Regionals' Shifting Challenge.

BYLINE: John Gallagher

Competing for freight in the country's dense manufacturing markets has always been a challenge, but severe weather during the 2006-2007 winter season and a lingering freight recession is making it even tougher for LTL carriers to build business in the Midwest and Southeast.

"It's affecting us from a pure revenue standpoint - it's no secret that the economy is struggling in the Midwest," said John O'Sullivan, president of YRC Worldwide regional subsidiary USF Holland.

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"We're seeing volumes down in the secondary market for the automotive industry, but also the whole pie is getting smaller. Because the Big Three automakers are struggling, as that industry goes down, the secondary suppliers are not as busy, so it's a drag on the whole Upper Midwest region."

"The Southeast and Midwest are huge regional markets," said Rick O'Dell, president and CEO of Saia, a Duluth, Ga.-based $875 million LTL carrier that operates heavily in the two regions.

"With more customers using overnight and second-day delivery, more traffic is flowing …