daily subsidies to both carriers and shippers, along with tablet‑based delivery support and additional incentives. Today, the major dedicated‑line, large‑ticket platforms—namely FaHuobang, Lanqiao Dedicated Line, and Jintu.com—each serve distinct purposes, yet they are all ramping up their presence in Linyi. As Linyi is known as a logistics hub, capturing this market represents a landmark, milestone‑level achievement for these specialized platforms.

The pace of cargo‑source diversion is accelerating. Thanks to Huolala’s standardized processes, dynamic pricing, a transparent settlement and tax‑invoice system, and a membership‑based subsidy framework, an increasing number of dedicated‑line carriers have become reliant on its capacity, developing strong transaction stickiness through repeat business and gradually replacing the original lines, turning them into affiliated dispatch hubs. As cargo sources continue to shift, the operating space for small dedicated‑line operators will shrink further, ultimately leading to the collapse of numerous smaller players with limited competitiveness and monotonous route networks.

Competition for order acquisition. Huolala has secured a leading position in the freight‑carrying capacity market by offering standardized response times, phased order‑subsidy programs, and a robust tracking, settlement, and compensation system. Due to the absence of key modules—such as electronic waybills, pricing, traceability, compensation, invoicing, and settlement—in traditional dedicated‑line services, coupled with a lack of standardized operational procedures, commercial freight manifests have come under the control of platform‑based operators. If the service capabilities of dedicated‑line carriers fail to improve, local players will inevitably face ongoing diversion of cargo sources.

Price competition is fierce. Huolala focuses on attracting users and securing orders; as the platform accumulates a sufficient volume of orders, it leverages order density, network coverage, and data analytics to intelligently match idle capacity with freight demand. This approach further enhances price transparency, meeting shippers’ evolving needs for fragmented, high-frequency, and time-sensitive deliveries, while also improving overall operational efficiency.

The three-year pandemic proved to be the final straw for these small, specialized freight lines. During the outbreak, the flow of goods was severely restricted, yet fixed expenses—such as stall rents, employee wages, and vehicle loans—remained unavoidable. Many independent operators and regional dedicated‑line services were left struggling to stay afloat, with some ultimately forced to shut down. With the pandemic finally over, many of these lines had pinned high hopes on this year, planning to make a major push. But after the first half of the year, the situation took a sharp turn for the worse. In the post‑pandemic era, economic recovery has fallen short of expectations, and reports of individual dedicated‑line carriers and regional LTL operations closing their doors have been mounting. Of the remaining small specialized lines, very few are now able to hold on.

▍ How should regional LTL dedicated lines respond to market changes?

During its rapid growth, the dedicated line neglected many critical areas, essentially relying on past achievements. It has been reluctant to invest in brand building, facility upgrades, and digital transformation, continuing to depend on its tried-and-true, albeit limited, approaches.

As pressure mounts, cash reserves dwindle, and freight volumes decline—particularly for high‑value small‑ticket shipments—the regional LTL dedicated‑line market is struggling to stay afloat.

Faced with declining cargo volumes, specialized freight lines are in a state of anxiety, urgently seeking a path to survival and continually grappling with sluggish growth. Until these companies address their internal shortcomings, they increasingly look to franchise networks to secure additional shipments and business.

However, as the economy entered a downturn, the structure of supply sources underwent significant changes. Whether the original store‑based setup and the retained‑funds pool could continue to operate as before has clearly become a pressing issue that business owners must confront. Yet most regional dedicated‑line operators, weighed down by strong inertia, have been unable to make timely adjustments. Looking ahead, only those companies that pay meticulous attention to every detail, ensure smooth handling of each shipment, and maintain tight cost control will endure.