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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.

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‘Project44’s vision has always been global’

August 2019: Two Trucks and a Fresh Start. Today: Nearly 40 Trucks, 140 Trailers, and a 40-Year-Old Carrier.

I have known Jerry Murphy for almost two years. We talk every couple of weeks. And I can tell you there is no version of him for the cameras. The man you hear on this episode is the same man I get on those calls.

He did not have a driver’s license when he started his trucking company. It was suspended, for reasons connected to the drinking that had already cost him most of a career. He had a felony. He had no clear path and no template. What he had was a Google search for how to get a DOT number and a father willing to haul cars on the weekends with him.

Watch the full episode: Jerry Murphy sits down with me on The Long Haul to walk through the ten-year grind behind an acquisition that looked overnight to everyone but him.

That was 2017. This summer, Jerry sat at a table with his wife and signed the papers to buy a trucking company that had been running for four decades, adding roughly 25 trucks and 140 drop trailers to the operation he built himself. He celebrated for one evening. Lunch, then the couch, then back to work the next morning.

I had been asking him to tell this story for a long time. He finally said yes. What follows is what he told me, and I think it is the most important conversation I have had on this show.

The Kid Who Drove a Semi at 14

Jerry grew up in Washington County in southern Ohio, a self-described country boy with great parents and no money. He says he never knew he was poor. His parents made sure of that.

His father worked industrial hydro blast and vacuum truck work, the environmental side of heavy industry, and Jerry calls it a huge industry that nobody sees. Every uncle on both sides of the family did the same work, and Jerry was a shop boy for his father in the summers.

That is where he drove his first big truck, at 14. His father made him an offer: back it into the company lot without breaking a gear, and the two of them would trade paychecks. He learned on twin stick. Out in the country, if you wanted to see your friends, you rode, so it was dirt bikes and four wheelers first, then Harley Davidsons.

After high school, college was not for him, so he followed his father into the business and rose fast. He had been around the equipment his whole life and he was not scared of the hours, having watched his father work 80 and 90 hours a week. He climbed from the field to supervision to project management, and he was, by his own account, very good at it because he put everything into it.

He also stepped into the lifestyle that came with it. Work hard, party hard, play hard. Trade work, out of town, 12 and 14 hour days, then the bar all night.

“You Don’t Get to Decide When That Flips”

Jerry is an open book about what happened next, and he says it plainly: he is a recovering alcoholic.

He describes the progression with a line that stuck with me the first time I heard it. He was working full time to drink part time. And then, before he knew it, he was working part time to drink full time.

“You don’t get to decide when that flips,” he told me. “You’re just having a good time until you’re not.”

He was young, easily influenced, and, he says, deeply insecure, using the drinking to mask it.

Then came the wreck. Jerry had been drinking and should not have been behind the wheel. A good friend offered him a ride home. Jerry told him he was going to grab something out of his truck. He climbed into it instead and took off. He does not remember any of it.

The truck went left of center, off the road, and hit a telephone pole hard enough to push the control arms back underneath the cab of a crew cab diesel pickup. It hit on the passenger side. Jerry says that is likely the only reason he is alive. It knocked him out and split his head open. The deputy sheriff who found him was a friend from high school. Jerry woke up in the hospital.

“Murphy, we thought you were gone,” his friend told him.

The career did not survive it. Jerry says his name in the business was good enough that other people gave him chances, and he went to three different companies. They all ended the same way. He burned the bridges himself, and he does not dress it up. “It wasn’t their fault,” he said. “It was my fault. I just couldn’t get my stuff straight.”

The Conversation With His Daughters

There was no program. No countdown. No court-ordered rehabilitation that took. Jerry had been through all of that, and none of it worked, because he did not want to get sober.

What worked was a look on two faces.

He had started his company by then and was working late in his shop, drinking while he worked on his truck. On the way home he got pulled over and charged with a DUI. He went to jail and got bailed out the next day.

His twin daughters were nearly 13. They knew he had been in trouble before, but they were finally old enough for him to have the conversation directly, and Jerry decided they deserved to hear it from him. He pulled them aside and told them what he had done.

“They just had an overwhelming look of disappointment on their face,” he said. He still gets emotional talking about it.

He never drank again after that day. He is quick to say it was not easy and will not pretend otherwise. He had to learn to cope, and everything else that comes with sobriety came after. But the decision itself was made in that room. His sobriety date is August 26. His wife, the woman who put up with all of it, is still with him.

I understand this part of his story better than most. In March of 2022 I made the same decision for myself. I used to pick hotels based on the bar in the lobby, and I did not see it for what it was at the time either. Nobody wants to.

Once he got sober, Jerry says, he started finding all the other reasons. That is the part he wants people to understand about addiction: how selfish it makes you, and how completely it convinces you that you are the only one it is hurting.

“Even if you’re just the guy that’s having some beers with his friends every night,” he said, “there’s people at home that would probably rather have you at home.”

Building It Without a License

Sober and starting over, Jerry went looking for something to build.

He had left environmental work when he burned the last bridge, moved to Arizona, and gone to the Motorcycle Mechanics Institute to become a Harley technician. He loved the job, but in Ohio the work is seasonal, and he did not want a seasonal job for the rest of his life. So he came back to environmental work while he figured it out.

Then a friend mentioned he was hauling cars on the weekends and making decent money. Jerry told his dad, and his dad said he would do it with him. Jerry calls himself a research junkie. He googled how to get a DOT number and did the whole thing himself, without a clear path and without a license to his name.

They hauled cars on weekends from 2017 to 2019. In 2019 he went full time, bought a semi, and got on a local contract running power only. August of that year, he got sober.

He built the company on the power only model, hauling for a big retail store, and he is candid that the appeal was that it let him grow without doing much selling. At one point he had five trucks on that single account.

Then the retailer shut its doors.

Jerry had diversified a little, luckily, right before it happened. But it was tight. There were weeks he could not make payroll, when his account went negative the moment payroll came out. He nearly went out of business after COVID as well. His lesson from it is the oldest one in the business, and he says it without flinching: do not put all your eggs in one basket.

The Load That Explains the Whole Business

I pushed him on something that has always stood out to me about his operation. Jerry is an introvert, and I say that with sincerity because he is my guy. Yet six months ago his trucks were not on the spot market at all. Everything was relationship-based contract freight, with spot used only for backhauls. I wanted to know how an introvert with a handful of trucks pulls that off.

His answer went back to sobriety, not sales.

“That goes back to being the person that you say you’re going to be,” he said. When he was drinking, he would tell someone he would be there and then not show up. He was not dependable. “You can’t carry that into business.”

He tells a story that gets the point across better than any pitch. One of his customers called him in a pinch, needing help with two loads heading north. Jerry does not drive much anymore, but he took one himself and one of the customer’s own drivers took the other. He offered to run up together. The driver passed.

The next morning the customer called Jerry to ask whether the contact at delivery had arrived. Jerry said he was 20 minutes early and around the corner, and surely the customer’s own driver was already there.

“No, Murphy,” the customer told him. “My drivers aren’t like your drivers. You’re going to be there first.”

Jerry delivered the load, put all his straps away, and was pulling out of the facility as the other driver was pulling in.

“You have to be the most dependable person out there, no matter what,” he said. “That’s what’s worked for me.”

His drivers tell him the same thing. When Jerry says something, it is the gospel. His customers know it too. That reputation is what put an acquisition on the table years later, and Jerry knows exactly why.

“Hard work and honesty will get you further in any business,” he said.

The Squeeze Nobody Warns You About

Before the acquisition, Jerry hit the wall that catches most small carriers, and his description of it is one of the most useful things in the entire conversation. I know it because I lived it too.

“When you’re a small trucking company, it’s not bad. You got three or four trucks, you’re doing all right,” he said. “You approach five, six, seven trucks, it gets tough, because you got some big bills but you don’t have the revenue the big companies have.”

He was putting less money in his pocket at six and seven trucks than he had at three and four. There is a point, he said, where you either scale back or you scale up fast.

Then the phone rang.

A gentleman called wanting to know if Jerry would come run his company. Jerry told him he was not in the business of growing somebody else’s company, he was trying to grow his own. Then he asked, half joking, whether the man wanted to sell it.

“Well, actually, I do,” the man said. “That’s why I’m calling.”

The company was 40 years old with a spotless safety rating, beautifully run, sitting in Jerry’s own backyard. Some of its drivers had been there 40 years. The deal took about a year, on and off, with stretches where Jerry was certain it would not happen. When it closed, he added roughly 25 trucks and 140 drop trailers, putting him at better than a four to one trailer to truck ratio and a fleet approaching 40 units.

When the office team at the acquired company learned it was selling, one of them cried. She was scared of the new guy before she ever met him. She did not know the new guy I knew. She is now, by Jerry’s account, one of his biggest assets, and one of his first moves was taking better care of the people who came with the company.

“We’re not a trucking company, we’re a people company,” Jerry said. “We just happen to use trucks to move freight. Trucking is trucking. All these companies are doing the same thing, we’re all moving freight. The way you take care of your people, that’s what matters.”

“Joe, Do You Think I Can Do It?”

The other half of the acquisition story happened in a banker’s office, and it is the part I point to when people ask how a guy with six trucks and a record ends up buying a 40-year-old carrier.

“I ain’t got much, but I take care of my credit.” Jerry said that to me long before any of this happened, and he meant it. The banker who financed his first truck financed every truck after it. His name is Joe. He watched Jerry grow, watched him pitch schemes and told him to think about them, and watched Jerry call once to ask if something could be done with the payments because he could not make payroll. And he watched Jerry do all the right things anyway.

When Jerry came to him about buying the company, they talked it through more than once. Joe told him he would give him the money.

“Joe, do you think I can do it?” Jerry asked him.

“If I didn’t think you could do it,” Joe said, “we wouldn’t be having this conversation.”

Jerry says Joe does not know what that meant to him. “The people that have been watching you from behind the scenes have faith in you because of the decisions you made and the way you changed your life,” he said. “When I say your word matters, your word matters.”

He walked into a local bank and asked for seven figures. The banker said no problem. That is what a decade of small, unglamorous, unwatched decisions buys. Nobody sees your credit score move a point or two. You only get the major alerts. But it is happening the whole time, and one day it is the reason a bank says yes.

One Night on the Couch

Jerry signed the papers with his wife beside him. They went to lunch. They spent the evening at the house on the couch. He went back to work the next morning.

I asked him why he could not give himself more than one night, after the felony, the drinking, his brother, all of it.

He does not really have an answer for it, and he admits his wife raises it with him constantly. Part of him still operates like the win is not his to enjoy, like there is a punishment still running. Part of it is simply how he is wired.

“We got to the finish line,” he said. “But it’s not a finish line. It’s a relay line. The finish line moved. Now we got to get somewhere else.”

A mechanic at a local dealership told him it seemed like the whole thing happened overnight.

“I’ve been in business ten years, man,” Jerry said. “It’s not overnight. It’s grind. People want the get rich scheme. But those are the people going on four vacations a year, spending all their weekends partying. They’re not grinding, so they don’t see you grinding behind the scenes.”

There is one more detail that says the rest of it. Jerry had wanted a particular shiny new pickup for three years. He bought the cheaper one instead, because he can work on that one himself. He is the second person I have ever called humble, and it still makes him uncomfortable when I say it.

The Brother He Carries

The hardest part of our conversation is the part Jerry did not have to share and did anyway.

Several months ago, Jerry’s brother took his own life. He had been doing the same environmental work the family had always done, and he had been living the same way Jerry once lived.

When the family was gathering pictures for the celebration of life, Jerry saw image after image of his brother sitting next to him.

“All he wanted was to be like me,” Jerry said. “And he was just like the old me.”

He sits with a question that has no clean answer. “I walked him into that life, but I couldn’t walk him out. And now he’s not here.”

He carries another one alongside it. The high school friend and deputy sheriff who pulled him out of that wrecked pickup and told him they thought he was gone is also no longer living. He took his own life too.

“I sometimes wonder why my life was spared,” Jerry said. “Because I didn’t feel like my life was worth anything back then.”

It would have been easy, he said, to set his faith aside and ask God why. Instead he leaned in harder. He credits his wife with bringing him closer to it, and jiu jitsu, which he has trained for about six years, starting not long after he got sober, with giving him an outlet and a room full of people who never knew the old him. When he tells those guys the stories, they say, you did that?

“I’m telling you, totally different person back then,” he says.

His biggest fear now is not failing at business. It is not understanding what he is supposed to do with what he has been given.

“It Can Be You”

Jerry hires a lot of drivers in recovery. He talks to them about the thing that finally made it stick for him, which was not willpower or a program but disgust. He got so sick of the person he had been that no amount of money could take him back to him.

He remembers a guy at the Harley shop, another biker who had gotten sober, who told him he had once believed that being a drunk was simply who God wanted him to be. That this was all he was. And then he chose to walk away from it anyway. That stuck with Jerry, because he had believed the same thing about himself.

“I’m not supposed to be anything special. I’m not supposed to be anything,” Jerry said. “And that’s not what it is. Anybody can change.”

A friend from jiu jitsu who runs a commercial tire business pulled him aside at the new shop and talked for an hour, telling Jerry he had been talking to his wife the night before about how proud he was, and that he had told her, not as an insult, that Jerry is just a regular guy.

“I think when you’re that person that’s drunk and you think God doesn’t have anything in line for you because you’re a regular guy,” Jerry said, “all these people are regular guys. I was a regular guy. I am a regular guy. We’re all regular people.”

The culture he built runs on it. His drivers call him about their personal finances and about decisions that have nothing to do with freight. One of his guys grew up with a wood burner in a trailer and now puts on a car show every September to buy Thanksgiving dinners for families back home.

“These people had it in them before they met me,” Jerry said. “But God put them in my path for a reason. Somebody to take their life in their own hands and say, hey, I’m going to make a change, and they do it, and they give back? That’s a win all around.”

I asked him to speak directly to the man listening who has a record, a bottle in his hand, a loss he has not talked about, and a quiet certainty that he is disqualified. He did not hedge.

“I was all of the above,” he said.

He has heard the line a thousand times, some version of “I’m a felon, I can’t make it.” He did not have a license when he started his trucking company. He did not have money. And he says the thing that actually holds people back is neither the record nor the money.

“They want to quit because it gets hard,” he said. When you cannot make payroll, when the account goes negative, when the one customer holding up your whole operation shuts its doors, he knows exactly how easy it would have been to tell everybody he was shutting down, sell the trucks, and go drive for somebody else.

“Don’t give up. Burn the ships,” he said. “There is no plan B. Plan A is what’s going. You might have to change plan A. Plan B is quitting, and we ain’t doing that. Business is a roller coaster. Some days you’re on top, some days you’re on bottom, and you don’t always get to decide when that is.”

Here is what I told him, and I meant every word of it. I am proud of him, because I know the journey. A felony, a bottle, a brother he will carry for the rest of his life, two trucking companies, and a room full of people whose lives are better because he did not stay down.

Rock bottom is not a place you visit once. Sometimes it has a basement. But if a kid from nothing in Circleville, Ohio, can climb out twice and buy the company everybody thought he could not, you are not disqualified either.

You do not need more motivation. You need structure, you need people, and you need to stop letting humble steal your happiness.

If you or someone you know is struggling, the 988 Suicide and Crisis Lifeline is available 24 hours a day. Call or text 988.

Unified Agenda at FMCSA spells out ambitious plans for coming year

The Unified Agenda of the Department of Transportation (DOT), and in particular that part of it that applies to the Federal Motor Carrier Safety Administration, is a laundry list of ongoing processes and aspirational goals that leaves significant room for interpreting what the department and FMCSA’s priorities are for the coming months and year.

The agenda released earlier this month is the first in more than a year. The normal rhythm is a twice per year release of the priorities. But that second release didn’t happen in 2025.

While it is easy to dismiss the agenda, because it doesn’t have the force of law or requirements that any self-scheduled deadlines be met, P. Sean Garney, co-director of Scopelitis Transportation Consulting, said it was “a decent barometer of the type of things that the federal government is thinking about doing.”

He did concede, however, that many of the items on the Unified Agenda “have been on there for years and years.”

Wording in the entries in the Unified Agenda is usually short on specifics and history. The language “is the most vanilla description they can find because they are just like, these are things we’re thinking about,” Sue Lawless, a partner at the Scopelitis Law Firm who held several leading positions at FMCSA earlier in her career, said of the agenda. “You’re not going to get the backstory from the Unified Agenda.”

How much can they get done?

The list of items released this month was seen by Lawless and others as ambitious. Maybe too much so: Lawless said of the items on the list, and their projected dates for hard action such as publishing a Notice of Proposed Rulemaking (NPRM) by the end of this month, “There’s no way you’re going to get all of these things out and done. When you look at all the things they’re proposing, the majority of them are very substantial heavy lifts for the agency to do.”

Speaking from the carrier side of the transportation sector, David Heller, senior vice president of safety and government affairs at the Truckload Carriers Association, said this year’s version of the agenda “is one of the most aggressive ones I have seen in my time.”

The TCA earlier last month published a white paper on FMCSA with the title “Proposals for Comprehensive Reform: Prioritizing Investments in Core Safety Mission.” Heller said the changes called for by TCA in that document “goes almost hand in glove” with the agenda, because the priority list needs a lot of resources to get it done. And one of the themes in the paper was that FMCSA needs more personnel and other tools. 

Despite the fact that FMCSA is one of the “most consequential” agencies in the federal government, the TCA paper said “it remains one of the smallest operating administrations” in the DOT.

“FMCSA regulates hundreds of thousands of interstate motor carriers, millions of commercial drivers, and the vehicles that move a substantial share of the nation’s freight and passengers,” the white paper said. “Despite the scale of that responsibility and the persistent public-safety risks associated with large-truck and bus operations, the agency continues to operate with limited staffing, constrained resources, outdated regulatory structures, and fragmented oversight tools.”

Heller said FMCSA has been adding resources. “Is it going to be enough?” he said. “I don’t have that math.”

But he added that the report and the 48 FMCSA items on the Unified Agenda “are almost hand in glove.”

Continuation of tougher policies

Heller said several items in the agenda are signs the administration and FMCSA administrator Derek Barrs “will continue to be aggressive in enforcement by taking advantage of the opportunity of getting these bad carriers off the road. It’s finally time that the agency has done this.” 

Issues that already have been dealt with through other actions are in the agenda. For example, an item that had not been published previously in earlier agendas asks whether the rule on English language proficiency should be codified as an out of service violation.

President Trump signed an executive order last year requiring enforcement of the long-standing law that truck drivers need to be proficient in English. The item in the agenda if it takes the next step presumably would find the rules in the executive order making its way into federal law. 

Unlike other items in the agenda, the question of codifying the English language rule has no proposed date for the launch of a NPRM or an Advanced NPRM.

Focusing on CDLs

Another sign that what has been described as a “crackdown” will continue was a new proposal for CDL standards. 

The agency, according to the agenda item, “is proposing to amend its regulations to enhance the security standards for the State-issued commercial driver’s licenses (CDLs) and commercial learner’s permits (CLPs). This action would strengthen the integrity of the CDL and CLP issuance process and reduce the risk of fraud.” The changes would involve such standards as document verification and record retention.

Among the items on the agenda that were mentioned by Lawless as significant was the Framework for Automated Driving Systems (ADS) Safety which would regulate autonomous vehicles.

Like more than half the items in the agenda, it had been published previously. And there actually were two comment periods on a pair of Advanced NPRMs that closed in 2019 and 2023, respectively.

The entry on ADS in this year’s agenda says the “action date” for a full NPRM is August.

“I don’t know what approach they are going to take to establish guardrails for autonomous equipment motor vehicles,” Lawless said. “But it seems like that would be ahead of what the NHTSA is doing.”

That reference was to the fact that the National Highway Traffic Safety Agency also has items in the Unified Agenda to deal with the issue of autonomous vehicles.

The FMCSA entry on an ADS regulatory action is predictably vague. “The proposed changes to the commercial motor vehicle operations, inspection, repair, and maintenance regulations prioritize safety and security, promote innovation, foster a consistent regulatory approach to ADS-equipped CMVs, and recognize the difference between human operators and ADS.”

That reference to defining what constitutes a human driver was mentioned by Garney as a key challenge. 

“Is the autonomous driving system considered a driver under the regulations or not?” he said. “Their position has sort of flip flopped over the years.”

Garney gave an example of the type of issue regarding defining human driver requirements in an autonomous world. “How do you accomplish certain inspection regulations if there is not a driver to conduct them?” he said. 

Broker transparency still there

An item that has been on the agenda previously and remains there but with little action is the request by the Owner-Operator Independent Drivers Association (OOIDA) and the Small Business in Transportation Coalition (SBTC) for greater transparency from brokers.

The transparency request would require brokers to produce an electronic copy of a record of a transaction the 3PL managed within 48 hours of the deal. 

It went through an NPRM in 2024, a reopened comment period in February 2025. But FMCSA then signaled it was delaying any further action.

The item on the Unified Agenda suggests a supplement NPRM will begin this month, which is already more than half over.

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ArcBest announces layoffs, closing 10 LTL terminals

a parked ArcBest trailer

ArcBest announced a restructuring Thursday that will reduce its workforce by approximately 2%. It will also consolidate some less-than-truckload terminals, shedding roughly 1% of the doors from its network.

The Fort Smith, Arkansas-based transportation and logistics provider has over 14,000 employees.

“The reductions include employee separations, the elimination of certain open positions, and the non-replacement of certain positions vacated through retirements and other attrition,” a filing with the Securities and Exchange Commission said.

Its LTL business, ABF Freight, operates approximately 240 terminals with 9,600 doors. The filing said it would close 10 locations in small markets. The affected operations will be rolled into other nearby service centers. This change of operations has to be approved by the Teamsters per the National Master Freight Agreement.

ArcBest (NASDAQ: ARCB) also said it is placing the MoLo Solutions, Panther Premium Logistics and ArcBest Technologies brands under the ArcBest banner. The company will retire the MoLo (truckload brokerage) and Panther (ground expedite services) brands.

It is also discontinuing the Vaux Freight Movement System, which configures loading plans for mobile platforms that are loaded onto trailers. It is instead focusing its Vaux operations on the autonomous product line.

The changes are expected to drive approximately $40 million in annualized cost savings (on $286 million in last 12 months’ adjusted EBITDA). However, the savings are not incremental, but will “support” the 2028 targets communicated at its investor day last September. The company said on its first-quarter call in April that training programs and various tech tools have already allowed it to significantly cut costs across its LTL network.

In aggregate, the restructuring plan is expected to result in cash charges of $6 million to $7 million (mostly severance and benefits payments), and noncash impairment charges of $76.5 million (Panther and Vaux writeoffs). ArcBest also disclosed a separate $8.8 million noncash impairment tied to subleasing an asset-light office.

“Bringing MoLo and Panther capabilities together under one ArcBest brand better unifies us as one team for a more coordinated experience across our solutions,” said ArcBest President and CEO Seth Runser in a news release. … “At the same time, streamlining our organization and operating footprint improves efficiency, strengthens profitability and positions us to grow without compromising the service our customers rely on.”

ArcBest raised second-quarter guidance in early June when it provided results for May. 

Asset-based margin performance is now expected to be 200 basis points better than its initial guide. The unit’s operating ratio (inverse of operating margin) is expected to improve by 600 to 700 bps sequentially in the second quarter, implying a 90.8% adjusted OR (200 bps better year over year).

(The unit normally sees 350 bps of sequential margin improvement from the first to the second quarter.)

ArcBest’s asset-light segment, which includes truck brokerage, is now forecast to record adjusted operating income of $3 million to $5 million in the second quarter. The updated guidance was $2 million higher at each end of the range.

More FreightWaves articles by Todd Maiden:

DHS, DOT partner to investigate 75 CDL training schools suspected of fraud

The U.S. Department of Homeland Security announced Thursday that it will partner with the U.S. Department of Transportation to investigate fraudulent and illegal practices in commercial driver’s license schools. Homeland Security Investigations will work with the Federal Motor Carrier Safety Administration. The agencies said HSI and FMCSA will identify and address fraud involving the issuance of non-domiciled commercial driver’s licenses to illegal aliens. State and local partners will also participate in the effort.

According to the announcement, the agencies will preserve the integrity of the commercial driver’s license system while maintaining high training standards and preventing fraud. DHS said those efforts will help ensure only qualified individuals operate commercial vehicles. The partnership supports the agencies’ commercial driver’s license enforcement efforts.

FMCSA identifies approximately 75 schools

FMCSA has identified approximately 75 entry-level driver training schools suspected of fraudulent activities, according to the announcement. DHS said investigators suspect some schools used improper driver certifications. The announcement also alleged some schools falsified training records. DHS said some schools failed to properly train drivers applying for commercial driver’s licenses, along with other violations.

HSI agents investigating CDL schools (picture DHS)

The Federal Motor Carrier Safety Administration’s Training Provider Registry lists providers authorized to offer federally required Entry-Level Driver Training for commercial driver’s license students. FMCSA said it uses the registry to identify and remove noncompliant training providers.

DOT will engage Homeland Security Investigations in cases involving the schools. HSI will work alongside FMCSA throughout the effort. The agencies announced the partnership Thursday.

Officials outline enforcement efforts

“Too many American lives have been lost in completely avoidable accidents because illegal aliens have been granted commercial driver’s licenses to drive trucks and 18-wheelers on America’s roadways,” DHS Secretary Markwayne Mullin said. “DHS law enforcement is partnering with the Department of Transportation to eliminate CDL fraud, strengthen the integrity of the CDL system, and investigate commercial driver’s license schools throughout the country. This is a whole-of-government approach, to keep America’s roads safe.”

Transportation Secretary Sean P. Duffy said DOT removed more than 24,000 drivers after they failed English-language requirements. He also said states canceled more than 28,000 commercial driver’s licenses illegally issued to foreign drivers and removed more than 9,500 unqualified training schools from FMCSA’s registry. “DHS will be a force multiplier of our efforts to clean up America’s roads,” Duffy said.

DHS said the partnership is part of the administration’s ongoing efforts to root out fraud from American trucking. The announcement said the effort will restore integrity to the industry.

OOIDA calls for stronger oversight

The Owner-Operator Independent Drivers Association called the investigation consistent with concerns it has raised for years. OOIDA Director of Legislative Affairs Bryce Mongeon told FreightWaves the Entry-Level Driver Training system lacks meaningful oversight and enforcement. “Unfortunately, today’s investigation doesn’t come as a surprise,” Mongeon said. “For years, OOIDA has warned Congress and FMCSA that the Entry-Level Driver Training system has lacked meaningful oversight and enforcement.”

Mongeon said OOIDA supports regular audits and inspections instead of self-certification. He also called for faster removal of fraudulent schools from FMCSA’s Training Provider Registry. OOIDA also supports a minimum of 30 hours of behind-the-wheel training. Mongeon said those measures would strengthen oversight of entry-level driver training.

FreightWaves requested additional information from the Department of Homeland Security, the Department of Transportation and the Federal Motor Carrier Safety Administration. FreightWaves also requested comment from the American Trucking Associations and the Commercial Vehicle Training Association. This story will be updated as additional information becomes available.

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Plastic-bag manufacturer settles allegations of customs fraud for $7.3M

New York-based RediBagUSA and CEO Jeffrey Rabiea have agreed to pay $7.3 million to settle a customs fraud investigation into whether the company misrepresented the country of origin on imported plastic retail and grocery checkout bags to avoid antidumping duties, according to the U.S. Department of Justice.

The settlement resolves allegations that RediBag USA, legally registered as New York Packaging II LLC, knew that plastic bags imported and distributed to customers across the United States were manufactured in China and transshipped through Hong Kong. Redi-Bag said on customs entry forms that the country of origin was Hong Kong, enabling it to evade a 77.5% duty assessed by the Commerce Department on bags being sold below market prices.

“Companies that benefit from access to U.S. markets must follow U.S. law, including by paying import duties that protect American manufacturers and workers from unfair foreign competition,” said Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division, on Wednesday in a news release. “The Justice Department will hold accountable those who evade duties owed to the United States.”

RediBag offers reusable and single-use grocery and retail bags, liners and other industrial packaging. 

The U.S. Attorney for the District of New Jersey alleged that RediBag and Rabiea concealed the bags’ true country of origin by hiding information from others, including the company’s customs broker and U.S. Customs and Border Protection, by directing employees to cover up “Made in China” markings, directing the manufacturer to remove “Made in China” markings and canceling orders after learning they would be inspected by customs authorities.

The settlement resolves a civil lawsuit filed by John Maierhoffer, a former contracted sales representative for RediBag, under whistleblower provisions of the False Claims Act. As part of the resolution, Maierhoffer will receive more than $1.3 million of the settlement proceeds.

Last year, the Department of Justice under President Donald Trump launched a Trade Fraud Task Force to enhance enforcement of rules designed to protect government revenues, economic and national security, and consumers.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Prologis sees demand bump for logistics warehouses

a forklift moving racks outside of a warehouse

Logistics warehouse operator Prologis said it continues to take market share and outpace the broader market in key metrics. The real estate investment trust’s second quarter was better than expected as it inked a record number of leases. An improving rental market pushed the company to raise its full-year outlook.

Prologis (NYSE: PLD) reported second-quarter consolidated revenue of $2.43 billion, which was 11% higher year over year and better than the $2.16 billion consensus estimate. Core funds from operations (FFO) of $1.63 per share were 17 cents higher y/y and 8 cents better than analysts’ forecasts.

Second-quarter lease signings for 67 million square feet of space marked a fresh high for the fourth time in the past seven quarters. Leases commenced in the quarter totaled 61.7 million square feet, up 21% y/y.

Average occupancy of 95% was 10 basis points higher y/y but 30 bps lower sequentially. Occupancy ended the quarter at 95.5%.

Table: Prologis’ key performance indicators

Net effective rent change on Prologis’ portfolio of multiyear leases was 36.9% in the quarter, near the company’s full-year goal of 40%. The change drove $16 million in incremental net operating income.

Lease mark-to-market (resetting in-place rents to current market rents) was estimated at 17%, or $800 million in future net operating income.

Management said net absorption—leased space less the amount of space vacated—was 66 million square feet in the U.S. during the quarter, the highest since 2022. The Prologis portfolio outperformed the U.S. market, which carried a 7.2% vacancy rate in the period.

Prologis is forecasting total net absorption to equal 220 million square feet this year (includes 195 million square feet of completions). That should allow market-wide occupancy to improve 30 bps. It said U.S. rents increased 70 bps during the quarter, but it expects rent growth to outpace inflation in tight markets like Texas, the Southeast, the Midwest and the San Francisco Bay Area.

Core FFO is now forecast to a range of $6.22 to $6.30 per share, a 2% increase at the midpoint. The guide assumes average occupancy of 95.25% to 95.75% (25 bps higher on the low end of the range) and development starts between $4.5 billion and $5.5 billion (a $1-billion increase at both ends of the range). Development projects also include new data center construction, but the increased outlook is largely due to higher demand for logistics properties.

Development starts totaled $1.6 billion in the second quarter, with half of the activity tied to logistics properties.

Prologis didn’t comment on its £12.6 billion ($16.6 billion) takeover bid for Segro. The London-based logistics warehouse operator turned down the offer last month.

Shares of PLD were up 3.2% at 2:08 p.m. EDT on Thursday compared to the S&P 500, which was down 0.5%.

More FreightWaves articles by Todd Maiden:

Postal operators struggle to break even despite parcel growth

A green Posten Bring van travels on a two-lane highway.

Postal operators worldwide saw modest revenue growth in 2025, with average revenue rising by 1.4%, mostly driven by parcel business, according to preliminary results published on Thursday by the International Post Corp.

Letter mail has continued to decline in all markets worldwide. Over the past three years, postal operators’ revenue growth has come almost entirely from parcels rather than mail. Profitability remained under pressure as fuel and labor costs squeezed margins, offset by parcel revenue from e-commerce and cross-border delivery. Despite higher parcel traffic, margins in this category remain narrow or negative, the IPC, a service provider to the postal sector, said.

Postal revenue growth slowed last year from 2.2% in 2024 and 1.5% in 2023.

“E-commerce continues to drive demand, but volume growth no longer guarantees profit, given the high competition and low margins. Posts are pursuing their transformation to increase competitiveness in delivery markets. Furthermore, global cooperation is more essential than ever for posts to respond to increasing regulatory pressure,” said IPC Chief Executive Officer Holger Winklbauer, in a news release.

E-commerce remains the sector’s main growth driver, with online retail and cross-border shopping increasing parcel flows. In Asia-Pacific, parcel growth is further supported by urbanization and a growing middle class. 

The financial squeeze on postal operators has continued in 2026, based on financial reports from operators. 

Posten Bring, the state-owned postal logistics provider in Norway, on Wednesday said revenue in the first half of 2026 increased 0.9% compared to the same period last year, while adjusted operating profit fell 19.1% to $40.3 million. Posten Bring, which handles mail and parcel delivery across the Nordic region, said making a profit is proving difficult because of rising costs and price pressure from intense competition even as parcel volumes continue to grow. Mail volume decreased 9.4% in the first six months, resulting in a 2% decline in mail revenue.

Parcel growth is strongest in Sweden, Posten Bring said. It plans to open a new parcel terminal outside Stockholm next summer that will triple its current capacity in the country. 

The IPC said the introduction of additional regulatory and customs obligations in the United States and Europe during the past 12 months may lead to a slow-down of cross-border e-commerce and a reduction of overall volumes. It urged governments to make sure new rules are easily implemented in order to maintain parcel flows and help postal operators retain business. 

Digitalisation continues to reduce mail demand, pushing postal operators to diversify into government, financial and logistics services to offset lost mail revenue. At the same time, rising labor and fuel costs are accelerating investment in automation and network optimization.

U.S. Postal Service mail volume, for example, has dropped by more than half since its peak in 2000, while the number of addresses requiring service grows by 1 million annually and the workforce is about the same size as in the 1970s. The agency says it could run out of cash in five years if Congress doesn’t make structural changes that give it more flexibility to run like a private business. Postmaster General David Steiner is raising postage and parcel rates, soliciting large shippers to use the Postal Service for last-mile delivery of bulk e-commerce shipments and streamlining the delivery network to improve efficiency and service. 

Regulatory changes, particularly for emissions and electric vehicles, are also requiring operators to modernize fleets and infrastructure.

Regulators are easing long-standing mail-delivery requirements and adjusting service standards to help operators sustain a profitable universal service, by reducing the number of delivery days or for instance by converting door-to-door addresses to community mailboxes. Canada Post, for example, is in the process of ending front-door delivery to millions of homes and switching residents to community mailboxes to reduce service costs.

For its part, Posten Bring during the second half plans to implement cost-reduction measures and a restructuring that will allow a more aggressive focus on its parcel, freight and warehouse businesses. About 80% of the postal operator’s revenue currently comes from logistics operations, a complete reversal from the turn of the century. Next year, the group expects to reduce indirect costs by 25% compared to the 2025 level.

The IPC said it will publish the complete 2025 industry results in November.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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FreightWaves Announces 2026 AI Excellence in Supply Chain Awards Winners

FreightWaves 2026 AI Excellence in Supply Chain Awards promotional graphic featuring the FreightWaves logo, a yellow neural network and cube icon, and the text "Celebrating the companies building intelligent supply chains"

CHICAGO — FreightWaves unveiled the winners of its 2026 AI Excellence in Supply Chain Awards during a ceremony at the Old Post Office in Chicago as part of the FreightWaves Supply Chain AI Symposium on July 15, 2026. The awards recognize companies using artificial intelligence to transform supply chain, transportation and logistics operations.

The competition this year was fierce. FreightWaves received a record 60 nominations, more than double last year’s total, reflecting how quickly AI has moved from pilot projects to production systems across the industry. To capture the full picture of that shift, the 2026 awards were split into two categories: AI Solution Providers, honoring the technology companies building AI tools for the industry, and Operational AI Integration, honoring the carriers, brokers, forwarders and shippers deploying AI inside their own operations.

This year’s honorees in the AI Solution Providers category are Arkestro, CloneOps.ai, Intelligent Audit, Fixefy, Augment, Eranova, Gather AI, Trimble Autonomous Procurement, Fullbay AI and Samsara. The Operational AI Integration honorees are NFI, Flexport, YMX Logistics, Uber Freight and Atlas Energy Solutions.

AI Solution Providers

Honoring the technology companies building AI tools for the industry

Arkestro earned recognition for its AI-enabled predictive procurement platform, which combines artificial intelligence and game theory to let procurement teams simulate sourcing events before they happen and shape outcomes before suppliers ever submit a quote. Rather than replacing human decision-making, the platform augments it, giving suppliers AI-assisted pricing guidance and real-time feedback on how their offers compare. Customers report an average 18.8% savings on spend and sourcing cycles accelerated by up to 60%. One manufacturer identified more than $55 million in savings with a two-month ROI across 40 plants and more than 400 suppliers; an LNG operator cut high-value sourcing cycles from days to minutes while achieving 29% savings; and a global medical device manufacturer compressed logistics request-for-quote timelines from four months to six weeks, saving $2.4 million.

CloneOps.ai, a repeat honoree after winning in the awards’ inaugural year, was recognized for building what it calls an AI operating system for logistics. The platform runs on three connected layers: an AI infrastructure layer providing data stores, connectors and governance; an orchestration layer called ORQIA that turns operational intent into workflow execution; and an agent workforce covering track-and-trace, customer service, dispatch, carrier onboarding, scheduling, collections and fraud prevention. Rather than replacing the transportation management system, CloneOps.ai extends it from a system of record into a system where work actually gets done. ROI modeling across its agent portfolio shows the potential to eliminate more than 133 human hours per 1,000 calls, with representative workflows delivering up to 550% ROI compared with U.S.-based labor.

Intelligent Audit was honored for DeepDetectAI, which applies proprietary machine learning to parcel and freight shipping data to catch cost anomalies, operational errors and potential fraud before they hit the bottom line. The system analyzes a shipper’s full history to learn what normal looks like for that specific business, then monitors new activity in real time for unexpected cost spikes, duplicate charges, unusual service usage and potentially fraudulent shipments, with explainable data behind every flag. Customers have seen immediate recoveries reaching six figures from a single recurring issue and total cost avoidance in the millions.

Fixefy received the award for an AI platform that redefines global freight auditing through autonomous financial control. Fixefy ingests any data type from any source, structured or unstructured, including PDFs, images, emails and chats, to reconstruct what it calls the true story of a shipment, then validates every charge against the customer’s contracts, rates and standard operating procedures. Its agentic AI does not stop at detection: It autonomously files disputes with carriers and tracks them until credits are issued. The platform is modality-agnostic across air, ground, ocean, rail, courier and third-party logistics spend, and it recovers 5% to 12% of total outsourced supply chain and freight expenditures with 100% audit coverage for enterprises including BASF.

Augment was celebrated for Augie, an industry-native AI teammate that works across phone, email, portals and enterprise systems to automate operations from quote to cash. Augie reads, writes, calls, listens and acts, running workflows modeled on a customer’s own standard operating procedures and accumulating institutional knowledge as it goes, all without requiring teams to change how they work. The results are landing with major operators: Penske Logistics is using Augie to validate the status of an estimated 600,000 loads and anticipates productivity gains of 30% to 40%; Transportation One projected seven figures in annualized cost savings; and Hirschbach is now using Augie to handle proactive outreach on more than 85% of its Logistics Solutions loads. Across activated shippers, Augie builds 90% of loads automatically and has cut time-to-proof-of-delivery collection by more than half.

Eranova earned recognition for attacking logistics’ most expensive blind spot: the operational data that never reaches the transportation management system. Every load generates a stream of emails, rate confirmations, bills of lading, proofs of delivery and portal updates that operators key in by hand. Eranova connects directly to shared inboxes and communication channels, captures and classifies every message and document, matches it to the correct shipment, and feeds it into a shipment knowledge graph that powers specialized agents across quote intake, carrier tendering, tracking, proof-of-delivery collection, document reconciliation, invoice audit and cash application. The platform handles more than 20 million shipment events annually across more than 50 logistics service providers, capturing 92% of offline shipment data automatically, cutting quote turnaround time 78% and accelerating load closeout to cash fourfold.

Gather AI was honored for bringing physical AI to the warehouse floor, turning facilities into live, actionable data through a software-first, hardware-agnostic platform built on Carnegie Mellon robotics research led by CEO and co-founder Sankalp Arora. Its See, Think, Act model uses computer vision to read more than 10 data points from each image across drones, material-handling equipment and off-the-shelf devices, reasons over that ground truth against existing business systems, and routes the right action to the right person, all without GPS, Wi-Fi or infrastructure changes. The platform delivers 99.9% inventory accuracy and ROI in as little as six months. GEODIS cut manual counting from 4,400 hours a year to 800; NFI reports five times operational productivity; and Langham Logistics reduced pallet emergencies from 20 to 30 per day to one or two.

Trimble Autonomous Procurement took home honors for automating the end-to-end process of securing spot road freight capacity. Planners publish a shipment and set guardrails such as reserve and walk-away prices, and the system continuously makes and adapts targeted offers to pre-qualified carriers using machine learning, behavioral science, historical shipment data, lane patterns and live engagement signals to decide which carrier gets which offer, at what price, and how it should adapt as the market responds. Carriers can describe the loads they want in plain language and move to AI-generated Buy-It-Now offers. The solution reduces rates 7% to 12% compared with freight auctions, enables an 80% no-touch process, secures capacity within an hour with a 90% success rate, and helped Pfeifer Group reach an 84% automation rate.

Fullbay AI was recognized for applying AI across the full commercial repair and fleet maintenance lifecycle, on both the shop floor and the fleet side. Voice-activated notes and AI-powered copy refinement embed directly into the service order workflow, cutting administrative work and producing cleaner records in real time, while Fullbay subsidiary Pitstop uses AI agents and live sensor data to predict maintenance issues before they happen at 95.5% accuracy. Early customer feedback shows roughly a 20% reduction in paperwork time, and on the fleet side the City of Long Beach saves more than $800,000 annually using Pitstop’s predictive AI, Food Express cut downtime by 25%, and Summit Materials saves $2,000 per vehicle per year.

Samsara earned accolades for the Samsara Tracking Label and Shipment Center, a smart single-use Bluetooth label that gives shippers near-real-time visibility into mission-critical shipments across any carrier. AI models turn raw Bluetooth location signals into operational intelligence, continuously analyzing position and progress against expected routes to flag weather delays or unplanned diversions before a shipment goes missing. Missing or diverted cargo can now be located in an average of one minute, down from a resolution process that historically took days. 

Operational AI Integration

Honoring the supply chain operators deploying innovative use cases of AI inside their own operations.

NFI was recognized for applying AI across its transportation management operation through a build-versus-buy framework prioritizing speed, ROI and customer value. The company replaced manual tracking workflows with agentic AI so associates can focus on exception management, automated email triage and freight bill exception matching in the back office, and built a Digital Twin tool that lets customers dynamically scenario-plan against their own data. NFI has reclaimed more than 100 hours per week in back-office operations, saved the equivalent of four full-time employees in load tracking, cut training time by 20%, and made automated appointment scheduling 75% faster. Its Digital Twin uncovers transportation savings averaging 5% to 10% per customer, with one client realizing more than $600,000 in annual savings.

Flexport was honored for deploying AI not as a product it sells but as the engine of its own operations across ocean, air, customs and fulfillment, launching more than 55 AI and technology products in the past year while moving goods for thousands of brands across more than 135 countries. The approach rests on a unified data spine, an ontology through Flexport Atlas that maps how every entity relates from purchase order to container to customs entry, and automation across the end-to-end supply chain. Customers save up to 10% on ocean freight costs through AI container and route optimization; its customs and duty drawback technology has recovered more than $1 billion in refunds and tariff savings over five years while filing with 99.8% accuracy; and automation has eliminated up to 80% of emails and roughly 20 manual tasks per shipment. One customer grew shipments sixfold with no new headcount.

YMX Logistics took home honors for its Autonomous Yard Operating System, which applies AI to one of the most under-optimized parts of the supply chain: the yard, where transportation, warehousing, trailers, drivers, gates, docks, labor, safety, inventory and EV charging all converge. YMX is explicit that autonomous does not mean replacing people or deploying autonomous trucks. It means using simulation, machine learning, predictive analytics, computer vision and AI cameras to sense yard conditions, forecast demand, recommend decisions and orchestrate workflows, evaluating alternatives before physical changes are made. A top five U.S. grocery distribution network cut its yard truck fleet from 22 to 14, roughly 36%, while improving throughput, safety and control, then expanded the model from one site to nine within six months.

Uber Freight was awarded for DocAI, which automates one of logistics’ most stubbornly manual layers: freight paperwork. Embedded directly into Uber Freight’s brokerage and financial systems, DocAI uses computer vision, OCR and large language models to read, classify, validate and route bills of lading, proofs of delivery, lumper receipts and invoices in real time, checking delivery details, identifying signatures and handwritten fields, and deciding whether a document can move forward automatically or needs human review. The system processes more than 20,000 proof-of-delivery documents per week at more than 99% precision in data extraction, has driven a 50% reduction in invoice disputes tied to document acceptance, and gives carriers instant notification of an unacceptable document, replacing what was previously a 12- to 24-hour delay.

Atlas Energy Solutions earned recognition for deploying one of the most demanding autonomous trucking operations in North America. Atlas is the leading supplier of frac sand in the Permian Basin, where every well requires thousands of tons of refined sand delivered on time across remote desert roads that are often unpaved and unmarked, in a region with one of the highest driving fatality rates in the country and conditions that make attracting and retaining drivers persistently difficult. After extensive field trials, Atlas deployed 28 AI-enabled autonomous trucks running Kodiak AI’s Kodiak Driver, which combines vehicle-agnostic hardware with a proprietary foundation model that ingests camera, radar and lidar data to navigate an environment with few of the lane markings most autonomous systems rely on. The fleet logged more than 23,500 hours on lease roads in the first quarter of 2026, a 110% jump from 10,700 hours in the fourth quarter of 2025, and has delivered more than 15,000 loads and an estimated 450,000 tons of frac sand. Atlas intends to expand the fleet by the end of 2026 and again in 2027.

Trump promise on military CDLs sounds similar to existing programs

Remarks Wednesday by President Trump about creating an easier pathway for veterans to become CDL holders sounds in its general description to be similar if not identical to an existing federal program that is approximately 15 years old.

At an event in Carlisle, Pennsylvania discussing investment in the military, the President, after criticizing illegal immigrant drivers, said of veterans that “we’re going to teach them a lot about driving trucks, and in many cases, they know we’re going to say any American who’s driven a heavy truck for our military will automatically be eligible for a commercial driver’s license, so we’re going to get them taken care of.”

While there could be changes or amendments, the reality is such a program exists already: the Military Skills Test Waiver Program, administered by the Federal Motor Carrier Safety Administration. Its origin dates back to 2011. 

Military experience gets big credits

Under the program, according to the webpage devoted to the program, there is a provision “that gives State Driver Licensing Agencies (SDLAs) the authority to substitute two years of experience safely operating trucks or buses equivalent to civilian commercial vehicles for the skills test portion of the commercial driver license (CDL) test.”

In the latest update on the program posted June 30, FMCSA said more than 40,000 military veterans have taken advantage of the program to obtain their CDL.

A military driver seeking to make the jump would need to have worked behind the wheel sometime in the prior 12 months to be eligible for the program.

Goes even further back

Lewie Pugh, the executive vice president of the Owner Operator Independent Drivers Association, said the ability to leverage military experience into a CDL goes back further than the 2011 program. Pugh should know: he got his CDL license through his military service in 1994.

“We still need to make sure that they’re getting some kind of training,” Pugh said in an interview with FreightWaves. “OOIDA is a big proponent of much stricter training and driving a truck in the military. I feel personally that the actions in driving a truck is that your motor skills learn that, but real world trucking is different than military world trucking.”

The FMCSA page on the program lists numerous other pathways for military personnel to obtain their CDL beyond the Military Skills Waiver Program.

  • Even Exchange Program: A waiver of the “knowledge test.” When used in conjunction with the Military Skills Waiver Test, it’s a straight pathway to a CDL.
  • Safe Driver Apprenticeship Pilot Program: For military drivers 18-20 who have an intrastate CDL, the program allows them to operate in interstate commerce.
  • Commercial Motor Vehicle Operator Safety Training Grant Program: Provides money to “educational institutions” to assist training former military members to move into the trucking sector.

Trump used the address to discuss the recent death of Pennsylvania State Trooper Michael Pahira. Pahira was on the side of the road inspecting a commercial vehicle in Schuykill County on interstate 81 when he was struck and killed by a truck driven by Michael Bon, whom the Department of Homeland Security described as an illegal alien from Haiti. 

Bon is in custody after being charged with vehicular homicide and involuntary manslaughter. 

“My administration will soon take historic action to get illegal alien truck drivers who are just killing a lot of people (off the road),” Trump said in his remarks, according to news coverage of the event. “They can’t read signs. Many of them are on drugs or alcohol and they shouldn’t be driving these things. And they’re, they came in totally illegally. We don’t want them.”

Among the steps taken by the Trump administration so far includes its new rules on non-domiciled CDL holders. The changes in that rule which went into effect in March, limits eligibility for a non-domiciled CDL holder to three categories of nonimmigrant status holders; the elimination of Employment Authorization Documents as a proof of eligibility; and a requirement that states query the Systematic Alien Verification for Entitlements (SAVE) system to determine immigration status.

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Woman in $150M counterfeit postage shipping scheme sentenced to prison

U.S. Postal Service sign on the side of a building.

A Los Angeles-area woman was sentenced last week to two years and six months in prison and fined by a federal court for using counterfeit postage to ship tens of millions of parcels from China, causing more than $150 million in losses to the U.S. Postal Service.

Lijuan “Angela” Chen, 53, pleaded guilty in April 2024 to conspiracy to defraud the United States and use of counterfeit postage. In addition to her prison sentence, she was ordered to pay more than $158 million in restitution.

According to her plea agreement, from at least November 2019 to May 2023, Chen and  co-defendant Chuanhua “Hugh” Hu owned and operated a package shipping business located in the City of Industry, helping China-based logistics companies ship packages through the U.S. mail system.

To avoid the cost of postage, Hu created false and counterfeit postage to ship packages by printing duplicate and counterfeit Netstamps – stamps that may be purchased online from third-party vendors and printed onto adhesive paper.

Prosecutors said that in November 2019, Hu, knowing that law enforcement was investigating his use of counterfeit postage, fled the United States and moved to China. There, he developed ways to make counterfeit postage and avoid detection, such as a computer program for fabricating counterfeit postage shipping labels. Chen remained in the United States and managed the warehouses that she and Hu used to ship mail bearing counterfeit postage.

Starting in 2020, Chen and Hu began affixing counterfeit postage to mail they presented to USPS for delivery. Chen and Hu received parcels from the China-based vendors and others, applied shipping labels showing postage purportedly paid and then arranged for the parcels to be transferred to USPS facilities to be shipped across the nation. The shipping labels were fraudulent and frequently included, among other red flags, “intelligent barcode data” recycled from previously mailed packages, according to court documents.  Intelligent barcode data is used in some postage shipping labels to evidence the payment of required postage for the shipped item.  

On Oct. 25, 2022, for example, Chen and Hu tendered a shipment to the USPS with about 4,780 packages for delivery to individual addresses. The shipment included multiple packages bearing counterfeit USPS Priority Mail postage meter stamps.

From January 2020 to May 2023, Chen and Hu mailed more than 34 million parcels containing counterfeit postage shipping labels, resulting in more than $150 million in lost revenue for the Postal Service.

Hu remains a fugitive in China. He was charged with conspiracy, forgery and counterfeiting postage stamps.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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