About half of merchants say their business is doing well, but only 15% say they’re doing significantly better than a year ago. If things feel fine but nothing is improving, what’s holding merchants in place?
For many merchants, the answer sits in the half of the shipping operation they’ve never optimized: Freight.
The insights in this article come from our latest Merchant Insights webinar, where experts discussed the biggest challenges merchants are facing today and how shippers can connect their parcel and freight workflows to streamline fulfillment.
Stability looks a lot like health
Holding steady feels good right now. Costs are up, consumer spending is uncertain, and the headlines haven’t been kind. Staying level can feel like a win.
But it isn’t growth. ShipStation’s new Merchant Insights Report suggests merchants know where the pressure comes from. Some 62% say high shipping and freight rates limit their growth, well ahead of warehouse space, the next most common challenge at 34%. Three-quarters say their shipping costs rose over the past year.
When shipping sets the ceiling, fixing it evolves from a back-office project to a growth strategy.
See parcel and LTL quoting, booking, and tracking in one dashboard.
New to ShipStation? Book a 30-minute setup call with our team and get a $25 Visa gift card after the meeting.
The second shipping operation
Many merchants have already worked on parcel. They compare carriers, automate labels, and connect their sales channels. That effort pays off.
Freight, meanwhile, got whatever attention was left. According to the report, 78% of merchants ship freight, and 58% of those use a provider that isn’t integrated with their parcel platform. It’s the only part of logistics where more merchants hand the work to an outside provider (45%) than handle it in-house (33%).
of merchants say high shipping and freight rates limit their growth
ShipStation’s 2026 Merchant Insights Report
of merchants who ship freight use a provider that is disconnected from their parcel platform.
ShipStation’s 2026 Merchant Insights Report
The result is two shipping operations living under one roof. One is automated and measured. The other runs on phone calls, separate quotes, separate tracking, and invoices that arrive from two directions.
What the freight market is telling you
The macro picture matters here because it shows why you can’t afford to leave freight unmanaged.
Freight has been in a three-year downturn, and the speakers agreed it’s starting to ease. Anthony Harris, SVP of Sales at XPO, explained why less-than-truckload (LTL) tends to feel the shift first.
“Truckload is five times the size of LTL. So when you see a little bit of tightening in the market on the truckload side, the ripple into LTL is a much bigger impact,” said Harris.
During the downturn, cheap truckload capacity pulled in freight that might otherwise have moved LTL. Pat Martin, Founder of Venture 53 (formerly Estes Express Lines) sees more demand building behind it.
“There’s a lot of money that’s been committed to the United States of America to drive domestic production of lots of different goods, lots of different industries. We’re seeing data centers being built like crazy. And the flow of freight from an LTL perspective is unbelievable in that space,” said Martin.
That build-out is a slow one. Both guests put nearshoring at roughly three years to fully take shape. In the meantime, Mike Grayson, CRO and EVP of LTL at ShipStation Global, pointed to the pressures that could hold demand back.
“You’ve got $6 a gallon diesel out there. You’ve got interest rates that are high,” said Grayson.
So the open question is the first quarter of 2027. Nobody on the panel predicted a boom. They described a market that keeps shifting, which rewards the merchants who can compare options and adjust quickly over those locked into one answer.
Execution is the barrier
Martin has watched carrier and broker communication move from paper to application programming interfaces (APIs), and the technology gap has closed.
“Technology is not the barrier anymore. That’s not the issue. The issue will probably always be execution,” said Martin.
That should change how you look at your own operation. If connected freight is available, the question isn’t whether the technology exists. It’s whether freight runs as a managed workflow or stays an afterthought. And visibility is what makes it manageable.
In the report, 80% of merchants say technology with real-time visibility is important or very important, and 74% call a single provider for parcel, freight, and warehousing important or very important.
of merchants say technology with real-time visibility is important or very important.
ShipStation’s 2026 Merchant Insights Report
of merchants call a single provider for parcel, freight, and warehousing important or very important.
ShipStation’s 2026 Merchant Insights Report
Harris explained why shared data matters on the carrier side, too.
“Data is king, right? Our ability to share that data in such a robust fashion today does enable both of us to make better, more intelligent decisions and react faster in the marketplace,” said Harris.
See parcel and LTL quoting, booking, and tracking in one dashboard.
New to ShipStation? Book a 30-minute setup call with our team and get a $25 Visa gift card after the meeting.
Where the growth shows up
Here’s the opportunity that gets missed. Freight isn’t only a cost to manage. It’s a way to grow. Anthony described the point where parcel stops making sense.
“It just means more and more parcel boxes. And at some point, it would make sense for you to say, ‘Hey, I’m better off to put those boxes onto a pallet and ship that in a less-than-truckload environment,’” said Harris.
Martin put a range on it.
“The big thing to know is that the 150-pound range, up to 10,000 to 15,000 pounds, is the sweet spot for LTL,” said Martin.
One pallet gets one label instead of a label on every box, which means less handling for you and a simpler delivery for the person receiving it. And the upside goes beyond savings. If you’ve sold parcel for years, there’s likely LTL business sitting with your customers that someone else is shipping.
Martin sees an even bigger payoff.
“Maybe even more important than that is using LTL to get in the door to get that parcel business. So they’ve got two things they can do that they’ve never had before,” said Martin.
Take your freight strategy to the next level
You can read the takeaways here, but a recap can’t capture how people with decades in freight talk about what’s coming.
“If we sit here ten years from now and talk about what we saw the last ten years, I think all of us would be surprised at what comes and what doesn’t,” said Martin.
In the full, on-demand webinar, you’ll hear:
- The outlook: a candid read on the rest of 2026 and what could change in early 2027
- The LTL tipping point: when to move from parcel to pallet, and why
- What’s next: how AI, dynamic pricing, and connectivity are reshaping freight
See parcel and LTL quoting, booking, and tracking in one dashboard.
New to ShipStation? Book a 30-minute setup call with our team and get a $25 Visa gift card after the meeting.
Gift card issued after completing a scheduled meeting with a ShipStation representative. Limit one per business. Current customers excluded. Offer subject to change.
