The ‘ingenious strategy’ behind most truckers’ least favorite week of the year: International Roadcheck

International Roadcheck Week is hardly the sexiest topic in trucking, but it is a darn-tootin’ important one. Inspectors in the U.S. and Canada halt tens of thousands of trucks for vehicle inspections for a few days every summer or early fall. They remove thousands of trucks and drivers from the road; in 2021, 16.5% of inspected vehicles were put out of service along with 5.3% of drivers.

It’s uncommon for truck drivers to actually get their vehicles inspected at random during most of the year. To avoid International Roadcheck Week, many truckers simply don’t drive during that period of time — which, presumably, means more unsafe vehicles and drivers on the road outside of the inspection blitz. It’s a question that ate at Andrew Balthrop, a research associate at the University of Arkansas Sam M. Walton College of Business.

Around 5% fewer one-person trucking companies are active during International Roadcheck Week. But Balthrop and his fellow researcher, Alex Scott of the University of Tennessee, found a major upside to the inspection blitz — even with all the folks who avoid it. According to their working paper published in March 2021, vehicles are safer a month before and after the inspection period. There’s a 1.8% reduction of vehicle violations, according to Balthrop and Scott’s analysis. Surprise inspection blitzes don’t result in the same uptick of compliance.

I caught up with Balthrop about his research last week at FreightWaves’ Future of Supply Chain conference, and we chatted again on the phone this week about his findings on International Roadcheck Week.

Enjoy a bonus MODES and a lightly edited transcription of our phone interview:

FREIGHTWAVES: For our readers who are not aware of what Roadcheck Week actually is, can you explain a little bit about what it and why it is important to drivers and companies?

BALTHROP: “The International Roadcheck is part of an alliance between the inspectors in Canada and the ones in Mexico and the U.S. to have a unified framework for making sure trucks are safe to operate. That should make it easier to go across borders when you have this kind of unified structure.

“In the U.S., one of these CVSA inspection blitzes is the International Roadcheck that happens for three days in the summer. Usually it’s a Tuesday, Wednesday and Thursday. And usually it’s the first week in June.

“And in it, they focus on Level One inspections, the North American Standard Inspection where they inspect the driver records, the hours of service, the licensure and I believe medical records as well. Then they inspect the truck. It’s an in-depth inspection where the inspector will actually crawl under the truck to look at various things. And these inspections, from the data that I’ve seen, take about a half an hour on average.

“During the Roadcheck Week, they’ll do about 60,000 inspections, so 20,000 a day. They’re going to pull over a lot of trucks, and this can cause a little bit of congestion at the weigh stations and the roadside inspections localities as the inspectors are doing these inspections.”

Roadcheck Week doesn’t catch all truck drivers, but it has a long-lasting benefit to safety

FREIGHTWAVES: So, can most drivers kind of expect to be pulled over? How likely is that?

BALTHROP: “There’s 1 million or 3 million trucks on the road, somewhere around there on any given day. With 20,000 inspections, most drivers still will not get inspected, but there’s going to be a higher proportion of drivers inspected.

“You’re more likely to get inspected on these days. If you don’t have a recent inspection on your record, or if you have a bad recent inspection on your record, you’re more likely to be pulled over on these days.”

FREIGHTWAVES: Your research focused on that it’s just unusual that this inspection is announced, that it’s planned. We were talking before about how normally, if you’re trying to assure quality or compliance, you would not announce an inspection in advance. It would be more of a surprise-type situation.

Can you walk us through why that’s so unusual, or what’s the rationale that you see behind announcing it in advance?

BALTHROP: “It is unusual, and on the surface, it doesn’t make much sense, but it turns out to be kind of an ingenious strategy. So I’ll walk through it here.

“Over the course of a year, there’ll be 2 million inspections of 3 or 4 million trucks out there. The average rate of inspections is pretty low. It’s not uncommon for truckers to go years without having an inspection. With this low inspection intensity, the FMCSA has sort of a problem of, how does it get anybody to abide by the regulations?

“I’m a jaded economist, and I don’t worry or consider too much ethics and morality and all that kind of stuff. It comes down to incentives for drivers to follow these inspections. The incentives do guide behavior. So, how could the FMCSA incentivize drivers to follow these regulations more closely and adhere to the standards?

“They do this by announcing the blitz. This does two things. On one side, it allows everybody to prepare in advance. There’s a bunch of anecdotal evidence out there that people do prepare for these blitzes in advance. They will have their trucks inspected beforehand for any problems. They’ll time maintenance and upkeep in advance to make sure that their vehicles are in order. “They’ll be a little bit more cognizant of the driver-side regulations. One thing we notice in our study is that hours-of-service violations really drop during these extensions, because people see them coming. They don’t fudge the books in any way.”

Owner-operators can evade Roadcheck Week. Big carriers, not so much.

BALTHROP: “The issue with the announcement, on the flip side, is that it allows people to just dodge the inspection entirely. For a long time, people have talked about how owner-operators and smaller carriers time their vacations for this particular time. They could do this for a couple reasons. To avoid the hassle is a nice way to put it, but it also allows you to be noncompliant to avoid the high-intensity inspections.

“You have this balance here that on one side you get the behavior you want with people complying with regulations. That’s the behavior the FMCSA wants. But on the flip side, you get a bunch of people that are kind of outright dodging inspections.

“When you compare these two things on balance, the policy is actually pretty effective because you get a lot of people focused on maintaining their trucks and obeying the rules during that particular week. Especially with the vehicle maintenance stuff, that lasts a long time.

“In our research, we saw that vehicle violations, a month before and up to a month afterwards, is when you still notice your vehicle violations. That trucks are kind of better maintained around these blitzes.

“The ingenious aspect of it is that the FMCSA, by concentrating their inspection resources all at one time and announcing it, they’re making it clear that they’re serious about enforcing these regulations and everybody prepares for it. For the number of inspections that are happening, you get fewer tickets than you would have otherwise expected.

“The FMCSA, they’re putting people through a little bit of a hassle, but they’re not having to write a bunch of tickets to get people to comply. They’re not really punishing a whole bunch of people because, by making this apparent that this is going to happen, people comply and the FMCSA gets what they want essentially without having to come down on carriers too hard.”

A convenient time for a vacation, indeed

FREIGHTWAVES: OK, interesting. And how does this pattern of shutting down, how does that compare for an owner-operator versus a driver for a big fleet?

BALTHROP: “If you’re a motor carrier with thousands of power units, you can’t just pack up and not do business on a particular day. They just don’t have that option. So they get inspected at a higher intensity, and you see the larger carriers kind of more focused on making sure that they’re prepared for these inspections. With so many inspections, the larger carriers are going to be inspected at higher rates. You can really damage your reputation if your equipment isn’t in order on this particular day.

“Versus the smaller carriers, especially if you’re talking about a single-vehicle fleet, an owner-operator type, it is not that difficult to just not work for those three days. And so you see a lot about that.

“In terms of what the roadway composition looks like, if we look at inspection data and relative to a typical day with the usual inspections, on these Roadcheck days, you have about 5% fewer owner-operators on the road than you otherwise would expect.”

FREIGHTWAVES: Wow. And when you say owner-operators, you also mean just like fleets with just —

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

BALTHROP: “You know, you see a little bit of effect with the smaller fleets, below six vehicles, but it basically disappears by the time you get to a hundred vehicles.

“This effect is being driven by smaller carriers staying off the road in terms of avoidance. You see this goes also how you would expect; it’s also older vehicles that stay off the road. This is correlated with carrier size. The larger carriers use newer vehicles and owner-operators tend to use some of the older vehicles. But it’s particularly the older vehicles that are off the road.

“This makes intuitive sense. Older vehicles are more costly to keep compliant. Maintenance is more costly, and they’ve been around longer so there’s time for more stuff to have broken essentially.

How a truck driver gets stopped for inspection

FREIGHTWAVES: Can you explain a little bit more, the idea of having this inspection history and why it would benefit a larger or small carrier?

BALTHROP: “Getting flagged for inspection is sort of random, but not totally. If somebody notices something obviously wrong with your truck, that’s ground for a more in-depth inspection. Or if you get pulled over for some other reason, this can be grounds for inspection of some type.

“But there’s also the inspection selection service. The computer program that is random, that it randomly flags people in for inspection, but it’s based on your inspection history.

“So if your firm hasn’t been inspected recently, or if your carrier doesn’t have a very dense inspection history, you’ll be more likely to trigger that system to pull you in and have you inspected. If you have a dense inspection history, you’re less likely to get inspected.”

FREIGHTWAVES: So how do you get pulled over for inspection? As a person who only drives a passenger car, my main interaction with being pulled over is, I’m driving down the freeway or wherever, and I get stopped by the police. How does it work for a truck driver? How does getting pulled over or inspected work in that way?

BALTHROP: “The law is that you cannot pass a weigh station without pulling in and getting weighed. At that point they may flag you to be inspected. Now, in the past decade or two, there’s been a bunch of electronic devices that are installed in cabs. You may have heard of PrePass or Drivewise. This allows you to pass weigh stations.

“I don’t have data on how many trucks have the in-cab devices. But from a trucking perspective, they’re so convenient that you don’t have to stop every time you cross a state line. I think the vast, overwhelming majority of trucks have some sort of one of these electronic devices. The DOT inspectors at these roadside inspection points have a dial they can twist essentially about how many people they want to inspect.

“So during the roadcheck inspection week, they’ll crank that dial all the way up and pull everybody over. And if they get too backed up, they might crank it back down a little bit and so on.”

FREIGHTWAVES: OK, interesting. It reminds me of a highly sophisticated E‑ZPass.

A $10 million-plus expense to trucking companies every year … but it’s worth it if just one fatal crash is avoided

FREIGHTWAVES: Zooming out, when we hear about large truck crashes, something like a vehicle maintenance issue is not really the most sexy explanation. But just looking at the FMCSA data, in 29% of all truck crashes, a major factor is brake problems. So it seems like a lot of the truck crashes on the road are caused by vehicle maintenance, versus something like the driver using illegal drugs or some other sort of more dramatic explanation. Can you speak a little bit to why this sort of vehicle maintenance is important for safety in preventing large crashes?

BALTHROP: “We did a little bit of a back-of-the-envelope cost benefit analysis of this. Let me try and make sure I remember it clearly, but we have it in the paper that the cost of this on one side is that you have the compliance costs the firms are undertaking, and then you have to add to that the delay costs from doing this, and then the cost of the inspection itself, having to pay federal inspectors to do this.

“On the benefit side, it reduces crashes. So when we add up, just looking at the cost of what an inspection is, we don’t have a good idea of how to measure the compliance cost. It’d be fun to measure the delay cost, but I don’t have good enough price data on that to get at that cost.

“But if you look at what the cost of an inspection is, it is something like $100 or $120 is what you would pay to have one of these inspections done privately. A lot of people do this in the run-up to inspections, and have it done privately so that you can fix whatever the problems are and be sure that you would pass the FMCSA inspection.

“With that $120 figure, if you aggregate that up to 60,000 inspections or whatever, and you take that in comparison, I’m going to give you a bad figure here, it’s on the order of $10 million. That is about the value of a statistical human life. Looking at this economically, it’s worthwhile if it saves one human life. If you identify just one faulty brake system that would’ve resulted in an accident, you’re getting some value out of the program.

“When you add those other costs in there, we’re going to need to save a couple of lives, but in terms of cost benefit analysis with this kind of stuff, we’re usually looking at orders of magnitude differences in cost and benefits to say something for sure.

“If you can save just a couple lives, this program will pay for itself.”

Time to start inspecting in the winter

FREIGHTWAVES: Then one last question: Is there any rationale for this program happening in the summer?

BALTHROP: “I think part of it is that for the inspectors this gets much harder and much more miserable to do in winter conditions.”

FREIGHTWAVES: That makes sense.

BALTHROP: “Inspectors are less productive. One of the things that we talk about in the paper, that they have in addition to the International Roadcheck, is that they have Brake Week where they focus a little bit more on brake inspections. You have Operation Safe Driver a little bit later on in the summer, usually in September, where it’s a little bit more focused on passenger vehicles and how they drive around these trucks.

“But there’s not one in the winter time. There’s an unannounced brake check that usually happens in May, a surprise inspection that’s just one day. But you’re right in pointing out that it might be worthwhile having one of these in the wintertime. You have this periodic high-intensity inspection that kind of incentivizes everybody to be compliant through the summer.

“But there’s nothing in the winter, so that’s an area. But if I was managing the FMCSA, that would be one of the first questions I ask, ‘Why don’t we have one of these in the wintertime?’”

FREIGHTWAVES: That makes sense. Maybe they can do it in the South or something. Maybe a Miami January inspection …

That’s it for this special bonus MODES. Subscribe here if you’re not already receiving MODES in your inbox every Thursday. Email the reporter at rpremack@www.freightwaves.com with your own tales on International Roadcheck Week or any other trucking topics.

Why the Northeast is quietly running out of diesel

The nozzle of a diesel fuel pump is inserted into the tank of a commercial truck as its driver looks on the bankground.

The East Coast of the U.S. is reporting its lowest seasonal diesel inventory on record. And some trucking companies appear spooked.

The East Coast typically stores around 62 million barrels of diesel during the month of May, according to Department of Energy data. But as of last Friday, that region of the U.S. is reporting under 52 million barrels.

The sharp increase of diesel prices has been a major stressor in America’s $800 billion trucking industry since the beginning of 2022. According to DOE figures, the price per gallon of diesel has reached record highs — a whopping $5.62 per gallon. It’s even higher on the East Coast at $5.90, up 63% from the beginning of this year.

When relief is coming isn’t yet clear, and experts say higher prices are the only way to attract more diesel into the Northeast.

“I wish I had some good news for the Northeast, but it’s bedlam,” Tom Kloza, global head of energy analysis at OPIS, told FreightWaves.

2022 has seen record-setting diesel prices. (SONAR)

Everyday Americans don’t fill up their cars with diesel, but the fuel powers our nation’s agriculture, industrial and transportation networks. More expensive diesel means the price of everything is liable to increase. Trucks, trains, barges and the like consumed about 122 million gallons of diesel per day in 2020.

Patrick DeHaan, a vice president of communications at fuel price site GasBuddy, reported that retail truck stops are hauling fuel from the Great Lakes to the Northeast, calling it “extraordinary.” We’ve also seen anecdotal reports from truck drivers posting company memos:

pic.twitter.com/yFYyjzYMWE
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) May 11, 2022

#FuelShortage #DieselShortage #SupplyChainCrisis pic.twitter.com/zVmXlshXN0
— Don Ricardo 👑 🇺🇸 🇩🇴 (@NjPier) May 5, 2022

Pilot Flying J and Love’s, two of America’s largest truck stops, told the Wall Street Journal yesterday that they were not planning to restrict diesel purchases, but were monitoring low diesel inventory.

Not unlike every other supply chain crunch we’ve seen in the past few years, the cause of the Northeast’s diesel shortage is multifaceted. A yearslong degradation of refineries is rubbing against the Gulf Coast preferring to ship its oil to Europe and Latin America.

Here’s a breakdown:

1. The East Coast has lost half of its refineries.

As Bloomberg’s Javier Blas wrote on May 4 (emphasis ours):

In the past 15 years, the number of refineries on the U.S. East Coast has halved to just seven. The closures have reduced the region’s oil processing capacity to just 818,000 barrels per day, down from 1.64 million barrels per day in 2009. Regional oil demand, however, is stronger.

Rory Johnston, a managing director at Toronto-based research firm Price Street and writer of the newsletter Commodity Context, told FreightWaves that refining is a “thankless industry,” with intense regulations that have limited the opening of new refineries. The Great Recession of 2008 led to several East Coast refineries shuttering, but there have been more recent shutdowns too. One major Philadelphia refinery shuttered in 2019 after a giant fire (and it already had declared bankruptcy), and another refinery in Newfoundland shut down in 2020.

Billionaire John Catsimatidis owns a small oil refinery in the US East Coast and several hundred gas stations from Pennsylvania to New York:

“I wouldn’t be surprised to see diesel being rationed on the East Coast this summer.” #OOTT #DieselCrisis https://t.co/9g1e5UIf20
— Javier Blas (@JavierBlas) May 11, 2022

2. It’s a financial risk to bring diesel to the Northeast.

The Northeast has increasingly relied on diesel from the Gulf region. Much of that diesel travels to the Northeast through the famous and much-adored Colonial Pipeline. You may remember the 5,500-mile pipeline from last year, when a ransomware attack shuttered it for nearly a week!

It takes 18 days for oil to travel on the Colonial Pipeline from its source in Houston to New York City (or, more specifically, Linden, New Jersey), Kloza said.

That’s a long enough time to prioritize Colonial pipelines financially risky for traders — or, as Kloza said, “incredibly dangerous” — thanks to a concept called “backwardation.”

Backwardation refers to the market condition in which the spot price of a commodity like diesel is higher than its futures price. It’s only gotten stronger over time in the diesel market, Kloza said. So, a company could send off a shipment of diesel and find that it dropped by $1 per gallon in the time the diesel traveled from the Gulf Coast to New York — er, New Jersey. That could mean hundreds of thousands or more in lost profits, so traders often avoid such a fate.

“We’re not in an era where there are any U.S. refiners or big U.S. oil companies who would ‘take one for the team’ and bring cargo in where it’s needed,” Kloza said.

The desperation is showing in New England and the mid-Atlantic regions. New England diesel retail prices are up 75% from the beginning of 2022, per DOE data. In the mid-Atlantic, diesel is up 67%.

It’s not worth the risk, even amid ultra-high prices. As FreightWaves’ Kingston reported last week, the spread between a gallon of diesel in the Gulf Coast and its New York harbor price is usually a few cents. Last week, that swung up to 66 cents.

But that uptick still isn’t justifying moving oil to the Northeast — particularly when traders can make so much more money selling diesel abroad.

3. Of course, we can blame COVID and the crisis in Ukraine.

The catalyst for this diesel shortage, of course, is the ongoing conflict in Ukraine — particularly Europe’s desperation for diesel after weaning off Russian molecules.

As CNBC reported in March, Europe is a net importer of diesel. Europe consumed some 6.8 million barrels of diesel each day in 2019; Russia exported some 600,000 barrels per day of that. Today, Europe has only eliminated one-third of its Russian diesel, so prices are expected to continue to climb amid that transition. Latin America, too, has been clammoring for U.S. diesel.

The Gulf Coast has been happy to provide such diesel, amid “insane” prices for diesel abroad, said Johnston. Waterborne exports of diesel from the U.S. Gulf Coast hit record highs last month, according to oil analytics firm Vortexa. (The records only date back to 2016.)

Naturally, COVID is also to blame for the Northeast’s run on diesel. Those refineries still retained on the East Coast scaled back during the pandemic due to staffing issues. It takes six months to a year to reignite refineries that were previously shuttered, Kloza said.

The ‘everything shortage’ endures

It’s been a tale as old as, well, last year. An industry is quietly hampered by supply issues for years, or even decades, and COVID pulls back the curtains on its unsteady foundation. It’s particularly jarring for commodities we never thought about before, like shipping containers or pallets, but that quietly underpinned our livelihood all along.

Recall the Great Lumber Shortage of 2020? Big Lumber had unusually low stockpiles of wood by the summer of 2020, thanks to a vicious 2019 in the lumber industry shuttering sawmills and the spring of 2020 sparking staffing issues. (There was also a nasty beetle infestation.) Those in lumber expected the pandemic to slow the economy, not ignite online shopping, construction and housing mania. It meant lumber went from around $350 per thousand board feet pre-pandemic to a crushing $1,515 by the spring of 2021. The lumber price roller coaster persists today.

In diesel, there’s no beetle infestation, but there are plenty of other headaches. It all means higher fuel prices on the East Coast, particularly the Northeast, to lure molecules from the Gulf Coast. And, down the line, probably more expensive stuff for you.

Do you work in the trucking industry? Do you want to say that you hate or love MODES? Are you simply wanting to chitchat? Email the author at rpremack@www.freightwaves.com, and don’t forget to subscribe to MODES.

Updated on May 13 with the latest comments from truck stops.

Exclusive: Central Freight Lines to shut down after 96 years

Nearly, 2,100 employees will be laid off right before Christmas. Central Freight Lines is the largest trucking company to close since Celadon ceased operations in 2019.

Waco, Texas-based Central Freight Lines has notified drivers, employees and customers that the less-than-truckload carrier plans to wind down operations on Monday after 96 years, the company’s president told FreightWaves on Saturday.

“It’s just horrible,” said CFL President Bruce Kalem.

A source close to CFL told FreightWaves that CFL had “too much debt and too many unpaid bills” to continue operating, despite exploring all available options to keep its doors open.

Kalem agreed.

“Years of operating losses and struggles for many years sapped our liquidity, and we had no other place to go at this point,” Kalem told FreightWaves. “Nobody is going to make money on this closing, nobody.”

Central Freight will cease picking up new shipments effective Monday and expects to deliver substantially all freight in its system by Dec. 20, according to a company statement.

A source familiar with the company said he is unsure whether CFL will file Chapter 7 or “liquidate outside of bankruptcy,” but that the LTL carrier has no plans to reorganize.

The company reshuffled its executive team nearly a year ago in an effort to stay afloat, including adding the company’s owner, Jerry Moyes, as CFL’s interim president and chief executive officer. Moyes remained CEO after Kalem was elevated to president in July.

“I think it was surprising that there wasn’t a buyer for the entire company, but buyers were interested in certain pieces but not in the whole thing,” the source, who didn’t want to be identified, told FreightWaves. “Part of it could have been that just the network was so expansive that there was too much overlap with some of the buyers that they didn’t need locations or employees in the places where they already had strong operations.”

Third-party logistics provider GlobalTranz notified its customers that it had removed CFL as “a blanket and CSP carrier option immediately, to prevent any new bookings,” multiple sources told FreightWaves on Saturday.

CFL, which has over 2,100 employees, including 1,325 drivers, and 1,600 power units, is in discussions with “key customers and vendors and expects sufficient liquidity to complete deliveries over the next week in an orderly manner,” a CFL spokesperson said. Approximately 820 employees are based at the company headquarters in Waco.

Despite diligent efforts, CFL “was unable to gain commitments to fund ongoing operations, find a buyer of the entire business or fund a Chapter 11 reorganization,” another source familiar with the company told FreightWaves.

Kalem said the company had 65 terminals prior to its decision to shutter operations.

FreightWaves received a tip from a source nearly two weeks ago that CFL wasn’t renewing its East Coast terminal leases but was unable to confirm the information with CFL executives.

Another source told FreightWaves that some of the LTL carrier’s West Coast terminals had been sold recently, but that no reason was given for the transactions.

At that time, Kalem said the company was “working to find alternatives” and couldn’t speak because of nondisclosure agreements. He said executives at CFL, including Moyes, were trying to do everything to “save the company.”

“Jerry [Moyes] pumped a lot of money into the company, but it just wasn’t enough,” Kalem said.

Kalem said he’s aware that a large carrier is interested in hiring many of CFL’s drivers but isn’t able to name names at this point.

“Central Freight is in negotiations to sell a substantial portion of its equipment,” the company said in a statement. “Additionally, Central Freight is coordinating with other regional LTL carriers to afford its employees opportunities to apply for other LTL jobs in their area.”

As of late Saturday night, Kalem said fuel cards are working and drivers will be paid for freight they’ve hauled for the LTL carrier until all freight is delivered by the Dec. 20 target date.

“I’m going to work feverishly with the time I have left to get these good people jobs — I owe it to them,” Kalem told FreightWaves. “We are going to pay our drivers — that’s why we had to close it like we’re doing now. We are going to deliver all of the freight that’s in our system by next week, and we believe we can do that.”

During the outset of the pandemic, Central Freight Lines was one of four trucking-related companies that received the maximum award of $10 million through the U.S. Small Business Administration’s Paycheck Protection Program (PPP). This occurred around the time that CFL drivers and employees were forced to take pay cuts, a move that didn’t go over well with drivers.

“It all went to payroll,” Kalem said about the PPP funds. “Yes, our employees and drivers did take a pay cut over the past few years, and we gave most of it back, even raised pay over the past several months, but it just wasn’t enough to attract drivers.”

FreightWaves staffers Todd Maiden, Timothy Dooner and JP Hampstead contributed to this report.

Watch: Central Freight Lines’ impact on the LTL market

FreightWaves CEO and founder Craig Fuller reacts to the Central Freight Lines news:

“With Central struggling for many years and unable to reach profitability, it makes sense that they would want to liquidate while equipment and real estate are fetching record prices.”

Central Freight Lines statement

Here is the statement given by Central Freight Lines to FreightWaves late Saturday after reports surfaced of its impending closure:

“We make this announcement with a heavy heart and extreme regret that the Company cannot continue after nearly 100 years in operation. We would like to thank our outstanding workforce for persevering and for professionally completing the wind-down while supporting each other. Additionally, we thank our customers, vendors, equipment providers, and other stakeholders for their loyalty and support.

“The Company explored all available options to keep operations going. However, operating losses sapped all remaining sources of liquidity, and the Company’s liabilities far exceed its assets, all of which are subject to liens in favor of multiple creditors. Despite diligent efforts, the Company was unable to gain commitments to fund ongoing operations, find a buyer of the entire business, or fund a Chapter 11 reorganization. Given its limited remaining resources, the Company concluded that the best alternative was a safe and orderly wind-down. As we complete the wind-down process, our primary goal will be to offer the smoothest possible transition for all stakeholders while maximizing the amount available to apply toward the Company’s obligations.

“Central Freight is in negotiations to sell a substantial portion of its equipment. Additionally, Central Freight is coordinating with other regional LTL carriers to afford its employees opportunities to apply for other LTL jobs in their area. Discussions are ongoing and no purchase of assets or offer of employment is guaranteed.”

Brief history of Central Freight Lines

1925	Founded in Waco, Texas, by Woody Callan Sr.
1927	Institutes regular routes in Texas between Dallas, Fort Worth and Austin.
1938	Dallas facility opens as world’s largest freight facility.
1991	Receives 48-state interstate operating authority, expands into Oklahoma.
1993	Joins Roadway Regional Group and begins service in Louisiana.
1994	Expands into Colorado, Kansas, Missouri, Illinois and Mississippi.
1995	Consolidation of Central, Coles, Spartan and Viking Freight Systems into Viking Freight Inc. is announced. Central’s Waco corporate HQ starts closure.
1996	Becomes the Southwestern Division of Viking Freight Inc.
1997	Investment group led by senior Central management purchases assets of former CFL from Viking Freight and reopens as a new Central Freight Lines.
1999	Expands into California and Nevada.
2009	CFL Network provides service to Idaho, Utah, Minnesota and Wisconsin.
2013	Acquires Circle Delivery of Tennessee.
2014	Acquires DTI, a Georgia LTL carrier.
2017	Acquires Wilson; new division created with an increase of 80 terminals.
2020	Wins Carrier of the Year from GlobalTranz. Acquires Volunteer Express Inc. of Dresden, Tennessee.

Source: Central Freight Lines

Warehouse cramming is about to begin — Freightonomics

nVision Global, is a leading Global Freight Audit, Supply Chain Management Services company offering enterprise-wide supply chain solutions. With over 4,000 global business “Partners”, nVision Global not only provides prompt, accurate Freight Audit Solutions, but also providing industry-leading Supply Chain Information Management solutions and services necessary to help its clients maximize efficiencies within their supply chain. To learn more, visit www.nvisionglobal.com

Warehouse space is at a premium right now and with peak season right around the corner, shippers are starting to scramble for space.

Zach Strickland and Anthony Smith look into what shippers are doing to prepare for the end-of-year crunch. They welcome Zac Rogers from Colorado State University to the show to talk through the industry tightness.

The three also talk about the latest Logistics Managers Index results and what they mean for the fourth quarter of 2021.

You can find more Freightonomics episodes and recaps for all our live podcasts here.

Seasonality pushing rejections and rates higher ahead of the Fourth

This week’s DHL Supply Chain Pricing Power Index: 75 (Carriers)

Last week’s DHL Supply Chain Pricing Power Index: 70 (Carriers)

Three-month DHL Supply Chain Pricing Power Index Outlook: 70 (Carriers)

The DHL Supply Chain Pricing Power Index uses the analytics and data in FreightWaves SONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers.

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

The Outbound Tender Volume Index at 15,980 is nominally higher now than basically at any point in the past 12 months with the exception of the week prior to Thanksgiving/Black Friday last year. OTVI captures all electronic tenders, including rejected ones, so when accounting for the rejection rate, we can get an even more accurate look at volumes.

OTVI rose through the back half of May into the national holiday and has risen even further since. Throughout the back half of May and into the middle of June, tender rejections declined substantially. Meaning, current volume throughput is actually understated when comparing OTVI now to OTVI in November 2020. After adjusting for rejected tenders, the accepted outbound tender volume index is just 2.2% below the 2020 peak in November. At that time, OTVI surged towards 17,000, but the rejection rate moved in-kind towards its natural ceiling of 28%. So, the total accepted freight tenders in mid-June is comparable to the peakiest of peak seasons in 2020. Incredible.

However, since the middle of June, tender rejections have begun increasing again heading into Independence Day, a time when many drivers spend time off the road with their families. The move higher in OTVI this week has been driven primarily by higher rejection rates, rather than higher freight demand.

Over the past month, the drivers of freight volumes have continued to be imports and from just about every port. The west coast continues to provide seemingly non-stop container ships, while Houston, New Orleans, Miami and Savannah are seeing very strong throughput as well.

It is van volumes that are driving freight markets higher right now. The Reefer Outbound Tender Volume index has tumbled 25% since its all-time high in the weeks after the polar vortex in February. Since Memorial Day, ROTVI has fallen another 10.5%. This is likely a factor of declining grocery demand, but I would expect the trend to reverse course in the near future as summer festivities accelerate.

Dry van volumes pushed higher in the back half of May and into June while reefer volumes have declined significantly.

SONAR: VOTVI.USA (Blue); ROTVI.USA (Green)

The congestion at our nation’s ports has spread from Los Angeles and Long Beach to Oakland, California. The California coastline is a parking lot of container ships, most of which are full to the brim with imports, awaiting berth. As detailed in the economic section, there are some signs that the reversion is underway with Americans paring back spending on pandemic superstar categories in favor of airlines, lodging and entertainment. But spending remains strong despite the moderation, and low inventory levels offset much of the decline that will occur from slowing demand. Real inventories are 3% higher now than pre-pandemic, but real sales growth is far outpacing inventory growth, leading to the lowest inventory-to-sales ratio in decades.

On the manufacturing side, the ISM Manufacturing PMI expanded in May after declining in April. We’ve been in expansionary territory for 12 consecutive months. New orders, production, imports/exports and employment are all growing. The major issues should come as no surprise: Deliveries are slowing, backlogs are growing and inventories are too low.

In all, there are many, many catalysts to keep freight demand strong for the foreseeable future. Americans are traveling and spending on services at a high clip, but the high savings rate is enabling it to occur without a massive detriment to goods spending.

SONAR: OTVI.USA (2021 – Blue; 2020 – Green; 2019 – Orange; 2018 – Purple)

Tender rejections: Absolute level and momentum positive for carriers

After declining steadily from mid-March to mid-May, the Outbound Tender Reject Index has reversed course heading into Independence Day. This is typical for a national holiday as carriers selectively choose loads to bring drivers closer to home. OTRI now sits above 25% for the first time in June.

One of our newest indices in SONAR gives us the ability to compare markets on as close to an apples-to-apples basis as possible. FreightWaves’ Carrier Trend Market Score indices are divided into two perspectives – shipper/broker and carrier. The scores are positioned on a scale from 1-100 and have values measuring van and refrigerated (reefer) capacity. The higher values represent more favorable trends for whichever perspective. For instance, a value near the high-end of the range would suggest very favorable conditions for carriers in our carrier capacity trend score index.

For the past several weeks, capacity disparities have been driven by import volumes. The markets with the tightest carrier capacity coincide with the nation’s busiest ports. Ontario, California, Savannah, Georgia, and Atlanta all have carrier capacity trend market scores of 100.

SONAR: Capacity Trend Market Score (Carriers – VAN)

By mode. Reefer rejection rates tumbled from it’s all-time high in March to under 35% in mid-June before popping higher over the past two weeks. Reefer rejections are still quite high from a historical standpoint at 38%, but are significantly lower than just three months ago when reefer carriers were rejecting half of all electronically tendered loads.

SONAR: VOTRI.USA (Blue); ROTRI.USA (Orange)

Dry van tenders make up the majority of all tenders, so the van rejection rate mirrors the aggregate index closely. Van rejections have surged from ~23% to ~26% over the past two weeks.

Yes, one-in-four loads being rejected is not ideal, but it’s better than 30%. I am unaware of any meaningful signals that capacity is being added at a rate that would change my outlook. With so many catalysts for demand, and many constraints on drivers including the Drug & Alcohol Clearinghouse, driver training school closures and continued government unemployment benefits, the outlook is tight throughout this year and into 2022. That’s not to say we won’t see improvement as consumers revert to pre-pandemic spending habits and drivers enter or reenter the market. But I’m not expecting any quick reversal of this environment; there are simply too many catalysts driving volume and suppressing capacity.

SONAR: OTRI.USA (2020/21 – Blue; 2020 – Green; 2019 – Orange)

Freight rates: Absolute level and momentum positive for carriers

Throughout June, spot rates have moderated while contract rates have pushed higher. The Truckstop.com dry van rate per mile (incl. fuel) has fallen from $3.21 to $3.11 since the beginning of June, while FreightWaves van contract rates have risen from $2.50 to $2.59/mile, exclusive of fuel.

I still believe the Truckstop.com dry van national average will not retest the post-vortex surge pricing that brought spot rates up to an all-time high of $3.30. But, there aren’t many catalysts to bring spot rates down anytime soon either. Demand is unwavering with continued strong consumer goods demand, humming industrial recovery and a potentially cooling, yet still sizzling, hot housing market. And carriers can’t fill enough trucks to keep up with demand.

Prior to the seasonal movements we’re seeing in tender rejections, routing guides generally had been improving through Q2. We should continue to see a convergence between spot and contract rates, but spot rates will remain historically very elevated throughout the summer as demand simply outstrips capacity.

SONAR: TSTOPVRPM.USA (Blue); VCRPM1.USA (Green)

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

Weekly jobless claims were released Thursday and give us one of the best close-to-real-time indicators of the overall economy. This week, the data was again very promising as the labor market continues on a bumpy but trajectorially stable recovery path.

First-time filings totaled 411,000 for the week ended June 19, a slight decrease from the previous total of 418,000 but worse than the 380,000 Dow Jones estimate, the Labor Department reported Thursday. Initial claims have held above 400,000 for consecutive weeks after falling to a pandemic low of 374,000 three weeks ago. As things stand, the current level of initial claims is about double where it was prior to the Covid-19 pandemic.

The good news on the jobs front is that continuing claims are on the decline, falling to 3.39 million, a drop of 144,000. That number runs a week behind the headline claims total.

Initial jobless claims (weekly in May 2020-May 2021)

At the time of writing, the newest weekly data for the week ending May 29 had not been updated in SONAR. This week, claims fell from 405,000 to 385,000.

SONAR: IJC.USA

Consumer. Turning to consumer spending, as measured by Bank of America weekly card (both debit and credit) spending data, total card spending (TCS) in the latest week accelerated to 22% over 2019. This is the first time in June that TCS has topped 20% over 2019, but spending has been running up 16-19% consistently on a two-year comp for months. For contect, the average pre-pandemic two-year growth rate was about 8% (from 2012 to 2019).

The Bank of America team highlighted service spending in the nation’s two largest state economies, California and New York, which are now fully reopened. Spending at restaurants is now well above 2019 in both states, and the team believes there is more capacity for spending to accelerate in the states that were slower to reopen given pent-up demand.

There was also a notable acceleration in spending on clothing this week, according to Bank of America. It could be a reversal from some softening in the early weeks of June, or an indication of people refreshing wardrobes ahead of a return to work, more travel and vacations. One tepid statement for freight markets from this week;s report: Leisure spending is on the rise and durable goods spending is flatlining.

FreightWaves’ Flatbed Outbound Tender Reject Index, both a measure of relative demand and capacity, moves directionally with the ISM PMI.

SONAR: ISM.PMI (Blue); FOTRI.USA (Green)

Manufacturing. Over the past two weeks, regional manufacturing surveys have reported generally positive readings amid logistical challenges. The New York Fed’s Empire State business conditions index declined 6.9 points to 17.4 in June, retreating from strong readings the past two months. The Empire State Index is a diffusion index with a baseline of zero; any reading above zero indicates improving or expansionary conditions.

Delivery times lengthened to a new record during the month, new orders and shipments fell, and inventories entered negative territory. The supply chain and transportation challenges are as visible upstream as downstream, but overall the manufacturing sector is handling. Growth continued throughout the second quarter in both the Empire State and Philly Fed indices.

The Philadelphia Federal Reserve’s business activity index edged lower to a still robust 30.7 in June from 31.5 in the prior month. Unlike NY, the pace of shipments growth accelerated in the Philly region during June. The employment subcomponent rose to a very healthy 30.7 from 19.3 last month, the regional bank said.

Record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the manufacturing economy, but demand remains strong.

For more information on the FreightWaves Freight Intel Group, please contact Kevin Hill at khill@www.freightwaves.com or Andrew Cox at acox@www.freightwaves.com.

Check out the newest episodes of our podcast, Great Quarter, Guys, here.

Project44 acquires ClearMetal to strengthen predictive tools

Project44, a leader in real-time visibility of the global supply chain, announced on Thursday it has acquired ClearMetal, a San Francisco-based supply chain planning software company that focuses on international freight visibility, predictive planning and overall customer experience. The terms of the acquisition were not disclosed.

ClearMetal, founded by top software engineers and data scientists from Stanford, Google and other Silicon Valley elites, has created a “continuous delivery experience” that leverages proprietary machine learning algorithms that can forecast supply chain disruptions.

In an interview, Jason Duboe, chief growth officer at project44, explained that bringing in ClearMetal’s elite team is essential for the company’s future predictive solutions.

“Their team construct is fundamentally different. When you look at their data science, machine learning and computer science background, they are best in class,” he said. “Applying the team to solve really interesting challenges, starting with highly predictive ETA and deeper exception management to create more predictive analytics is really a key component here.”

Project44 recently acquired Ocean Insights to gain global supply chain vessel visibility and has announced it has expanded its truckload tracking services within Asia. Bringing on this new team of engineers will allow the company to capitalize on strong predictive tools, strengthening the supply chain of its customers.

“We’re going to be expanding deeper into Asia, and from a port perspective, getting data much earlier than competitors,” explained Duboe. “Our freight forwarder integrations will give us much deeper visibility from an end-to-end perspective in these regions.”

Along with the acquired skills the ClearMetal team will bring to project44, it brings a large book of customers, including large CPGs, retailers, manufacturers, distributors and chemical companies. These advanced use cases will strengthen the predictive planning tools, and project44 continues to expand into different customer markets.

“What we gain from ClearMetal is a holistic platform for anybody that joins the platform in the future,” said Duboe. “They have large customers with incredibly demanding and advanced use cases. So when it comes to order and inventory, functionality, supplier onboarding, and moving upstream into those processes, we can capture exceptions earlier on.”

Click here for more articles by Grace Sharkey.

Project44 expands real-time visibility into China

Project44 reels in Ocean Insights in ‘largest acquisition in visibility space’

‘Project44’s vision has always been global’

Donald Broughton, long-time analyst of freight markets, dies suddenly

Donald Broughton, the bowtie-wearing analyst of freight markets who spoke before conference audiences and television viewers likely hundreds of times, has died.

Broughton’s research firm, Broughton Capital, had not issued a statement regarding Broughton’s death as of publication time. The company’s website does not contain an announcement of his passing.

Facebook contained numerous tributes to Broughton on his passing including one from his brother Tim, a screenshot of which was sent to FreightWaves.

Tim Broughton said Donald died suddenly at home on May 30.

Facebook also features expressions of sympathy from college friends and fellow graduates of his Missouri high school. Those tributes from Cape Central High School in Cape Girardeau, Missouri said Broughton had graduated from there in 1982.

Broughton was not known to have been ill. He spoke to the annual meeting of the Transportation Intermediaries Association (TIA) in mid-April (this reporter was there and spoke briefly to him), and did one of his many CNBC appearances on May 12 where he gave a bullish outlook on the freight market.

It appears from this link that Broughton was to deliver a freight market update to members of the TIA Tuesday.

Broughton Capital, a research firm on trucking, freight and the supply chain, was founded in 2017. Broughton’s title was managing partner.

Prior to starting that firm, Broughton worked on the research operations of several companies, including A.G. Edwards

Broughton’s trademark in his many appearances was his bow tie. As his brother said in his post: “He did like his bowties.”

Sought for his expertise

John Larkin, a long-time freight industry analyst now with Clarendon Partners who knew Broughton well, liked to think of him, Broughton and Thom Albrecht, now the chief revenue officer of Reliance Partners, as three analysts who were “sought by institutional investors to be seasoned, knowledgeable, been around for decades, the kind of guys who were much more valuable than talking to the young kid on Wall Street who had been doing it for two years.”

“He was a warm person to be around,” Larkin said of Broughton. “He always had a kind word for me and anybody else in the industry. He loved being thought of as a sage.”

Larkin said any time he heard Broughton speak, “I always got a lot out of it. He was pretty thoughtful and forced you to think of the world in a different way.”

“He tried to use his intimate knowledge of freight transportation data to draw conclusions about the broader economy, and did about as good a job of that as anybody has ever done,” Larkin said.

Three amigos

Albrecht also said he saw a kinship among he, Larkin and Broughton. “We were the three amigos,” Albrecht said.

Albrecht hired Broughton into A.G. Edwards, based in St. Louis in Broughton’s home state. Broughton, according to Albrecht, was working for a beverage analyst who passed away.

“So Don was without a job, my junior analyst was going back to graduate school so I needed somebody pretty quickly,” Albrecht said. “With his background in distribution and transportation, and just his overall zeal, I ended up hiring him within a day or two.”

Broughton had “a passion for the industry,” Albrecht said. “He loved a good debate. He was very diligent with his numbers. Sometimes he would pull people the wrong way but he meant well all the time.”

More articles by John Kingston

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Amazon scores big win at NLRB over whether it’s a joint em p loyer with DSPs

Samsara wins trade secret dispute with former employee

a white sleeper cab pulling a blue ocean container

Fleet telematics and technology company Samsara has settled a trade secret dispute with a former employee who left to join competitor Motive. Under the terms of the deal, the former employee will pay an undisclosed sum and accept permanent restrictions after breaching the employment agreement.

A Thursday filing with the U.S. District Court for the Northern District of California showed a stipulated permanent injunction requiring former Samsara employee, William Reich, to adhere to terms outlined in his “Employee Invention Assignment and Confidentiality Agreement,” which was signed when he began working for the San Francisco-based company in 2022.

Reich, a former senior manager in enterprise field sales with Samsara (NYSE: IOT), is required to “maintain the confidentiality of all Samsara Proprietary Information,” and “never disclose such Proprietary Information to any third party, including any future employer or his former employer Motive and/or any of Motive’s employees, for any reason whatsoever.”

A separate statement from Samsara said Reich has also agreed to “pay a substantial sum for breaching his employment agreement.” Reich has also resigned from Motive.

“Samsara remains committed to vigorously protecting its intellectual property rights and enforcing its rights against the misappropriation of its confidential information and trade secrets, including against Motive,” said Adam Eltouky, chief legal officer at Samsara, in a news release. “We will always take decisive action to safeguard the innovations that power our platform and serve our customers.”

Samsara alleged in a 2024 complaint that Reich downloaded “a large volume of Samsara trade secrets and confidential information to a currently unknown location in the days before resigning” to go work for Motive. The items downloaded were said to include product offerings in development along with sensitive customer data.

The complaint said the actions amounted to “theft of Samsara’s trade secrets and breaches of his ongoing contractual obligations.”

“In short, they would provide a former employee like Reich an unfair advantage in competing with Samsara in his new role and would provide a competitor with a blueprint of how to unfairly compete against Samsara,” the complaint read.

This is just one recent development in the extensive legal disputes involving the two fleet technology companies. Motive was recently cleared in a patent infringement lawsuit brought by Samsara, although Samsara secured a $30.3 million judgment against the company earlier this year following claims of false advertising.

Samsara filed a separate patent infringement lawsuit against Motive on Monday.

More FreightWaves articles by Todd Maiden:

AI-powered broker Fura announces latest acquisition

a pair of white sleeper cabs pulling trailers on a highway

Freight broker Fura announced Monday that it has acquired LG Logistics Solutions. This marked the sixth acquisition for the Cincinnati-based AI-powered 3PL.

Financial terms of the transaction were not disclosed.

“Freight brokerage is one of the largest and most fragmented service industries in the country — thousands of small brokers running on manual processes and heavy overhead,” stated a news release from Fura. “Fura’s view is that AI fundamentally changes the math of consolidation: rather than simply stacking acquired businesses on top of each other and inheriting their costs, Fura migrates each acquired brokerage onto a shared automation platform that runs the repetitive work, so every business it acquires gets leaner and more capable than it was standalone.”

LG Logistics Solutions specializes in full-truckload, less-than-truckload and intermodal shipping. The company will gain access to Fura’s platform and AI agents, allowing it to grow its book of business without adding incremental costs. It will also have access to Surround, Fura’s real-time visibility technology.

“Roll-ups in services usually fail because you’re just buying other people’s overhead,” said Jeff Dangelo, Fura co-founder and CEO. “AI changes that equation completely. When we acquire a brokerage, we don’t layer on more cost — we put it on a platform where automation does the repetitive work, so the business runs leaner and serves customers better than it did on its own.”

Fura acquired Barton Logistics for an undisclosed sum in March.

Luis Guardiola, founder of LG Logistics Solutions, and his staff will continue to run the day-to-day operations.

“I looked at where freight is heading, and the brokers trying to do it all by hand are going to be left behind,” Guardiola said. “If you own a brokerage and you’re wondering what the next chapter looks like, this is the most confident I’ve felt about a decision in a long time.”

More FreightWaves articles by Todd Maiden:

FreightWaves Today: Mergers, fraud rings and the mid-June rate pause

Rail: Bipartisan push for rigorous UP-SP merger review

The bipartisan House Appropriations Committee added language to its fiscal 2027 transportation appropriations bill urging the Surface Transportation Board (STB) to apply strict scrutiny to the proposed $72 billion Union Pacific-Southern Pacific merger.

If evaluated under the STB’s rigorous 2001 rules, the merger –which would create the first all-freight transcontinental railroad– must prove it enhances shipper options rather than just preserving current competition.

While the STB conditionally accepted the application in late May, it has requested additional information from Union Pacific by July 27 before starting its formal review.

Event Logistics: Rock-It Cargo coordinates the ‘most complex’ World Cup

Daniel Rosenthal, CEO of Rock-It Companies, detailed the monumental challenge of managing logistics for the 2026 FIFA World Cup –an event he describes as the most complex in the sport’s history.

With the tournament expanding to 48 teams playing 104 matches across 16 venues in three countries, Rock-It is leveraging proprietary master delivery scheduling technology and its asset-light network to process roughly 1,500 highly time-sensitive shipments a day.

Drawing on its legacy of moving touring gear for three-quarters of the global music industry, the company is managing everything from teams’ bespoke training gear crossing international borders to the specialized broadcast infrastructure supporting 150 international networks.

Cargo security: Eight indicted in $4.49M carrier impersonation ring

In a major victory for cargo security, federal prosecutors in Manhattan indicted eight individuals accused of running a massive carrier impersonation scheme.

Operating across New Jersey, Pennsylvania, and Virginia, the group allegedly stole $4.49 million in freight –including copper, beef and cigarettes– by using legitimate motor carriers’ MC and DOT numbers to trick warehouses.

Once loaded, the stolen cargo was allegedly moved to New York City, transferred to secondary vehicles and sold off.

Air logistics: FedEx partnering with China Southern to expand Asia-Pacific footprint

FedEx Corporate has signed a strategic memorandum of understanding with the air cargo division of China Southern Airlines to optimize their collective networks in Asia.

The collaboration will target capacity sharing, ground operations, hub connections and digitalization to improve network efficiency. This alliance aligns with FedEx’s major expansion of its Guangzhou hub, a project slated for completion next year that will double the facility’s terminal footprint and triple hourly sorting capacity.

Regulation: FMCSA Registration Glitch Halts New Carrier Entrants

The Federal Motor Carrier Safety Administration’s (FMCSA) new “Modus” carrier registry has hit a major roadblock, completely failing to register a single carrier in the three weeks since its launch.

Designed to curb chameleon carriers and rampant registration fraud, the system’s extended outage has drawn intense complaints across social media.

However, analysts speculate this complete freeze on new entrants might actually act as a “feature, not a bug” for the health of the broader freight market by blocking new capacity and preventing fraudulent credential transfers.

Spot Rates: The mid-June rate dip is a seasonal pause, not a systemic drop

Despite reports of capacity loosening over the weekend, history suggests that the current dip is nothing more than a seasonal pause typical of the second week of June.

Rates are expected to tighten significantly as end-of-month and end-of-quarter shipping volumes collide with the pre-July 4th holiday rush. With tender rejections currently sitting just below 18%, analysts are confident that the metric will breach the 20% threshold before the year is out.

Keep up with the latest news on FreightWaves Today

FreightWaves Today livestreams weekdays at noon ET at http://tv.freightwaves.com/.

LTL general rate increases no longer an annual event

a green ABF tractor pulling two ABF pup trailers

ArcBest announced Monday a 5.9% increase to general rates and charges for less-than-truckload services in both of its business units. The increase takes effect on June 22. This year’s general rate increase is a little ahead of the 11-month cadence the company has followed over the past few years.

ArcBest’s (NASDAQ: ARCB) LTL unit, ABF Freight, last implemented a GRI on Aug. 4. That increase was also expected to average 5.9% across general tariff codes and lanes. The company’s GRIs have been moving up approximately one month on the calendar over the past four years. This year’s update is approximately six weeks ahead of the one-year anniversary date.

Most public LTL carriers implemented GRIs about one month early last year.

A sign the LTL market has turned?

Last week, ArcBest raised its second-quarter guidance for both its asset-based and asset-light units.

The asset-based unit, which includes ABF Freight, is now forecast to see 600 to 700 basis points of sequential margin improvement. (The unit normally sees just 350 bps of margin improvement from the first to the second quarter.)

The company touted pricing initiatives and cost takeouts as drivers of the improved outlook. Its tonnage growth also accelerated in May on a two-year-stacked comparison, as it is seeing more truckload-rated shipments in the network.

On its first-quarter call in April, it flagged the expectation for double-digit TL rate increases during the second and third quarters. It also said that contractual LTL rates were 6.3% higher in the first quarter.

(Less-than-truckload fuel surcharge mechanisms include a step function as diesel prices rise, typically resulting in margin accretion.)

Industrial activity improved for a fifth consecutive month in May, according to manufacturing data released from the Institute for Supply Management. The ISM’s Manufacturing PMI registered a 54 reading for the month, which was 130 bps higher than April, and the highest reading in four years. (A reading above 50 signals expansion, while one below 50 indicates contraction.) The subindex for new orders—an indicator of future activity—registered a 56.8 reading, which was 270 bps higher sequentially.

Inflections in ISM data usually lead LTL volumes by a few months.

ArcBest also increased its operating income outlook for the asset-light unit, which includes brokerage and managed transportation services, last week. It now expects adjusted operating income of $3 million to $5 million in the second quarter, which is $2 million higher than the prior forecast.

Shares of ARCB were 7.2% higher on Monday compared to the S&P 500, which was 0.3% higher on the day.

More FreightWaves articles by Todd Maiden:

Containers say ‘hold my disruptions’ as ocean rates surge

Global container volumes maintained a strong pace in April, turning in strong year-on-year gains in the first full month since Iran closed the Strait of Hormuz.

Despite serious disruptions from the Iran war, where hostilities now stretch from the Persian Gulf to the Mediterranean, global container traffic remained ‘remarkably resilient’ at 16.2 million twenty foot equivalent units in April, according to Container Trade Statistics.

That’s up 4% from April 2025, and a narrow 1.6% improvement from March.

CTS, which gets its data directly from many of the largest shipping lines, said year-to-date volumes remain 5% above 2025 levels.

“This reinforces a long-standing maxim of global trade: Cargo behaves much like water, finding alternative routes when traditional pathways become restricted,” the British-based analyst said.

The CTS Global Price Index rose sharply to 89 points in April, up more than 12% from 79 in March, pressured by the Hormuz crisis. That’s the biggest gain since June 2024, at the height of carriers diverting vessels away from the Red Sea, substantially removing market capacity.

All regions saw growing imports except North America and, unsurprisingly, the Indian Sub-continent and Middle East, which declined by 2% and 4%, respectively.

A decline in North America came on reduced volumes originating from Europe, the Indian Sub-continent and Middle East, and South and Central America.

Rates on the benchmark trans-Pacific have been surging over the past month. Carriers have been managing capacity with blankings while issuing a storm of surcharges and rate restoration fees. Market observers say some importers have begun bringing in goods ahead of schedule – or frontloading – as uncertainty swirls and the peak season gets underway.

Exports compare similarly with the import market. India/Mideast and North America were the only regions to see volume drops, of 15% and 3%. Year-to-date, Europe exports are off 2%, an improvement from March’s 3% slide. While European exports have shown gradual improvement throughout early 2026, those results have been undermined by a substantial reduction in cargo moving into the India/Mideast region.

Still, ‘while volumes have softened slightly in affected regions, overall trade remains robust,” CTS said. Sub-Saharan Africa continues to emerge as one of the strongest performing regions globally. Year-to-date, exports are up 10% and imports are up 15%, where alternative trade routes and emerging markets are increasingly supporting global growth.

A key unknown is when and if higher transport costs begin to exert meaningful pressure on global volumes.

Read more articles by Stuart Chirls here.

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Box rates soar $1,000 in one week on peak

Swearing-in of commissioner returns U.S. maritime regulator to full strength

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Customs fraud cases surge as whistleblowers target tariff evasion

The U.S. Department of Justice is increasingly turning to the False Claims Act to pursue companies accused of evading customs duties, a trend legal experts say is likely to accelerate as tariffs remain elevated and whistleblowers become more active.

Alexander M. Owens, a partner at Pietragallo Gordon Alfano Bosick & Raspanti LLP in Philadelphia who represents whistleblowers and businesses in False Claims Act cases, said customs fraud enforcement has evolved from a niche area of government oversight into a rapidly growing enforcement priority.

“We think this is really an area that’s getting pretty hot in terms of the False Claims Act world,” Owens told FreightWaves. “The government learns how to investigate these cases better, the word gets out for participants in the industry, and there becomes this pipeline of cases for decades.”

The trend comes as federal authorities pursue a growing number of customs fraud and tariff evasion cases. Recent actions include the government’s $549.5 million settlement involving aluminum extrusion imports, a customs fraud claim against bankrupt auto-parts supplier First Brands Group, and enforcement actions targeting alleged country-of-origin fraud and duty evasion schemes.

According to research compiled by Owens, customs fraud recoveries under the False Claims Act totaled more than $570 million during the first five months of 2026, surpassing all prior annual totals and exceeding the combined recoveries from many previous years.

The report states that more than $918 million has been recovered through customs fraud cases brought under the False Claims Act.

Common customs fraud schemes

Owens said most customs fraud cases fall into three primary categories: misclassification of goods, misrepresentation of country of origin, and undervaluation of imports.

Misclassification schemes involve importers assigning products to tariff codes with lower duty rates. Undervaluation cases often involve false invoices or other efforts to understate the value of imported goods. Country-of-origin fraud can include transshipping products through third countries to disguise where they were manufactured.

“Part of the prosecutorial appeal of customs fraud cases is that these matters tend to involve a handful of common typologies,” Owens wrote in an analysis of recent enforcement trends.

Owens said fraud schemes are becoming more sophisticated as enforcement intensifies.

“What we’re seeing now is more elaborate efforts to create the appearance of legitimate transactions,” Owens said.

Recent cases

Company/Case	Alleged Scheme	Status

Perfectus Aluminum

Misclassification of aluminum extrusions

$549.5M settlement

First Brands Group

Customs duty evasion allegations

Government claim in bankruptcy

Farjess Inc./Royal Canadian Steel

Tariff evasion and customs fraud allegations

Pending litigation

Mauro Esteban Garza Torres

Fraudulent customs paperwork

Guilty plea

EAPA Case 818

Country-of-origin evasion findings

CBP determination

China-linked imports remain a major focus

Industries subject to high antidumping, countervailing and Section 301 duties continue to generate significant enforcement activity, Owens said.

Aluminum, steel, furniture, textiles and apparel are among the sectors most frequently associated with customs fraud investigations because high duty rates create strong incentives for evasion.

China remains at the center of many enforcement actions. Owens’ research found that 37 of 46 reported False Claims Act customs fraud recoveries involved imports from China.

“The higher the tariffs, the greater the risk of fraud as importers grow more incentivized to evade higher levies,” according to Owens.

Whistleblowers play growing role

A key driver behind the increase in cases is the False Claims Act’s whistleblower provision, which allows private individuals to file lawsuits on behalf of the federal government and receive a share of any recovery.

Unlike many other fraud investigations, customs cases are increasingly being initiated not only by current and former employees but also by competitors, customs brokers and others working throughout the supply chain, Owens said.

Recent whistleblower awards have drawn attention across the industry. According to Owens’ analysis, the whistleblower in the aluminum extrusion settlement is expected to receive approximately $96 million, while another customs fraud whistleblower received more than $9.7 million in a tungsten carbide case.

“Large awards are the best form of advertisement for whistleblower laws,” Owens wrote. “Expect more customs fraud cases to show up in the FCA pipeline soon enough.”

More enforcement ahead

Owens said he expects customs fraud investigations to continue growing over the next several years, regardless of how tariff policies evolve.

He pointed to improving enforcement capabilities at Customs and Border Protection, growing awareness of whistleblower rewards and continued pressure to prevent tariff evasion.

The DOJ is also expected to scrutinize emerging risks, including alleged abuse of Delivered Duty Paid (DDP) transactions and potential fraud involving tariff refund programs. Owens warned that large-scale refund efforts can create opportunities for bad actors, much like pandemic-era fraud involving the Paycheck Protection Program.

“I think we’re going to see more fraud, but I also think we’re going to see more of these actions,” Owens said. “CBP’s own surveillance apparatus is getting much better, and I think we’re going to see more whistleblower cases as well.”

C.H. Robinson’s next AI step: adding Engineer to the Planner

Last year, C.H. Robinson, whose embrace of AI helped to drive its stock up by almost by a factor of three in a little more than two years, is rolling out its next initiative with a public launch.

Many of the AI enhancements that the country’s biggest brokerage has implemented in its operations are done without fanfare. But that changed a year ago when the company announced its Lean AI Planner.

At the time, Jordan Kaas, president of C.H. Robinson’s Managed Solutions group, said the Planner was a “digital teammate” that as an agentic AI solution worked behind the scenes “to manage and execute the end-to-end logistics process to facilitate better supply chain orientation.”

The next phase is being rolled out this month: the Lean AI Engineer whose value proposition is that it continually assesses and audits a supply chain to find the areas where possible problems lurk, where it is operating at less than full efficiency and where fixes can be designed and implemented.

Cracking 90% for Planner

Kass, in an interview with FreightWaves to discuss the next iteration of AI in Managed Solutions, said the Planner has grown to the point where 92% of Managed Solutions’ shipments for its 4PL customers are being driven autonomously by the Planner.

“But when you think about a shipping department, it’s not just planning and execution,” Kass said. “It’s also continuous process improvement.” But he added that those improvements tended to be “episodic and periodic.”

Getting noticed in a constant barrage of freight tech announcements of the newest and the best can be challenging. C.H. Robinson (NASDAQ: CHRW), by dint of its size and its success in implementing AI, the proof of which is its rising profitability against a backdrop of a shrinking workforce, inevitably gets more publicity than others.

Open 24 hours a day

Kass said “the groundbreaking story here, and the innovation and the transformation, is that this runs continuously.”

As Kass put it, most auditing of supply chains are a “look back” to see what worked and what failed. But the Lean AI Engineer, he said, does hold “historical data and current data at the same time, as well as the entirety of a network. That’s just something a human being can’t do.” And with all that data, it can review what worked in the past and look forward to fixes and improvements in the future.

What Kass called the “servings” coming out of the Engineer are “served up in a continuous way and a proactive way.”

“You hear a lot of people waiting on a signal,” Kass said. “This isn’t waiting. This is saying I’m going to look into the future and be programmed.”

C.H. Robinson’s North American Surface Transportation (NAST) group, which houses the company’s traditional freight brokerage operations, gets most of the focus on the company.

While the Engineer and Planner tools are being rolled out in Managed Transportation, which Kass described as “a logistics department in a box,” the technologies will make their way into other parts of the business like NAST, Kass added.

And it wouldn’t be just a technology dump into another part of the business. Kass said the AI Engineer will be “continuously studying a logistics network,” and can be powered by data from other parts of C.H. Robinson that service a customer. “It can analyze their entire network and serve up solutions, but no differently than if a customer is a core carrier or shipper or we’re doing contractual business for them.”

All of them, he said, would be receiving from the Engineer “predicted proactive information” about their supply chain.

What comes out of that process, Kass said, is “incredibly sticky and really drives value for our customers.”

In the prepared statement released by C.H. Robinson in conjunction with the release of Engineer, Kass described it as a “closed-loop AI system.”

“It will run continuously, improve the operation it’s running and heal itself when something breaks — without an alert or a human noticing a problem first,” Kass said. “The Lean AI Planner executes in real time while the Lean AI Engineer studies the results, identifies patterns, adapts logic and influences future decisions.”

Limitations for personnel

In that same statement, after praising the “talented people to manage complexity,” Kass said talent doesn’t “scale.”

But with the Engineer, Kass said, “shippers will get infinite talent and expertise, consistently applied across every shipment, regardless of who’s available in what time zone or how much their shipping volume grows or spikes.“

Kass described an example of how the system might work.

He spoke of an LTL customer for the Managed Solutions group, “and maybe we’re managing their LTL in addition to their truckload, and they had three LTL shipments Monday, Wednesday and Friday to the same destination.”

The Engineer, according to Kass, can see that and in essence say to the customer, “Hey, hang on a second. You ship three LTLs to the same destination in a week. Why don’t we ship this as a single truckload one day a week.”

Or the Engineer might look at a long haul truckload route and determine that intermodal is a better option, Kass said. He added that “these are real world examples of what we see happening on the 4PL side.

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Robots drive $10B Amazon investment for European fulfillment centers

Green-and-black robotic saucers are moving carts of packages in Amazon fulfillment centers.

Amazon plans to deploy three types of new robots as part of a plan to invest more than $10 billion to expand and modernize fulfillment centers in Europe and grow its workforce by 25,000 by the end of the decade.

Amazon (NASDAQ: AMZN) relies on robots to make the work environment safer and easier for employees, while improving package processing speed. Amazon Robotics was founded in 2012 when Amazon acquired Massachusetts-based Kiva Systems. The original Kiva robots moved stacks of shelves within a warehouse. Now robots conduct a variety of tasks. Some zip around like motorized saucers, while others have mechanical arms for lifting.

Amazon recently surpassed 1 million robots developed, produced and deployed across its operations network.

At an event in London Thursday, the retail logistics behemoth introduced the next-generation Proteus autonomous robot. It is designed to do physically demanding tasks such as moving heavy carts with packages over long distances to the outbound loading dock so employees can reduce their risk of injury and focus on managing inventory flow, quality control and other high-skill work.

Proteus, introduced in Nashville, Tennessee, in 2022, is Amazon’s first fully autonomous mobile robot, meaning it can navigate freely throughout a warehouse using sensors to detect and avoid objects in front of it. The original version of the self-guided transporter works in conjunction with Cardinal, a robotic arm that tightly loads packages up to 50 pounds into carts in a Tetris-like manner. Cardinal uses advanced AI and computer vision to quickly select one package from a pile of packages delivered via a chute, lift it with air suction, read the label and precisely place it in the appropriate cart assigned to a specific truck.

One of the major changes, made possible by advances in artificial intelligence, involves how employees interact with the robot. Proteus, about the size of a 50-inch flat-screen TV, is capable of understanding instructions in plain, conversational language with no technical commands and no programming interface. That means warehouse workers can assign tasks to the robot the way they would communicate with a colleague.

The next-generation Proteus is also designed to travel much further than the original. Rather than operating only in dock areas, the new system can work anywhere items need to be moved. Amazon said this includes transporting containers as they arrive at a site, transferring them between workstations, and assisting employees across Amazon’s fulfillment centers and delivery sites.

“You tell it what needs to be done. It figures out the priority, the route, the timing,” said Scott Dresser, vice president of Amazon Robotics, in an article on the company’s website. “It becomes your assistant for material movement.”

Proteus 2.0 is currently being tested in Amazon labs, with deployment in Europe expected in the first half of 2027.

Broader robotics roadmap

The scaling of these systems reached a new peak with the 2024 launch of Amazon’s next-generation fulfillment center in Shreveport, Louisiana. The site uses eight different robotics systems that work in harmony to support package fulfillment and delivery, according to another blog post.

Alongside advancements in mobile robots, Amazon is also developing new collaborative technology and robotic manipulation — the ability to handle individual objects with precision.

This includes STARK, a new collaborative robotic tote-handling system. The brainchild of an operations employee, STARK picks full totes from conveyors and places them on carts — work that otherwise requires repetitive heavy lifting. First piloted in Barcelona, Spain, STARK is planned to expand to 15 sites across Europe by 2027, Amazon said.

*STARK is Amazon’s collaborative robotic tote-handling system, designed to handle individual objects with precision. (Image: Amazon)*

Amazon said it will also expand the use of Vulcan, the company’s first robot with a sense of touch. Vulcan uses sensors to pick and stow at the top-and-bottom rows of inventory pods at fulfillment centers. The grab tooling can see and feel objects simultaneously to navigate densely packed environments and understand how much force to apply. Originally developed for a facility in Spokane, Washington, Vulcan expanded last year to handle more complex picking tasks at Amazon’s Hamburg facility in Germany and will be installed at more sites.

“Europe is at the center of how we’re building our operations for the future,” Dresser said.

Legacy robots

Amazon actually has two Vulcan robots. The pick version can grab items up to five pounds and 14 inches in length. Each robot reaches nine feet tall. In total, a system uses 10 robot arms in a 350-square foot area.

The stow version can grab items up to eight pounds, but nothing that can roll. This system links three robot stations together in a 500-square foot area and weighs nearly 10,000 pounds. Vulcan Stow uses an arm that carries a camera and a suction cup. The camera looks at the compartment and picks out the item to be grabbed, along with the best spot to hold it by. While the suction cup grabs it, the camera watches to make sure it took the right item. It also has the smarts to identify when it can’t move a specific item, and can ask a human partner to assist.

Sequoia, launched in Houston in 2023, is a robotic system that uses AI and computer vision systems to consolidate inventory and free up storage at the site to facilitate faster order transactions.

*Amazon’s Vulcan robot is the company’s first robotic system with a sense of touch. (Photo: Amazon)*

Amazon says Sequoia enables it to identify and store inventory up to 75% faster at fulfillment centers. It works by having mobile robots transport inventory directly to a containerized storage system or to an employee picking out items for a customer order. Inventory is transported directly to employees at a workstation ergonomically situated for their power zone (between mid-thigh and mid-chest height), mitigating the need for employees to reach above their heads or squat down, which can lead to common workplace injuries.

Sequoia takes up four 500,000-square foot floors per building, equivalent to about 35 football fields. The Shreveport facility is five stories tall.

While Proteus is fully self-guided, other mobile robots such as Titan and Hercules, are confined to areas where only authorized robotic specialists can enter, and read barcodes that are stickered to the floor as navigation coordinates.

Hercules is a drive unit that finds and transports pods of items from areas of the fulfillment center to employees picking items for customer orders before they are packaged. It can lift up to 1,250 pounds and travel across 1 million square feet. Hercules makes key decisions about how it moves independently, but takes overall direction from centralized planning software. It then uses a forward-facing 3D camera to differentiate between people, pods, other robots, and other objects in its path to make safer decisions, the Amazon article said.

Similar to Hercules, Titan is another drive unit that uses encoded markers on the floor to bring items from across Amazon’s fulfillment centers directly to employees as they assemble customer orders. It can lift twice as much as Hercules, meaning it focuses on larger and/or bulkier items like small household appliances or pallets of food.

Sparrow is another robotic system that supports employees who aggregate items for customer orders. This robotic arm picks up and moves individual items from containers into specific totes to send off to employees before they’re packaged. It can lift packages up to 12 pounds. Sparrow uses computer vision and AI to identify the correct item and add it to the tote on its delivery journey.

Once all the items for a customer order are selected, Amazon uses a variety of automated packaging systems to pack orders in the smallest conveyance possible to reduce waste. One machine, for example, originally created plastic bags, but was retrofitted to create made-to-fit paper bags using curbside recycled materials. It uses sensors to measure an order’s dimensions and then creates a correctly sized, protective bag using a more durable, weather-resistant paper and heat-sealing technology. Amazon has retrofitted more than 120 of these machines across the U.S. in more than 20 fulfillment centers, helping to avoid more than 130 million plastic bags this year, according to Amazon.

Robin was the first robotic arm ever deployed by Amazon Robotics. It is made to sort packages before they’re brought to the outbound dock to be placed on a truck. Robin grabs packages from conveyor belts and puts them onto robotic drive units to be moved to the next part of the facility. It also transfers damaged packages to ensure optimal quality control.

Amazon insists the robotics expansion isn’t costing jobs. Since introducing robotics into its operations years ago, Amazon says it has continued to hire hundreds of thousands of employees globally and created new job categories, including reliability, maintenance and engineering roles. But most job hires are seasonal workers. The Wall Street Journal last year reported that Amazon has fewer employees per facility than at any time in the past 16 years and that experts believe Amazon wants facilities that can mostly run on their own with only a handful of managers. And CEO Andy Jassey has said the company will need fewer employees over time because of AI.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Kloster sworn in as STB member

Kloster was appointed by President Donald Trump in September and confirmed by the Senate on May 18, 2026, for a term ending December 31, 2028.

A graduate of Northern Illinois University, Kloster for the past 17 years has been president and founder of Integrity Rail Partners, Inc., a consultant specializing in rail equipment as well as strategic planning, acquisitions, and marketing.

Kloster brings to three the number of Republican board members, including Chairman Patrick Fuchs and Michelle Schultz, both Trump appointees and the statutory maximum for the party. Vice Chair Schultz’s term runs through November 30, 2030. Longtime member and Vice Chair Karen Hedlund was appointed by President Joe Biden in 2021 and is awaiting confirmation after being nominated by Trump for a second term this past May that runs through December 31, 2030. A fifth seat remains vacant.

The newest appointee joins the board as it evaluates the proposed merger of Union Pacific (NYSE: UNP) and Norfolk Southern (NYSE: NSC) in a deal that would create the first all-freight transcontinental railroad.

Kloster’s resume includes working as director of business and market intelligence for railcar lessor GE Rail Services from 1991-2007, and in a senior role at consultant FTR from 2007-2019. He has served as an executive board member of the National Industrial Transportation League for two decades, and on the board of the Railway Supply Institute since 2020. He also holds several patents covering railcar technology.

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