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

truck fallen over

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:

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.

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

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

Related Articles:

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’

LTL’s paper gains

Chart of the Week:  LTL Monthly Cost per Hundred Weight, Van Contract Rate per Mile – USA SONAR: LTL.USA, VCRPM1.USA

The headline numbers look impressive. LTL all-in revenue per hundredweight is up sharply on SONAR’s LTL.USA index, with the current reading at $46.13, well above the six-month average of $41.31 and at its highest level in the five-year window shown in the chart above. LTL carriers, by one reading, are having their best pricing moment since the post-COVID freight boom.


The orange line complicates that story, but not in the way it might first appear. Van contract rates per mile, VCRPM1.USA, bottomed out near $2.25 per mile in mid-2025 after a multi-year freight recession that shed more than 20% from the 2022 peak. What has happened since is the part that matters: over the past eight months, VCRPM1 has staged one of its sharpest recoveries of the five-year period, climbing back to $2.51 per mile and still trending upward. That is not a number failing to confirm the LTL rally. That is a number setting up the next leg of it.


The fuel surcharge is the whole story for now


First, the honest accounting of where the LTL gains actually came from. When diesel averaged $3.50 per gallon in May 2025 — using a generalized fuel surcharge table that starts at 0.5% when the DOE’s weekly figure is at $1.20 and increases 0.5% for every $0.06 increment — fuel costs were estimated at roughly 19.5% of the base linehaul rate. By May 2026, diesel had surged to $5.60 per gallon, a 60% increase, pushing the surcharge to 37.0%. On a median LTL shipment, that swing alone added more than $5.80 per hundredweight to the invoice, more than accounting for the entire year-over-year all-in rate increase.


Strip the fuel surcharge out and the picture inverts. SONAR’s LCWT1.USA index, which tracks initial contract base rates on paid invoices with fuel excluded, shows base rates flat to slightly negative year-over-year. Carriers have actually been cutting rates across nearly every freight class — Class 50 (dense, efficient freight) by as much as 21% — to compete for volume in what has been, beneath the fuel noise, a buyer’s market at the base rate level.


This is the defining characteristic of the current LTL moment: the all-in rate is at a multi-year high, the underlying rate is not, and the gap between them is almost entirely diesel.


The Yellow exit set the floor


That divergence did not begin in a vacuum. The circled annotation on the chart marks the exit of Yellow Freight,  the Yellow liquidation in mid-2023 that removed roughly 10% of U.S. LTL capacity overnight. The event was widely expected to produce an immediate repricing of the market. It produced a floor instead. The remaining carriers — Old Dominion, Saia, XPO, ArcBest, Estes and others — absorbed the displaced volume with unusual discipline, holding GRI cadence steady and preventing the kind of base rate collapse that hit the truckload market during the same period.


Look at the white line on the chart in the months immediately following that annotation. LTL.USA held its level through late 2023 and into 2024 even as the freight recession continued — a notable divergence from the deep trough truckload rates were experiencing at the same time. The Yellow exit did not ignite an LTL pricing surge. What it did was ensure there was a base from which to launch one, once the broader freight cycle turned.


That turn is now visible on both lines of the chart simultaneously.


The truckload recovery is the signal


The VCRPM1 move of the past eight months is not a rounding error. Van contract rates fell from a peak above $2.90 per mile in mid-2022 all the way to roughly $2.24 per mile at the trough, a decline of more than 20% over nearly three years. The recovery off that floor has now retraced approximately half of that decline in less than a year. The slope of the orange line since October 2025 is the steepest sustained upward move in the five-year window outside of the 2021-22 boom.


This matters directly to LTL because every major LTL carrier is also a significant purchaser of truckload capacity. Full trailers or doubles running between breakbulk hubs and service centers are functionally indistinguishable from standard TL moves, and a meaningful share of that linehaul is outsourced to third-party carriers. When VCRPM1 rises, LTL purchased-transportation costs follow — typically with a lag of one to two quarters — and carriers eventually push those costs into base rates and GRI filings rather than absorb them.

The forward market is flashing the same message even louder. SONAR’s Outbound Tender Rejection Index (STRI.USA) sits at 16.9% — more than double its six-month average of 8.28% and at a multi-year high — signaling that TL capacity is being absorbed faster than the market can replenish it. The National Truckload Index (NTI) hit a 13-quarter high in Q1 2026. Spot rates lead contract rates by several months, and that gap is already wide. The conditions that historically precede another leg up in VCRPM1 are all present.
A sustained move in van contract rates toward $2.65 or $2.70 per mile — plausible given the current trajectory — would represent a meaningful increase in LTL linehaul costs that fuel surcharges alone cannot fully offset. That is the mechanism by which TL tightening becomes an LTL base rate story.


Carriers are already pricing the future


The market is not waiting for those thresholds to be formally breached. ArcBest implemented a 5.9% general rate increase effective June 22, 2026 — approximately six weeks ahead of its prior 11-month cadence — continuing a multi-year trend of compressing GRI calendars. Most major LTL carriers moved GRIs roughly one month early in 2025; by 2026, that lead time is stretching toward six weeks. The industry is pulling pricing actions forward, which is exactly what carriers do when they believe the underlying rate environment is about to shift in their favor.


Q1 2026 carrier earnings told a story of strategic divergence that is now starting to converge. Old Dominion shed nearly 8% of its daily shipments while growing revenue per hundredweight by 4.4% ex-fuel,  a deliberate yield-over-volume posture that is increasingly looking prescient. XPO balanced volume growth with yield improvement. ArcBest appeared to grow shipments at the cost of a 4% base rate decline, then reversed course with its June GRI and a Q2 guidance raise that cited pricing initiatives explicitly. When the carrier most aggressively chasing volume pivots to pricing in the same quarter that TL rejection rates double, it is worth paying attention.


It should be noted that in the same Q1 report, ArcBest cited a 6.3% increase to contract rates, which superficially contradicts the revenue-per-CWT decline. This is an inherent limitation of using revenue per CWT as a pricing benchmark, since a shift toward lower freight classes or shorter haul distances will reduce the figure even when contract rates are rising. The most likely reading is that ArcBest added new business at lower rates while simultaneously improving its existing contract book, a dynamic that aggregate metrics tend to obscure rather than illuminate. 


The two-act structure of this market


The five-year chart above is best understood as two separate stories overlaid on each other. The first story is fuel,  a transitory but massive surge in diesel prices that has inflated all-in LTL revenue per hundredweight to levels with no precedent in the prior four years of the chart. That story has a shelf life. Diesel has already eased from its May peak, and SONAR’s ULSDR.USA wholesale rack price was at $3.77 as of this writing, suggesting further retail declines are possible. If diesel retreats meaningfully, the LTL.USA headline compresses quickly, not because anything structural changed, but because the arithmetic of the fuel surcharge works both ways.

The second story is structural, and the truckload contract trend is telling it. The truckload market spent nearly three years working off the excess capacity accumulated in 2021 and 2022, and it is now tightening faster than most of the industry expected. 

The LTL market is a piece of the total surface transportation market and as such is heavily influenced by each mode. Part of that capacity is overlapping and in this sense, the LTL carriers are like the shippers who procure capacity. They are subject to the same pricing pressure and will subsequently have to offset it. The market will also demand it as service deteriorates. So far, the hyperreactive fuel surcharge is doing most of the work, but that will most likely have to shift into a more sustained mechanism. 

SONAR subscribers have access to the latest Sitrep on the LTL market for a deeper dive.  

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience.

To request a SONAR demo, click here.

Nominations opening soon for 2027 FreightTech Awards

This fall, FreightWaves will host its annual Future of Freight Festival (F3) in Chattanooga, Tennessee, culminating in the prestigious 2027 FreightTech Awards dinner.

Now in its ninth year, the FreightTech Awards program is widely regarded as the premier recognition honoring the most disruptive technology companies and forward-thinking transportation providers in North American freight.

The road to the 25

The evaluation process is built to elevate true, needle-moving innovation:

  • Companies are permitted to nominate themselves or others. Although a single nomination is all that is required for a company to be considered, the total number of unique nominators is shared with the evaluation team.
  • FreightWaves’ internal research team, market analysts and journalists then carefully vet the nominations to select a curated list of the 100 most innovative companies in freight.
  • That list of 100 is then sent to an independent, external panel of roughly 80 judges –consisting of industry CEOs, academics, investors and logistics executives. Those judges rank their top 25 choices using a traditional points-tally system supervised and audited by accounting firm Henderson, Hutcherson & McCullough.

The resulting FreightTech 25 represents the absolute vanguard of logistics engineering, artificial intelligence and hardware design.

Looking back at last year’s successes

The 2026 FreightTech Awards highlighted a massive shift toward automation, fraud prevention and strategic consolidation.

Focused on combating carrier identity fraud, tech startup Highway secured the coveted #1 spot for its second consecutive year. Meanwhile, DAT Freight and Analytics secured the #10 spot after a busy year of technological transformation propelled by its acquisitions of Convoy, Trucker Tools and Outgo.

Industry heavyweight C.H. Robinson returned to the list for the first time in five years at #13, largely thanks to the rapid, widespread deployment of agentic AI across its Navisphere platform.

2026 also saw several new contenders with Trailer management platform Repowr debuting in the FreightTech 25 at #12 under new CEO Chris Hines. Industry veteran Transflo also made its first official appearance on the final top 25 list after launching high-impact AI carrier workflows. 

These elite performers joined historic winners like Amazon, FedEx, and J.B. Hunt in driving the transportation economy forward.

Nominate your company for 2027

Do you represent a cutting-edge startup, a service provider transforming operations, or an established company pushing the boundaries of transport technology? Ensure your achievements are seen by the industry’s premier decision-makers.

Nominations for FreightTech 100 and FreightTech 25 companies will be opening soon here. Keep an eye out for future articles and contest updates by following our newsletter.

[Register for the 2026 Future of Freight Festival here.]

Mid-term money-saver: DOT wants to pre-screen containers to speed supply chain

The U.S. Department of Transportation today unveiled the American Supply Chain Sovereignty Initiative, which would pre-screen import containers as a way to streamline freight movement through the supply chain.

The project would feature a dashboard connecting logistics hubs, transportation providers and retailers. 

The announcement was made Friday by Transportation Secretary Sean Duffy during a visit to the Port of Los Angeles.

In a release that did not mention pre-screening of containers or other details, DOT stated, “A more transparent supply chain will accelerate cargo processing, lower logistics costs, and empower America’s transportation workforce.”

Duffy revealed the screening proposal in a press conference at the port, comparing it to reduced airport security waiting times for pre-screened travelers. 

Nearly 52 million containers were processed at U.S. ports in 2025, the majority moving through the 10 biggest gateways such as Los Angeles.

U.S. Customs and Border Protection physically inspects only 3-5% of all containers at ports, and importers bear the cost of cargo exams.

“When it comes to our supply chains, time is money,” said Duffy. “Fewer delays mean lower costs throughout the entire supply chain. The American Supply Chain Sovereignty Initiative will prevent bottlenecks, move freight faster, and deliver goods more affordably for the American people.”

The rollout comes amid growing public backlash over soaring prices for food, gas and other staples, and polls showing voter approval cratering over President Donald Trump’s handling of the economy. There is growing sentiment that the affordability issue could cost Republicans their majority in the House of Representatives, and possibly the Senate, in upcoming midterm elections.

Duffy did not say how much the initiative would cost. He called on Congress to include legislation in this year’s National Defense Authorization Act, “giving DOT the framework and flexibility required to securely streamline national logistics.”

He said the initiative will build on the Freight Logistics Optimization Works (FLOW) program and National Freight Strategic Plan, initiatives launched during the presidency of Joe Biden.

Read more articles by Stuart Chirls here.

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RXO’s debt rating at S&P holds; so does its negative outlook

RXO’s debt rating has been affirmed by S&P Global Ratings, but the 3PL still is carrying a negative outlook from the agency.

The action is notable in part because S&P Global is taking a conservative stance about the direction of the freight market. 

“It is unclear if the recent rebound in trucking pricing is sustainable,” the agency said in its accompanying commentary, a factor in holding the rating steady.

The action also solidifies the dichotomy between the ratings of S&P Global and Moody’s on the 3PL. RXO’s (NYSE: RXO) rating at the latter agency is Ba1, which is considered one notch more than the BB rating at S&P Global (NYSE: SPGI) that now has been affirmed. 

The Moody’s grade is one notch less than the cutoff between investment-grade and non-investment grade debt, putting S&P’s rating two notches below that line. 

S&P’s BB rating was also affirmed at RXO for its unsecured notes.

Outlook stays the same

The improved market was not enough even to lift RXO off its negative outlook. That status means a downgrade is possible but not guaranteed given the financial and market conditions. There is no limit to how long a company stays on a negative (or positive) outlook.

The negative outlook for the company, S&P Global said, “reflects the risk that the company will be unable to increase its relative profitability or improve its credit measures to the levels we believe are necessary to stabilize the rating.”

But S&P Global is not completely dismissing the current market. RXO’s credit metrics, the agency said, will improve in the next two years “led by higher spot market prices that we expect will support increased earnings amid early signs of improvement in freight market conditions.”

“However, the company’s margins have lagged those of its rated logistics provider peers, which has prompted us to downwardly revise our assessment of its business risk profile (BRP),” S&P added.

In a cautious embrace of the rise in freight rates, the agency said “market conditions have demonstrated early signs of improvement.”

But it is not enough, S&P indicated, for an upgrade at RXO. “We now place greater emphasis on the company’s ability to achieve higher margins based on our evolving view of its business risk,” the agency said.

RXO is a publicly-traded company. Ratings reports of an agency like S&P Global or Moody’s (NYSE: MCO) generally reveal little new about its  finances. But their views can be more pointed than equity analysts. 

Surging stock price

RXO’s stock price has been on a roll, up 77% in the last year and about 42% in the last month. According to Barchart, there are 4 strong buys on RXO stock from equity analysts, 14 holds and two strong sell recommendations.  

S&P Global noted that adjusted EBITDA at RXO had fallen to $177 million in 2025 from a peak of $366 million in 2022, when it was spun off from XPO, “even as it nearly doubled the revenue from its brokerage segment following its late-2024 acquisition of Coyote Logistics.”

“While we previously viewed the company as an industry leader in terms of its margin profile, its performance over the past three years has caused its margins to decline to levels consistent with or below those of its broader rated peer group,” S&P Global said, citing Echo Global Logistics as an example. 

Echo currently holds a rating of B- at S&P Global. That is four notches less than RXO’s BB.

Given that reduced view of RXO’s position, S&P said “we no longer consider RXO’s operating performance track record as supportive of a higher BRP assessment.”

An improvement in the company’s performance owing to a stronger freight market isn’t enough, to shed the negative outlook, S&P Global said, “The negative outlook reflects the risk that the company will be unable to increase  its relative profitability or improve its credit measures to the levels we believe are necessary to stabilize the rating,” it said.

Higher freight rates are not enough for S&P Global. RXO, it says, needs to show “relative margin outperformance.”

How is it doing in comparison?

“While we expect a sector-wide recovery to bolster the earnings and metrics of participants across the broader freight brokering landscape, our rating remains predicated on RXO demonstrating greater and sustained relative strength in its earnings trajectory relative to its immediate peer group,” S&P Global said. “If we no longer believe the company can differentiate itself from its peer group, we would likely lower our rating by removing the positive comparable rating adjustment.”

The squeeze on brokers over the past few years was recapped by S&P Global: minimal spot market activity and reduced demand leading to an inability “to fully pass through increases in procurement costs to its clients due to existing contractual obligations led to a significant contraction in its margin and heightened earnings sensitivity.”

But even as the ratings and negative outlook held firm, and S&P Global’s view of RXO’s BRP is weaker, the ratings agency did have praise for the company’s position. “We believe RXO is well positioned to leverage its significant scale as a leading brokerage and harness its extensive proprietary data to unlock procurement efficiencies as market conditions evolve,” S&P said. Furthermore, we expect its established relationships with large enterprise customers will serve as a key factor in securing high-quality business.”

In another conservative declaration, S&P Global said “freight brokers are poised to benefit from excess trucking capacity exiting the industry, though it’s still early.” The ratings agency said it is “cautiously optimistic that the recent rebound represents the beginning of a gradual (and sustainable) improvement in truck pricing.”

While the widening of the net that could catch up brokers in liability actions as a result of Montgomery vs. Caribe Transport II has been seen as beneficial for larger players, S&P Global again was cautious, owing to other factors.

“This will likely be more impactful for smaller brokers with larger brokers positioned to potentially take market share,” S&P Global said. “Offsetting these positives, protracted macroeconomic uncertainty and higher oil prices may begin to weigh on freight demand.”

A request for comment from RXO had not been responded to by publication time.

More articles by John Kingston

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Like trucking and railroads, shipping struggles in fight for talent, aging workforce

Shipowners and operators are challenged with a global fight for talent in an industry that relies on 2 million men and women to crew the world’s fleet of commercial maritime vessels.

“This could hardly be more topical at a time when around 20,000 seafarers are stuck in the Persian Gulf,” said Paul Pathy, president of the Baltic and International Maritime Council (BIMCO), at the group’s seminar in Athens. “At times like these, it’s not only the principle of freedom of navigation that is compromised, but also the freedom of our seafarers who are prevented from going home to their families. Once again, they are paying a very high price in the middle of a conflict. Their freedom of navigation should never be negotiable.”

Copenhagen-based BIMCO is a global association of shipowners, charterers, shipbrokers, and agents.

“[W]hen shipping makes the headlines, it’s usually because something has gone wrong, and too often what gets lost behind the headlines is the human dimension; the people,” said BIMCO Secretary General and Chief Executive David Loosley. 

The meeting came ahead of the release later this month of a report detailing maritime workforce issues.

Elpi Petraki, an executive with shipowner Enea Management of Greece and president of the Women’s International Shipping & Trading Association, told a panel about the importance of not only attracting the younger generation of seafarers, but also of focusing on retaining the experience and institutional knowledge of individuals who are transitioning to shore-based roles.

Looking at the profile of a seafarer, and what is needed to prepare them for the future, “there are gaps in the recruitment and training processes,” said Julia Anastasiou, chief crew management officer at OSM Thome, a leading ship management company headquartered in Norway with offices in the United States. She added there is a fight for talent as opposed to a fight for recruitment, and that gaps and costs translate to human beings.

Improvements must be done collectively and involving governments, flag states and other stakeholders, Anastasiou said.

New technologies have made upskilling a critical need for hundreds of seafarers.

“With the new fuels coming in, the industry will need to address this due to the transitional period,” said Marina Papaioannou, regional maritime academies manager at DNV (DNVG02-PRO.OL) of Oslo, one of the oldest classification societies thatset technical standards for vessel safety and performance. She warned that the industry must address issues of safety regarding the new fuels such as liquefied natural gas and ammonia. “Skills such as leadership and communication must be enhanced to make the seafarers feel safe and that the human element must never be left behind,” she added. 

Another panel discussion focused on the growing problem  of criminalization of seafarers.

Eleni Antoniadou, a maritime lawyer at Gard AS, a protection and indemnity (P&I) mutual insurance association in Greece, said that seafarers are frequently scapegoated in cases involving drugs.

“Such cases often get a lot of media attention and often lead to long detentions for the seafarers,” she said. The industry is seeing a rise in drug cases and urged shipowners to support crew by providing legal support, accommodations, medical care, food, and more.

Seafarers in these situations and their families often don’t know what will happen next, said Alan Croft, business development manager at the International Seafarers’ Welfare and Assistance Network (ISWAN). “The role of the network is to reduce the human impact and that prevention and preparedness is critical, including education on the consequences, the risk of cutting corners, what to do, who to contact immediately, what their rights are and how to preserve evidence.” He suggested that a practical emergency pack could make a real difference for seafarers who are essential to global trade but often not treated as such.

Fair treatment of seafarers as a term somewhat predates a feeling that seafarers are treated unfairly, but that states will often say they offer due process, said Leo Bolivar, Manila country manager at International Registries, Inc., which manages the Marshall Islands ship registry. He said that while complicated, a collective effort is necessary in cases of flag states versus coastal states, and all stakeholders must collaborate.  

Read more articles by Stuart Chirls here.

Related coverage:

Port of Los Angeles forecasts 7% container volume decline

Long Beach awards $54M in small business contracts

Conservative network has law protecting U.S.-flag shipping in its sights

For 1st time, U.S. approves controversial LNG production ship

Port of Los Angeles forecasts 7% container volume decline

The Los Angeles Board of Harbor Commissioners has approved a $3.4 billion annual budget for fiscal 2026-2027 for the Port of Los Angeles.

The increase comes as the port, which along with neighboring Long Beach comprises the busiest U.S. container gateway, is forecasting a 7% decline in box volumes, to 9.3 million twenty foot equivalent units (TEUs) in fiscal 2026-2027.

The San Pedro Bay complex has keenly felt the effects of the Trump administration’s trade war with China, with ongoing tariffs and other measures pushing importers to increasingly seek alternative maritime routes into North America through Mexico and Canada. China has also sought out new trade agreements in Africa and boosted business with Europe, as it makes plans to sustain its massive export economy, the world’s largest. 

China’s share of all containerized imports through Los Angeles has fallen to about 40% in 2026, down from 53.4% in 2025 and 61% in 2020.

Port management cited continued volatility in global trade and uncertainty about trade policy as contributing factors to a more cautious cargo volume outlook.

The hub is owned and operated by the City of Los Angeles through its Harbor Department.

Increased investments in operational and community public-access infrastructure are covered in the budget, as well as support for sustainability and technology programs.

“The passage of this budget reflects the strength and forward-looking vision of the Port of Los Angeles. We’re enhancing our infrastructure, advancing our sustainability initiatives, and ensuring we keep the port competitive in the global economy,” said Los Angeles Mayor Karen Bass, in a statement. Bass, who has championed environmental investments that help the port meet water and air quality requirements, and advocated for the port’s economic role, thanked Executive Director Gene Seroka and Commission President Lucille Roybal-Allard for their leadership.

The budget increase totals $665 million over FY2025-2026, mostly on a 31% expansion for capital improvements. But it also includes higher subsidies for the Port’s Clean Truck Fund Rate and cost-of-living increases for staff salary and benefits as the port accounts for outside inflationary pressures. 

Projected operating revenues of $826 million represent a 26% increase y/y, with shipping services accounting for 65% of that. Operating expenses are projected to rise by 6% to $452 million.

Capital improvement spending will set a 10-year mark, and center on container terminal modernization and transportation improvements in and out of the port. Construction has started on the $74 million rail expansion at Berths 302-305 and $130 million SR 47/Vincent Thomas Bridge interchange reconfiguration.

A request for proposals for Pier 500 at Terminal Island, the first new container terminal in decades, was issued in late 2025. The 200-acre terminal will feature two new berths and 3,000 linear feet of new wharf designed for larger next-generation container ships in natural deep water.

Expansions are planned at cargo terminals operated by Fenix Marine Services and LATiL, a unit of Mediterranean Shipping Co., and a new cruise facility to replace and expand existing operations was announced earlier this year.

Read more articles by Stuart Chirls here.

Related coverage:

Long Beach awards $54M in small business contracts

Conservative network has law protecting U.S.-flag shipping in its sights

For 1st time, U.S. approves controversial LNG production ship

Port Houston’s hurricane playbook: Safety first, cargo moving fast 

Canada Post to end door-to-door delivery for 620K addresses by 2027

A Canada Post community mailbox stand as seen in a suburban neighborhood.

Canada Post on Thursday said it will convert 485,000 additional addresses in 37 communities from door-to-door delivery to community mailboxes in 2027, as part of a recently approved restructuring initiative aimed at modernizing the postal service and restoring its financial health.

The planned change in mail delivery service is on top of the 136,000 addresses Canada Post previously said would be converted to community mailboxes in late 2026 or early 2027. 

Parts of Halifax, Ontario and Calgary are among the areas that will lose door-to-door service, according to a news release. Canada Post said it will begin communicating with communities about the change in the next few weeks and months.

Consolidating mail delivery to central neighborhood locations is expected to save considerable sums of money because the cost of delivering to individual homes and businesses is expensive. Officials say the change is needed after Canada Post had a record loss of US$1.15 billion in 2025 and a first- quarter loss of $147.5 million. The national post has lost money for eight consecutive years.

The move to community mailboxes will also increase security by putting nearly all mail and parcels delivered by Canada Post under lock and key.

Earlier this month, more than 50,000 letter carriers represented by the Canadian Union of Postal Workers ratified a new contract after more than two years of labor uncertainty from strikes and other tactics that hurt revenues as businesses shifted mail and parcel volumes to alternative carriers. Contract approval unlocked Canada Post’s ability to move forward with operational and other reforms.

Nearly three quarters of Canadian addresses already receive mail and parcels through some form of secure, centralized delivery such as community mailboxes, apartment lobby boxes and post office boxes.

As part of its transformation plan, Canada Post is converting 4 million addresses that still receive door-to-door delivery to community mailboxes. The national conversion program is expected to take about five years, with different areas transitioning each year.

Canada Post said it is working with local governments in 13 initial communities scheduled for conversion to identify and finalize suitable locations for community mailboxes. As sites are finalized, residents will be notified of the location of their community mailbox and receive keys before any change to their delivery.

More than 80% of parcels delivered by Canada Post fit into a community mailbox’s individual compartment or a dedicated parcel compartment. Parcels that don’t fit or that require a signature are delivered to the door or held for pickup at a nearby post office.

Residential customers who are physically limited from accessing a community mailbox are eligible for accommodations, such as sliding trays, Braille features or a more accessible compartment. In some cases, weekly home delivery may be provided on a seasonal, temporary or permanent basis.

Postal services around the world, confronted by the challenges of declining mail volume in a digital age and competition from more nimble parcel carriers,  are similarly reimagining their business models. The U.S. Postal Service has been losing billions of dollars per year and now is seeking regulatory independence to set prices, reduce service levels where delivery is uneconomical, invest workers’ retirement funds, while implementing operational efficiencies.

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

Canada Post parcel volumes decline 17.2% in Q1

The Faster Labor Contracts Act passed the House

I come from some really wild people and some really wild stories. My paternal grandfather, Jack Emerson, was a farmer in VA who helped raise me on their farm with his daughter. My Dad’s paternal grandfather, Irvin Carpenter, became the subject of a Supreme Court case that held that not declaring all marital assets voids prenuptial agreements. The most notorious was my mother’s European side and my grandfather, Roman Gissel of Gissel Packing in Huntington, West Virginia. 

He literally started with nothing, came to America, and built a meatpacking company from the ground up, and shut down an empire rather than bargain with the NLRB. He closed the doors. Every employee went looking for work. The Gissel Packing case, NLRB v. Gissel Packing Co., decided by the Supreme Court in 1969, remains the fundamental case law for NLRB authorization card bargaining orders to this day. It is taught in every labor law course in every law school in the country. My grandfather lost that case, and it didn’t matter because he had already made his choice. He would rather put the key in the door and walk away from everything he built than operate a business on someone else’s terms. That’s the principle, and it’s one that H.R. 5408 is designed to render irrelevant.

The Faster Labor Contracts Act amends the National Labor Relations Act to impose a compressed, federally mandated timeline for first contract negotiations between an employer and a newly certified union. The sequence is mechanical and non-negotiable. By day 10 after union certification, the employer must begin bargaining. By day 100, if no agreement has been reached, federal mediation is triggered through the Federal Mediation and Conciliation Service. By day 130, if mediation fails, binding interest arbitration is initiated. By day 144, an arbitration panel is seated and empowered to impose a complete first collective bargaining agreement covering wages, benefits, work rules, and all related terms. That is a maximum of 120 days of actual bargaining, 90 days of negotiation, plus 30 days of mediation, before a government-appointed arbitrator who has never dispatched a truck, managed a terminal, priced a freight lane, or calculated the cost of a mile writes the contract that governs your operation.

The bill was introduced last year by Representative Donald Norcross of New Jersey. It reached 218 signatures on a discharge petition on May 20, 2026, which forced it out of committee and onto the floor, bypassing committee chairs, regular order, CBO scoring, and stakeholder input. The discharge petition is one of the most aggressive procedural tools available in the House, and it almost never succeeds. This one did. The floor vote on June 9 passed 230 to 193. Twenty Republicans voted yes alongside all 210 Democrats. The bill is a provision lifted directly from the Protecting the Right to Organize Act (PRO Act), which failed to advance on a bipartisan basis across multiple Congresses. Proponents isolated this one piece and used the discharge petition to ram it through.

The 20 Republican yes votes tell you everything you need to know about the political math. Five came from Ohio: Mike Carey, David Joyce, Max Miller, Michael Rulli, and Michael Turner. Five came from New York: Andrew Garbarino, Nick LaLota, Nicholas Langworthy, Michael Lawler, and Nicole Malliotakis. Two from Pennsylvania: Robert Bresnahan and Brian Fitzpatrick. Two from New Jersey: Christopher Smith and Jefferson Van Drew. Two from Florida: Carlos Gimenez and Maria Elvira Salazar. One each from Nebraska, West Virginia, Minnesota, and Wisconsin: Don Bacon, Riley Moore, Pete Stauber, and Derrick Van Orden. The pattern is not subtle. These are Republicans in union-heavy swing districts in the Rust Belt and the Northeast, members who need union households to win reelection. Ohio, where the Teamsters are deeply embedded in freight and manufacturing, cast five yes votes on its own. New York sent five more. Stauber, who represents Minnesota’s Iron Range, is a former police officer who organized his own union and said so in his press release supporting the bill. These are not ideological converts to organized labor. They are members reading their district demographics and making a survival calculation, and that same calculation applies to Republican senators in Ohio, Pennsylvania, Wisconsin, and Michigan when this bill reaches the Senate floor. 

What happens in the Senate

The bill now moves to the Senate, where it needs 60 votes to advance past a filibuster. That is the firewall. The political dynamics, however, are not as comfortable as they were six months ago. Fisher Phillips, one of the largest management-side labor law firms in the country, noted before the House vote that there was a meaningful possibility the White House could issue a Statement of Administration Policy in support, given the administration’s efforts to appeal to working-class voters. If that happens, it provides political cover for Republican senators in labor-heavy states to vote yes. The bill does not need every Republican senator. It needs eight, assuming all Democrats vote yes. In a political environment where the White House is competing for union households and where 20 House Republicans have already crossed the aisle, eight Senate votes is not impossible. It is a lobbying campaign.

If the Senate passes it, the president signs it, and the law takes effect, the bargaining landscape for every unionized and potentially unionized employer in the country changes overnight. The current system, whatever its flaws, gives both sides time to understand the operational realities of the business before committing to terms. First contract negotiations under existing law can take a year or more. That flexibility exists because different industries, different companies, and different workforces have different realities. A first contract for a 50-driver LTL terminal in Ohio looks nothing like a first contract for a pipeline construction crew moving across six states, which looks nothing like a first contract for a parcel sorting facility. H.R. 5408 treats them all the same: 120 days and an arbitrator.

What this means for trucking

The Teamsters represent workers at UPS, ABF Freight, TForce Freight, Yellow’s former operations, and dozens of LTL and specialized carriers. The International Brotherhood of Teamsters has been one of the most active unions in the freight sector, and it has been expanding its organizing efforts into non-union carriers, last-mile delivery operations, and warehouse workforces. Under the current framework, first-contract negotiations can take long enough for both sides to build a relationship and understand the cost structure. Under H.R. 5408, that clock runs out before a carrier has completed a single budget cycle.

Trucking operations involve multi-state regulatory compliance, fluctuating fuel costs, seasonal freight patterns, driver classification issues, equipment financing, and insurance structures that are fundamentally different from those on a manufacturing floor or in a retail store. A government arbitrator writing a contract for a trucking company in 144 days without understanding those realities is a coin flip with your cost structure. The arbitrator does not know your deadhead percentage. The arbitrator does not know what your insurance renewal looks like. The arbitrator does not know that your fuel surcharge is the difference between a profitable quarter and a loss. The arbitrator writes a contract based on comparable agreements in the industry, and, in this context, comparable means whatever the largest unionized carriers agreed to under entirely different economic conditions.

If you are a non-union carrier watching organizing activity among your drivers or in your terminals, the compressed timeline changes the calculus for the organizers too. Under current law, the difficulty of reaching a first contract is one of the factors that tempers organizing campaigns. Workers know that a union vote is the beginning of a process, not the end of one. Under H.R. 5408, the promise becomes concrete: vote yes, and you will have a contract within five months, guaranteed, because if the company does not agree, the government writes one. That is a fundamentally different sales pitch on an authorization card, and it makes organizing easier at exactly the moment the Teamsters are expanding their footprint.

The option 

The American Pipeline Contractors Association sent a letter to the full House on June 4 opposing both the bill and the discharge petition, calling it a clear attempt to circumvent committee jurisdiction and warning that it creates a predictable endgame arbitration effect that will distort incentives on both sides of the table. APCA’s point about incentive distortion applies to every industry: if both sides know that an arbitrator will impose a contract on day 144, neither side has any incentive to negotiate in good faith during the first 100 days. The union holds out for arbitration because the arbitrator will likely impose terms closer to the union’s position than the employer’s final offer. The employer holds out because making concessions during bargaining only shifts the baseline the arbitrator will start from.

The AFL-CIO argues that the threat of arbitration actually incentivizes faster voluntary agreements, citing experience in other countries with similar frameworks. The data from those countries are mixed, and the comparison ignores a fundamental difference: American labor law has never included binding interest arbitration for private-sector first contracts. Introducing it is not a tweak. It is a structural change to a system that has operated on voluntary agreement for 90 years.

Another option that H.R. 5408’s sponsors do not discuss is that acknowledging it would undermine the bill’s entire premise. An employer can close. My grandfather did it. Roman Gissel shut down Gissel Packing rather than operate under a bargaining order he considered illegitimate. The company was gone. The jobs were gone. The NLRB had its order, and nobody to serve it on.

Hostess Brands did the same thing in 2012. After the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union rejected a last, best, and final offer and launched a nationwide strike, Hostess filed a motion to liquidate. The bankruptcy judge approved it. Thirty-three bakeries closed. 565 distribution centers shut down. 18,500 employees went home. The Twinkies brand survived because someone else bought it out of liquidation and reopened without the union. The workers who struck did not get better terms. They got unemployment.

That’s just math. An employer facing a government-imposed contract that does not reflect the business’s economic realities has three choices: accept it, fight it in court, or close. If the imposed contract makes the operation unprofitable, closing is not spite. It is the only rational business decision. The sponsors of H.R. 5408 assume that employers will accept an arbitrated contract because the alternative is worse. For some employers, the alternative is not worse. The alternative is to walk away, and the employees who voted for the union bear the cost of that decision.

Living on your knees is no way to live, and some employers will make that calculation. Not because they hate their workers, not because they are anti-union on principle, but because a government-written contract that does not account for their fuel costs, their insurance structure, their equipment financing, and their competitive position is a contract they cannot survive. The bill’s supporters have never run a trucking company. They have never looked at a P&L that is 2 percent upside down on a $40 million revenue base and tried to figure out which costs to cut to stay alive. They have never sat across from a driver who just lost his job because the company could not make the math work. They wrote a timeline, attached an arbitrator, and called it reform.

What you should do right now

If you are a fleet operator with union exposure, call your labor counsel. Not next month. Now. The Senate timeline is uncertain, but the political momentum is real, and if this bill clears the Senate, it takes effect without a phase-in period. You need to understand what your exposure looks like under a 120-day mandatory bargaining framework and what your options are if an organizing campaign begins while this law is in effect.

If you are an ATA member, an OOIDA member, a TCA member, or affiliated with any state trucking association, call your government affairs office and ask what their position is on H.R. 5408 and what they are doing about it in the Senate. This bill was not written with trucking in mind, but it applies to trucking, and the people who wrote it are not going to carve out an exemption for an industry they did not think about. The discharge petition succeeded because the industry groups that should have been fighting it were focused on other priorities. The Senate fight starts now, and if the industry shows up late again, the arbitrator will be writing your contract by Christmas.

Twenty House Republicans voted yes on this bill. That means the bipartisan coalition exists. It means the political calculation that supporting organized labor is good politics in a working-class election year has already been made by enough members to pass it. The Senate is the firewall. If your senator is undecided, that senator needs to hear from you, from your trade association, and from every fleet operator and small business owner in the state, before the vote, not after. The clock on the bill is 120 days. The clock on your ability to influence the outcome

Mexico holds top US trade spot, as Trump raised doubts on renewing USMCA

Mexico remained the largest U.S. trading partner in April, extending a streak that began in 2023 and highlighting the continued strength of North American supply chains.

The surge in cross-border trade continues despite growing uncertainty surrounding the future of the United States-Mexico-Canada Agreement (USMCA) trade pact, according to President Donald Trump.

On Wednesday, Trump said the U.S. may not renew the agreement, arguing that the U.S. does not need imports from its North American neighbors and should receive more favorable trade terms. 

“I’m not looking to renew ⁠it,” Trump said according to Reuters. “We don’t need anything that Canada ​has. We don’t need anything that Mexico has, but they need everything that ​we have. They have to treat us better.”

Under the agreement, the three countries must approve a renewal by July 1 or signal their intention to withdraw, a process that could trigger a lengthy renegotiation period.

Despite Trump’s comments, USMCA negotiations are ongoing. The Office of the U.S. Trade Representative has scheduled a second round of talks with Mexico in Washington on Wednesday and Thursday focused on agriculture and competitive trade practices. It will be followed by additional discussions in Mexico City during the week of July 20. 

Mexico extends lead over Canada in U.S. trade rankings

Two-way trade between the U.S. and Mexico totaled $86.04 billion in April, up 23.4% from the same month a year earlier, according to U.S. Census Bureau data analyzed by WorldCity. U.S. exports to Mexico totaled $35.34 billion, while imports reached $50.69 billion.

Mexico accounted for 16.6% of all U.S. trade in April and ranked first among U.S. trading partners in overall commerce, exports and imports. The April total was the highest monthly trade value with Mexico since WorldCity began tracking the data in 2013.

Canada ranked second among U.S. trading partners with $64.8 billion in two-way trade during April, while Taiwan surged to third place at $29.6 billion. 

China slipped to fourth place at $29.2 billion in trade with the U.S., marking one of its lowest rankings among U.S. trading partners in decades as tariffs and supply-chain diversification continue to reshape global commerce.

Overall U.S. trade totaled $518.45 billion in April, with exports of $218 billion and imports of $300.46 billion. Total trade increased 11.6% compared to April 2025.

Border gateways drive growth

Cross-border land ports continued to dominate U.S.-Mexico commerce.

Port Laredo remained the busiest U.S.-Mexico gateway in April, handling $33.35 billion in trade, a 21% increase from a year earlier. 

The crossing accounted for nearly 39% of all U.S.-Mexico trade by value. Other leading gateways included the Ysleta-Zaragoza International Bridge in El Paso ($12.27 billion), Otay Mesa in California ($4.99 billion), Santa Teresa, New Mexico ($4.88 billion), and Eagle Pass, Texas ($4.05 billion).

The strength of border trade was also reflected in national rankings. Port Laredo was the busiest U.S. trade gateway overall in April, handling $34.16 billion in commerce with all trading partners, ahead of Chicago O’Hare International Airport ($33.9 billion) and the John F. Kennedy International Airport ($29.1 billion).

Can freight balance speed and security?

Disclosure: Phillip Brink is the host of the Fraud Watch Podcast, the FreightWaves program recapped in this article. As host, Brink has a professional stake in the program’s reach and visibility. He has no commercial relationship with Malcolm Harris or What the Truck beyond their participation in this recorded conversation.

Program Recap: This article summarizes a conversation from an episode of the Fraud Watch Podcast, a FreightWaves program hosted by the author.

This morning on the Fraud Watch Podcast, I was joined by Malcolm Harris, host of What the Truck and a frequent voice in transportation media, for a conversation about freight fraud, cargo theft, and where the industry is headed next. While the discussion touched on everything from relationships in freight to emerging technology and even a few NBA Finals predictions, the conversation ultimately centered on a much larger issue facing the transportation industry: the growing need for verification in a business that has historically rewarded speed.

For decades, freight has operated on trust. Brokers, carriers, and shippers built relationships through reputation, consistency, and the ability to move freight quickly. Many transportation professionals can remember a time when a carrier could call on a load, provide the necessary information, and be dispatched within minutes. Today, that environment has changed dramatically. Harris pointed to identity manipulation, cargo theft, compromised credentials, and organized fraud schemes as factors that he said have forced many transportation companies to question assumptions that were once considered standard operating procedure. FreightWaves has not independently verified Harris’s characterization of the scope or causes of these industry pressures. Similar concerns have been highlighted in recent cargo theft reporting from Verisk CargoNet, which has documented the growing use of carrier impersonation and credential-based fraud schemes.

Trust must be verified

One of the strongest themes from the conversation was the industry’s transition from assumed trust to verified trust. Harris noted that transportation still runs on relationships, but those relationships increasingly require verification before freight can move safely.

According to Harris, the most successful organizations are beginning to recognize that speed alone is no longer enough. While rapid response times and operational efficiency remain important, companies are learning that accuracy and verification must come first. Harris argued that the pressure to move freight quickly has created opportunities for bad actors to exploit weaknesses in onboarding, carrier selection, and load coverage processes. As a result, many organizations are reevaluating how they balance efficiency with risk management.

The discussion also explored how verification is evolving from a reactive activity into a dedicated business function. Rather than relying solely on technology or individual experience, leading organizations are implementing structured processes designed to produce consistent results regardless of who is reviewing a carrier. The goal is no longer to simply identify obvious red flags. The goal is to create repeatable procedures that reduce the likelihood of fraud before a shipment is ever assigned.

The future will require both people and technology

While technology remains one of the industry’s most important tools, Harris emphasized that technology alone will not solve the freight fraud problem. Harris said artificial intelligence, automation, and advanced verification platforms will continue to improve operational efficiency, but argued that they cannot fully replace human judgment. According to Harris, the most effective approach will likely combine technology with trained professionals who understand how to interpret risk and make informed decisions.

Harris described what he characterizes as a growing trend: organized cargo theft operations becoming more sophisticated, more structured, and more difficult to detect, though FreightWaves has not independently verified this characterization of the cargo theft landscape. Harris said he believes some freight fraud schemes involve coordinated groups that understand transportation processes and exploit operational weaknesses, though FreightWaves has not independently verified the prevalence or structure of such schemes.

Separately, Verisk CargoNet’s first-quarter 2026 cargo theft analysis highlighted related concerns. According to the CargoNet report, impersonation-based theft has matured into what it described as a “systematic, scalable criminal methodology.” The report found that while total supply chain crime events declined year over year, criminal networks are increasingly using credential theft, compromised business accounts, and carrier impersonation schemes to bypass traditional anti-fraud controls. CargoNet concluded that the shift toward carrier impersonation requires “robust identity verification throughout the lifecycle of a shipment, from booking to delivery.” Harris’s comments in this episode were not drawn from the CargoNet report, and FreightWaves has not independently verified Harris’s characterizations of the cargo theft landscape.

One of Harris’s most notable predictions was that verification could eventually become its own department within freight brokerages. He noted that verification responsibilities are often spread across carrier sales, operations, compliance, and management teams. Harris predicted that dedicated verification professionals may eventually become just as important as sales representatives or operations personnel. Harris said he believes companies that invest in training, process development, and verification expertise may be better positioned to protect both their customers and their reputations

Harris argued that freight fraud is no longer an occasional disruption and characterized it as an operational challenge requiring process, education, technology, and accountability. Harris said he believes verification may eventually become just as important as speed. He also said he believes organizations that embrace that shift will be better prepared for the challenges ahead. FreightWaves has not independently verified the industry-wide trends discussed in this article.

Disclosure: Phillip Brink is the host of the Fraud Watch Podcast, the FreightWaves program recapped in this article. As host, Brink has a professional stake in the program’s reach and visibility. He has no commercial relationship with Malcolm Harris or What the Truck beyond their participation in this recorded conversation.

Click here for more articles on cargo theft and freight fraud by Phillip Brink.

Eight indicted in alleged carrier impersonation scheme; prosecutors allege $4.49 million in cargo losses – FreightWaves

Why the safest freight brokerages are usually the most boring – FreightWaves

Why cargo theft affects every American – FreightWaves