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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convenient time for a vacation, indeed

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

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

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

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

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

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

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

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

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

How a truck driver gets stopped for inspection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Time to start inspecting in the winter

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

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

FREIGHTWAVES: That makes sense.

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

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

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

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

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

Why the Northeast is quietly running out of diesel

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s a breakdown:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ‘everything shortage’ endures

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

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

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

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

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

Exclusive: Central Freight Lines to shut down after 96 years

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

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

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

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

Kalem agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Watch: Central Freight Lines’ impact on the LTL market

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

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

Central Freight Lines statement

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

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

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

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

Brief history of Central Freight Lines

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

Source: Central Freight Lines

Warehouse cramming is about to begin — Freightonomics

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

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

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

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

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

Seasonality pushing rejections and rates higher ahead of the Fourth

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

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

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

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

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

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

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

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

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

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

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

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

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

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

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

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

Tender rejections: Absolute level and momentum positive for carriers

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

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

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

SONAR: Capacity Trend Market Score (Carriers – VAN)

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

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

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

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

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

Freight rates: Absolute level and momentum positive for carriers

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

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

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

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

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

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

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

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

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

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

SONAR: IJC.USA

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

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

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

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

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

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

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

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

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

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

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

Project44 acquires ClearMetal to strengthen predictive tools

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

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

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

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

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

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

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

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

Click here for more articles by Grace Sharkey.

Project44 expands real-time visibility into China

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

‘Project44’s vision has always been global’

‘AI is the new UI’: Coupa customers race to automate supply chains

LAS VEGAS — Artificial intelligence, digital twins and autonomous supply chain workflows dominated Day 2 discussions at Coupa Inspire 2026 as executives from Coupa, GAF and Sonepar USA described how AI-driven tools are rapidly reshaping procurement, transportation and network optimization.

Coupa is a cloud-based, AI-native platform designed for total spend management and supply chain optimization. The company is headquartered in Foster City, California with offices throughout Europe, North America, Latin America and Asia.

The conference, held Monday through Wednesday at ARIA Resort & Casino in Las Vegas, brought together hundreds of procurement, finance and supply chain executives focused on spend management, sourcing and supply chain technology.

During the opening keynote on Tuesday, CEO Leagh Turner unveiled new AI-focused products, including the launch of Coupa Compose and Coupa Catalyst, while also announcing the acquisition of AI-based intelligent document processing company Rossum.

‘AI is the new UI’ for supply chain software

Dean Bain, Coupa’s general manager and senior vice president of supply chain, said companies are moving beyond simple generative AI chatbots toward “agentic AI” systems capable of automating operational tasks and making complex supply chain decisions.

“AI is the new UI,” Bain said during an interview Wednesday with FreightWaves. “As a software company, as an innovator in the space, if that’s not the direction we head, we will be behind.”

Coupa executives said the company has developed more than 20 AI agents and plans to expand that number significantly over the next year as it embeds automation directly into procurement and supply chain workflows.

Bain said Coupa’s AI “prescriptions” technology combines agentic AI with mathematical optimization to quickly evaluate transportation networks, warehouse capacity, supplier constraints and logistics scenarios.

“What we’re seeing is work that was taking four to six weeks is now being conducted in four to six hours,” Bain said.

Bain said digital twin technology is becoming increasingly important as manufacturers and retailers navigate tariffs, port congestion and geopolitical disruptions. Coupa’s digital twins create virtual representations of supply chains that allow companies to model sourcing shifts, transportation delays and inventory-balancing scenarios in real time.

“Tariffs is obviously a huge challenge for everyone right now,” Bain said. “Digital twins are allowing our customers to model those tariff scenarios.”

The systems also incorporate real-time news, social media and operational data feeds to evaluate potential disruptions across global trade networks, Bain said.

Sonepar redesigns fleet, delivery networks

A breakout session at Coupa Inspire 2026, led by Sundara Maddala, director of analytics at Sonepar USA, focused on how the electrical distributor is embedding transportation and logistics decisions directly into network design across its U.S. operations.

Sonepar USA operates roughly 600 facilities nationwide, including distribution centers and cross-docks, while relying heavily on private fleet operations to support tight delivery windows for construction customers.

Maddala detailed several optimization projects involving route redesigns, fleet right-sizing and hub-and-spoke distribution strategies following acquisitions in Florida and the Northeast. One project reduced the number of 26-foot box trucks from 68 to 43 while cutting weekly mileage and generating roughly $3.4 million in lease-cost savings, according to Maddala.

Another network redesign in U.S. Carolinas consolidated inventory into centralized distribution centers while improving delivery-service performance to as high as 95%-96%, Maddala said.

“There’s a big shift from how they operated to how they have to operate,” Maddala said. “Now the customer walks into the branch, places an order, and the branch manager has no say … He just has to trust that CDC will do all that work and then deliver it on time.”

Coupa, Celonis team up on AI-driven procurement

Coupa also announced Wednesday that it is collaborating with Celonis to integrate process intelligence tools into Coupa’s autonomous spend management platform. The companies said the integration will provide Coupa’s Navi AI agents with operational context designed to automate procurement workflows, reduce “value leakage” and improve spend visibility across enterprise systems.

The partnership allows customers to deploy Celonis Process Intelligence through the Coupa App Marketplace while combining Coupa’s spend-management data with Celonis’ operational analytics. The companies said the integration is aimed at reducing maverick buying, accelerating touchless invoicing and improving working capital management.

“AI Agents are only effective if they are fed the best data, intelligence and context,” Salvatore Lombardo, Coupa’s chief product and technology officer, said in a statement announcing the partnership.

Coupa honors partners for supply chain innovation

Coupa also recognized 16 partners during its Inspire 2026 Partner Summit for helping customers improve procurement operations and supply chain resilience. Awards included Global Partner of the Year for Accenture, Supply Chain Partner of the Year for Miebach Consulting and AI Partner of the Year for PwC.

“Our partners are the backbone of the Coupa community, helping our mutual customers drive margin growth and future-proof their operations,” Greg Harbor, Coupa’s chief partner officer, said in a statement.

The broker standard of care after Montgomery

The freight brokerage industry is entering a new era. Since the Supreme Court’s decision in Montgomery, my phone and email have been nonstop with brokers, shippers, insurers, and transportation attorneys all asking the same question: What is now considered the industry standard for vetting a carrier?

After spending years advising brokers, building carrier vetting technology, analyzing carrier risk data, and serving as an expert witness in negligent selection litigation, one thing has become increasingly clear: the industry is rapidly moving toward a measurable broker standard of care.

The question is no longer whether brokers have responsibilities when selecting carriers. The question is what courts, juries, insurers, and the industry itself will consider reasonable in a modern transportation environment where enormous amounts of safety data are publicly available. The reality is that most brokers are already doing a very good job.

Many of today’s sophisticated brokers have evolved far beyond simply checking FMCSA authority and insurance. They utilize carrier onboarding teams, continuous monitoring platforms, insurance verification tools, inspection analysis, fraud prevention controls, and internal escalation procedures that did not exist at scale even a decade ago.

In my work reviewing broker operations and carrier selection practices across the industry, I regularly see brokers implementing meaningful and defensible vetting procedures that demonstrate just how much the industry has matured.

But there remains a very small segment of the market still operating under an outdated philosophy: if the carrier has active FMCSA authority and insurance, the load can move. That approach is out of date and difficult to defend.

One of the biggest misconceptions in transportation litigation is the belief that FMCSA authority somehow represents a government safety endorsement. It does not. Operating authority simply means a carrier is authorized to operate in interstate commerce. It does not mean the carrier has acceptable inspection history, strong safety management controls, reasonable out of service percentages, or a satisfactory operational profile.

Yet in negligent selection cases across the country, a handful of brokers still defend claims by arguing they relied primarily on authority status without meaningfully evaluating available DOT safety data. That becomes problematic when publicly available information reveals warning signs that were either ignored or never reviewed at all.

Today, brokers have access to unprecedented amounts of operational and safety information through FMCSA databases, CSA scores, inspection histories, crash indicators, insurance monitoring systems, and third party risk platforms. Plaintiffs’ attorneys know this. Courts know this. Insurers know this. And increasingly, juries understand it as well.

In expert witness work involving catastrophic crashes, a recurring issue emerges repeatedly: many brokers already conduct sophisticated safety analysis before tendering freight. They review inspection history. They monitor unsafe driving indicators. They analyze out of service percentages. They examine crash trends. They implement fraud prevention controls. They continuously monitor carrier status changes and document exceptions. Those practices matter because they establish what is operationally realistic and commercially achievable within the brokerage industry today.

In other words, the standard is no longer theoretical. When large portions of the industry are already implementing meaningful carrier vetting controls, it becomes increasingly difficult for another broker to argue that reviewing publicly available safety data is unreasonable or impractical. This is how standards of care evolve in every industry. What begins as a best practice gradually becomes an expected practice. Eventually, expected practice becomes the benchmark against which negligence is measured.

Transportation brokerage is now moving through that transition. Importantly, reasonable vetting does not require perfection. No broker can eliminate every transportation risk. No vetting system can predict every crash. The issue is not whether a broker failed to foresee an accident with perfect accuracy. The issue is whether the broker exercised reasonable judgment using the safety information already available to them. There is a substantial difference between evaluating operational risk, documenting a decision, and exercising professional judgment versus simply verifying authority and dispatching freight without further analysis. That distinction increasingly defines modern negligent selection litigation.

Another major shift occurring in transportation litigation is the sophistication of modern juries. Jurors today live in a data driven world. They understand risk scoring, analytics, monitoring systems, and operational oversight in virtually every aspect of life. When plaintiffs’ attorneys present evidence showing publicly available warning signs that were ignored during carrier selection, jurors increasingly understand the significance of that omission. The defense argument that “the carrier had authority” can sound incomplete when contrasted against extensive safety indicators suggesting deeper operational concerns.

Insurers are paying attention as well. Underwriters and excess carriers increasingly recognize that broker vetting practices directly impact litigation exposure and claim severity. Brokers with documented vetting procedures, continuous monitoring protocols, fraud prevention controls, and formalized safety review processes are often in a far stronger position during both underwriting and litigation. This trend will only continue.

The future of broker liability will center on documentation, consistency, measurable safety analysis, and defensible operational decision making. The industry already possesses the tools. The data already exists. And most brokers are already adapting appropriately.

The brokers who continue relying solely on FMCSA authority while ignoring available DOT safety data may eventually find themselves defending practices that much of the industry abandoned years ago. That is ultimately where the broker standard of care conversation is heading. Not toward impossible perfection. But toward reasonable, measurable, and defensible carrier selection practices grounded in the operational realities of modern transportation safety data.

Cassandra Gaines is the founder and CEO of Carrier Assure and a nationally recognized transportation attorney and expert witness specializing in broker liability, carrier vetting, and transportation risk management. She advises brokers, shippers, insurers, and law firms on negligent selection exposure, FMCSA safety data, cargo theft prevention, and defensible carrier selection practices. Gaines previously held legal and leadership roles at large brokerages and trucking companies and has become a leading voice on transportation safety analytics and broker standard of care issues. She has spoken at more than 100 industry conferences nationwide and was named one of Business Insider’s “100 People Transforming Business in North America.” Cassandra can be reached at cassandra@carrierassure.com.

The U.S. Navy wants to build 15 nuclear-powered battleships

The Navy outlined a 30-year plan to order 15 battleships from domestic shipyards by 2055, and more than 80 robot vessels within the next five years.

In the plan released this week, the Navy envisions a 450-ship fleet by 2031, including 299 warships, 68 auxiliary ships, and 83 unmanned vessels.

The larger, more capable fleet would project more global power, Acting Navy Secretary Hung Cao said in the plan.

Three of 15 new “Trump-class” nuclear-powered battleships are to be ordered within the next five years, at an estimated cost of approximately $43.5 billion.

The plan would distribute orders across multiple domestic builders and extend to foreign shipyards. The U.S. and South Korea this week agreed to a formal shipbuilding partnership.

Read more articles by Stuart Chirls here.

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The carrier vetting tech stack is the new line of defense in freight

Montgomery v. Caribe Transport is a day old and the freight industry is still processing it. Nine to zero. Unanimous. Brokers can be sued for negligent carrier selection. The FAAAA preemption shield is gone. I covered the opinion the day it came down and I have written about the insurance gap, the nuclear verdict landscape, and the history of broker liability that the industry conveniently forgot about. All of that matters.

The practical question that every broker, shipper, and 3PL should be asking right now is not a legal question. It is an operational one. How do you build a carrier selection process that meets the standard of ordinary care, and how do you prove to a jury three years from now that you followed it?

The answer is technology. Not in the abstract. Not as a concept. As a procurement decision, you need to make this month.

Before Montgomery, carrier selection was a business decision. You picked a carrier based on rate, availability, equipment, lane familiarity, and whatever level of due diligence your operation felt like performing. Some brokers checked SAFER. Some checked SMS scores. Some checked nothing at all and booked the cheapest truck. The FAAAA preemption defense meant that even if you put a load on a carrier with a conditional safety rating and a driver who had not slept in 20 hours, a plaintiff’s attorney in most jurisdictions could not touch you. The federal shield blocked the claim before it ever reached a jury.

That shield is gone. Every carrier selection decision you make from this point forward is a potential exhibit in a future lawsuit. The carrier you chose, the data that was available about that carrier at the time you chose them, the process you used to evaluate that data, and whether you followed your own criteria. All of it is discoverable. All of it is admissible. All of it will be presented to twelve people who do not know the difference between a BASIC score and a batting average but who do understand the concept of someone not doing their job.

The legal standard is ordinary care. That is not a high bar in the abstract. It is a devastating bar when you have no documentation, no process, and no technology to support the claim that you exercised it.

Every piece of data a broker needs to vet a carrier is publicly available. SAFER gives you authority status, census data, and safety ratings. SMS gives you BASIC percentile scores, crash rates, and inspection history. The Licensing and Insurance system gives you insurance filing status, the insurer’s identity, and coverage amounts. The Drug and Alcohol Clearinghouse tracks driver substance abuse violations. All of it is free. All of it is accessible to anyone with an internet connection.

The problem is not access. The problem is operationalizing it.

A broker handling 50 loads a day cannot manually check six federal databases for every carrier on every load and document every finding in a timestamped record with a reviewer’s name attached. That is not a workflow. That is a fantasy. The data exists but the manual process of gathering it, interpreting it, applying consistent criteria, making a documented decision, and retaining the record at scale does not work without technology.

That is where carrier intelligence and vetting platforms come into play. And this is no longer a nice-to-have conversation. This is a procurement decision with direct litigation implications.

The carrier vetting technology space has matured significantly over the past several years and the platforms available today take meaningfully different approaches to the same fundamental problem. There is no single tool that does everything. There are several tools that do specific things well, and the right answer for any given operation depends on what you need, who you are, and how your carrier selection process is structured.

Tea Technologies provides a carrier scoring engine that generates a 0-to-100 numeric risk score built from crashes, out-of-service rates, BASIC percentiles, violation history, revocation history, authority age, and insurer quality. The platform is designed for brokers, shippers, insurers, and investigators who need a single defensible number that summarizes carrier risk and a documented audit trail showing how that number was derived. The scoring methodology is distinct from other platforms in the space and incorporates insurer intelligence as a risk factor, which matters because the quality of the insurance company backing a carrier’s policy is a material consideration that most vetting tools ignore.

SearchCarriers takes a different approach. Garrett Allen built the platform to aggregate nearly 30 FMCSA data sets into a single searchable index and present them in plain language. SearchCarriers is strong on entity discovery, mapping ownership structures, parent-subsidiary relationships, and historical connections between carriers. That capability is critical for identifying chameleon carriers that operate under new DOT numbers after enforcement action. Their Watch feature sends inspection alerts within hours, sometimes days before that data appears on government sites. Their Search Map visualizes carrier density. SearchCarriers is built with all users in mind, particularly small carriers who may be underrepresented in scoring systems that rely on large statistical samples.

Steve Bryan is the goat of FMCSA data aggregators. The pioneer of this tool. Bluewire approaches the problem from the litigation defense perspective. Steve Bryan built the platform to score severity risk for over 750,000 motor carriers using a GAP Score that evaluates nine critical severity categories. Bluewire’s reports run over 100 pages and benchmark carriers against industry peers across more than 30 KPIs. The platform is tailored for carriers, defense attorneys, and insurers who need to identify the specific vulnerabilities that plaintiff’s counsel will exploit under the reptile theory before a crash happens, not after. Bluewire does not just tell you whether a carrier is safe. It tells you what a plaintiff’s attorney will say about them in front of a jury.

Highway focuses on the carrier identity and authentication layer. Their platform verifies that the carrier on the other end of the transaction is who they claim to be, that their credentials are valid, and that their insurance is active. In an environment where double-brokering, identity theft, and carrier impersonation are epidemic, the authentication problem is a vetting problem. You cannot evaluate a carrier’s safety record if you are not actually dealing with that carrier.

Carrier411 is one of the longest-running carrier monitoring and screening platforms in the freight industry. The platform provides carrier safety profiles, authority monitoring, insurance tracking, and a watchlist system that alerts subscribers to changes in a carrier’s status. Carrier411 has built a large user base among brokers and 3PLs over many years and their monitoring tools provide ongoing surveillance of carrier safety data rather than just point-in-time vetting. In a post-Montgomery environment where ongoing monitoring of existing carrier relationships is just as important as initial vetting, a platform that alerts you when a carrier’s safety profile deteriorates between loads is a meaningful layer of due diligence.

GenLogs is doing something nobody else in this space is doing. Ryan Joyce, who came out of the CIA, built a Truck Intelligence platform that uses a nationwide network of over 1,000 roadside sensors and cameras, processing 15 million truck images per day to visually verify that carriers are actually on the road. Every other platform in this space works from digital records. FMCSA filings, insurance databases, and inspection histories. GenLogs works from the physical world. Has the carrier actually been seen operating on the highway recently? Are the trucks displaying the markings that match their registration? Is the equipment consistent across sightings, or are you seeing plate swaps, logo changes, and ghost trucks that appear in the database but never on a sensor? That is a data source that no federal filing can replicate. GenLogs closed a $60 million Series B in February 2026, bringing total funding to $81 million, and serves Fortune 500 customers, including J.B. Hunt and Werner. As they continue building out the sensor network, the platform is becoming a richer, more comprehensive data tool each month. For the carrier vetting use case specifically, GenLogs answers a question that no other platform can: is this carrier real, and are they actually running trucks? In a post-Montgomery environment, where a broker needs to demonstrate that the carrier they selected is a legitimate, operating transportation company, physical verification is a powerful layer of due diligence that digital-only tools cannot provide.

These platforms differ significantly in tenure, methodology, target audience, scope, and pricing. Some are built primarily for brokers. Some are built primarily for carriers and their defense teams. Some focus on raw data transparency, letting you make the decision. Some focus on scoring and risk quantification and give you a number. Some focus on fraud prevention and identity verification. The differences matter and they are worth evaluating based on your specific operation.

The bottom line is this: carrier vetting technology is now a must-have. Not a differentiator. Not a competitive advantage. A baseline requirement for operating in the post-Montgomery legal environment.

Technology alone does not meet the standard of ordinary care. A platform subscription is not a compliance program. What meets the standard is a written policy that defines your vetting criteria, consistent application of that policy to every carrier on every load, and documented evidence that the criteria were applied. Technology is the tool that makes all three of those things possible at scale.

Here is what a defensible carrier vetting program looks like. You have a written policy that says: these are our minimum eligibility requirements, these are our disqualifying conditions, these are the data sources we consult, this is who is responsible for the vetting, this is how we document the decision, and this is how long we retain the records. Then you use a carrier intelligence platform to execute that policy on every load. The platform generates the data. Your policy defines the criteria. Your people apply the criteria. The system timestamps the record.

When plaintiff’s counsel deposes your compliance manager three years after a crash and asks what your carrier vetting process was, you hand them the policy document and three years of timestamped vetting records showing that the policy was applied to every carrier you engaged, including the one involved in the incident. If the carrier met your criteria at the time of tender and the documentation proves it, you have a defensible position. If the carrier did not meet your criteria and you tendered the load anyway without a documented risk acceptance and justification, you have a problem. If you had no criteria, no documentation, and no technology to generate either, you have a catastrophe.

The platform you use matters less than the fact that you use one and that your use of it is consistent, documented, and tied to a written standard.

I hear the same resistance to carrier vetting technology that I hear from carriers about dashcams. The argument against the dashcam is that if you are at fault, the camera turns on you. But that argument misses the point entirely. When you are at fault, the goal is to mitigate your exposure so that you are obligated to make the victim whole, not to make the victim rich. Making someone whole when you caused their harm is accountability. That is what the legal system is designed to do. What a dashcam does is show a jury that you had safety systems in place, that you were managing your operation, and that the incident was an exception to your standard practice, not a predictable consequence of your indifference. That is the difference between compensatory damages and a nuclear verdict. The distance between those two outcomes is not the severity of the crash. It is the severity of the jury’s belief that you did not care.

Carrier vetting technology works the same way. When a carrier you selected is involved in a catastrophic crash, the question is not whether you owe the victim. You do. The question is whether the jury believes you exercised reasonable care in selecting that carrier. A documented vetting record showing that you checked the carrier’s authority, reviewed their safety data, evaluated their insurance, applied consistent criteria, and made a defensible decision at the time of tender is the evidence that constrains the outcome. It does not eliminate liability. It constrains it to the obligation of making someone whole rather than the punishment of making someone rich.

The issue with technology is never that it tells on you. The issue is that when you implement it, you fail to manage what it provides. If you subscribe to a carrier intelligence platform and it flags a carrier as high risk and you tender the load anyway with no documentation and no justification, the platform’s own data becomes the plaintiff’s best exhibit. You had the information. You had the tools. You chose not to act. That is worse than not having the technology at all.

The technology works when you follow the policy it supports. When the data says stop, you stop. When the data says proceed with caution, you document the caution. When the data says this carrier meets your criteria, you retain the record that proves it. That is ordinary care. That is what Montgomery requires. And that is what these platforms are built to help you do.

If you do not have a carrier vetting policy or a technology platform to support it, the time to fix that is now. Not next quarter. Not at your next compliance review. Now. The first wave of post-Montgomery negligent-hiring suits will be filed within the next few weeks. If you are named in one and you have no documented vetting process, you are defending a $36 million claim with nothing but your word that you generally try to pick good carriers.

Tea Technologies provides a free carrier vetting policy template and broker due diligence guide at carrierverifi.com that covers the six-step post-Montgomery framework, sample policy language, documentation requirements, and red-flag criteria. It is not legal advice and it does not replace counsel. It is a starting point.

If you need legal guidance in building your program, there are transportation attorneys who specialize in this. Firms like Childress Law, their sister entity, Trucksafe Consulting, and others in the trucking defense bar have been advising carriers on safety culture and litigation defense for decades. Post-Montgomery, that expertise is equally critical for brokers.

If you need operational guidance, there are compliance consultants like TruckSafe Consulting that work with carriers and brokers to build documented, defensible programs from scratch. The resources exist. The expertise exists. The platforms exist.

Montgomery told the industry that ordinary care is the standard. Technology is how you meet it. Policy is how you define it. Documentation is how you prove it. The carriers and brokers who had these systems in place before May 14 are in a defensible position today. The ones who did not have a window to build them before the first subpoena arrives.

That window is closing.

U.S. in partnership with leading shipbuilding nation

The United States is making big plans to revive the domestic shipbuilding sector, and it’s reaching out to an ally for help.

The U.S. Department of Commerce and the South Korea’s Ministry of Trade, Industry and Resources this week signed a Memorandum of Understanding establishing the Korea-U.S. Shipbuilding Partnership Initiative (KUSPI).

The new platform strengthens bilateral cooperation in commercial shipbuilding, workforce development, industrial modernization, and maritime manufacturing investment, the International Trade Administration said in a release.

The initiative establishes the Korea-U.S. Shipbuilding Partnership Center, staffed and funded by Seoul, to be opened later this year in Washington. It will support expanded collaboration between government, industry, and research institutions from both countries, and include facilitating foreign direct investment in the U.S. maritime industrial base, workforce training initiatives, shipyard productivity improvement projects, and technical exchanges.

The Trump administration earlier this year released a Maritime Action Plan to revitalize domestic shipbuilding. South Korea is the world’s second-largest builder of commercial vessels after China; Seoul-based industrial giant Hanwha (000880.KS) currently operates a shipyard in Philadelphia.

Commerce, under the agreement, will help facilitate the center’s interactions with U.S. shipbuilding companies, suppliers, universities, and research institutes and act as its federal government-wide point of contact. Seoul will coordinate cooperation across its government and other shipbuilding stakeholders.

The ITA said that the signing builds on ongoing U.S.-Korea cooperation in strategic industries and reflects continued efforts to strengthen allied industrial capacity, promote investment, and expand collaboration in advanced manufacturing sectors.

Read more articles by Stuart Chirls here.

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Houston gains cargo share as volumes soften at West Coast ports

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Houston gains cargo share as volumes soften at West Coast ports

Executives at Flexport said ocean and air freight markets are showing signs of tightening capacity and elevated transportation costs heading into summer during the company’s North America Freight Market Update webinar on Thursday.

The webinar featured Nathan Strang, Kyle Beaulieu and David Grinevald, who discussed shifting import patterns, tighter vessel deployment, fuel surcharges and ongoing disruptions tied to Middle East tensions and global trade uncertainty.

Flexport, founded in 2013 by Ryan Petersen and based in San Francisco, provides global logistics solutions.

Strang said U.S. import volumes have softened at several major gateways following a strong 2025, with the ports of Los Angeles and Long Beach both seeing declines of roughly 1.5% year over year.

“Houston’s growth continues,” Strang said during the webinar. “We’ve seen a lot of containerized cargo going into Houston. Improvements to the ship canal have really allowed larger vessels to get in there and heavier vessels to go into the port of Houston.”

Strang said cargo is increasingly shifting toward East Coast and Gulf Coast ports, particularly Virginia and Houston, driven by changes in warehousing strategies, direct-to-consumer fulfillment and trans-Pacific service adjustments.

“The overall trend is that we’re still seeing a little bit of cargo slipping over to the East Coast for various reasons,” Strang said. “Houston is still very popular.”

SONAR’s Inbound Ocean Shipments Index measures freight booking activity for shipments entering the U.S. at the port level based on estimated departure dates. Port Houston recently saw a huge spike in bookings in mid-March just after the U.S.-Iran conflict began on February 28.

SONAR’s Inbound Ocean Shipments Index for Port Houston (IOSI.USHOU) shows bookings for freight bound for Houston are increasing faster than Los Angeles and Long Beach and is up 7.2% year over year. To learn more about SONAR, click here.

Strang also highlighted persistent operational disruptions across global trade lanes, including vessel congestion in Europe, soybean-export bottlenecks in South America and continued instability in the Middle East.

“The Strait of Hormuz is still very much non-operational,” Strang said. “It is closed so the Jebel Ali port is not available.”

Beaulieu said carriers tightened trans-Pacific eastbound capacity during May by blanking sailings around China’s May Day holiday, creating a firmer supply-demand environment entering the second half of the month.

“Supply is tighter now than it’s been for most of 2026,” Beaulieu said.

Beaulieu said deployment levels are expected to improve into late May and early June, although service disruptions could still constrain effective capacity.

“The open question is whether there will be a demand increase that would keep utilization up throughout June and in essence be an early peak,” Beaulieu said.

Beaulieu added that rising operating costs and fuel surcharges continue to pressure ocean freight pricing globally.

“Everyone should expect elevated rate levels to continue through the end of the month,” Beaulieu said.

On the air cargo side, Grinevald said the market has entered a “wait-and-see mode” after several weeks of rising rates, with global airfreight pricing stabilizing around $3.29 per kilogram despite weakening tonnage volumes.

“The main phenomenon at play here is that we’re seeing a decoupling between rates and volume,” Grinevald said. “Rates kept on rising even though tonnage fell.”

Grinevald said geopolitical tensions in the Middle East continue to disrupt airline operations and fuel markets globally, even as some airspace restrictions ease.

“The repercussions of the Middle East situation are global,” Grinevald said.

Grinevald said airlines continue to face operational uncertainty tied to insurance restrictions, rerouted flight paths and volatile fuel prices.

“We are now standing at 23-year highs,” Grinevald said of jet fuel prices.

Executives also fielded questions about congestion at the ports of Savannah and Vancouver, rail service into inland hubs and the likelihood of additional general rate increases, or GRIs, during the summer shipping season.

Beaulieu said current trans-Pacific market conditions suggest carriers are likely to hold mid-May GRIs as tighter vessel supply supports higher pricing.

“Capacity has tightened very much as a result of some of the blanks that were in market for May and then tightening of the supply-demand balance,” Beaulieu said.

What’s next after Montgomery? Likely a boost to the bigger 3PLs

Within an hour of the Supreme Court’s unanimous decision in Montgomery vs. Caribe II, opening the door to bringing in brokers as defendants when a carrier they hire is involved in an incident that leads to a lawsuit, the reactions began to pour in.

Nobody moves faster than Wall Street. And on a day when leading equity indices were up strongly, and trucking stocks were as well, the few brokerage-specific stocks trading on exchanges were all lower.

Even though C.H. Robinson was the company that led the charge trying to keep 3PLs protected under the Federal Aviation Administration Authorization Act (F4A), among three pure play brokerage companies (albeit a slightly altered model at Landstar), its stock had declined the least at approximately 1:30 p.m.

C.H. Robinson (NASDAQ: CHRW) was down 1.92% to $160.12, a drop of $3.14 when the S&P 500 was up

Meanwhile, RXO (NYSE: RXO) had dropped 8.83% to $18.07, a slide of $1.74, while Landstar (NASDAQ: LSTR) was down 1.72%, or $3.01, to $171.98.

Meanwhile, for reasons that are not necessarily related–carriers have brokerage units as well, and they can no longer cite F4A should those segments find themselves in a lawsuit–the truckload carriers were riding along with higher equity markets.

At about 1:30 p.m. EDT, Knight Swift (NYSE: KNX) was up 3.38%, J.B. Hunt (NASDAQ: JBHT) had risen 6.42%, and Schneider National (NYSE: SNDR) was up 11.07%. At about that time, the S&P 500 had risen just under 0.7%.

A surprising upside

The irony in the brokerage stocks getting hit is that large 3PLs can be seen to benefit from the Montgomery decision. They are the ones that will have the resources to better handle any higher insurance premiums; they will have more tools to vet carriers; and they’re the ones in the best position to prove the old adage that regulation is great for large incumbents and an absolute barrier to entry for smaller players.

RXO, in a prepared statement supplied to FreightWaves, suggested that it understood that roadmap.

“RXO does not expect this ruling to have a negative material impact on our business,” it said in the statement. “In fact, it underscores the importance of choosing a brokerage partner with rigorous carrier vetting processes and financial stability. We believe this ruling will accelerate industry consolidation, reinforcing the long-term competitive advantage of scaled players like RXO.”

How did the stock market respond to today's SCOTUS ruling on broker liability?

Craig Fuller and Matthew Leffler joined forces for a breaking news update on that and everything else surrounding the unanimous SCOTUS ruling that changes freight forever. pic.twitter.com/8h2lAIm4Q7
— FreightWaves (@FreightWaves) May 14, 2026

In its statement, C.H. Robinson said it was “disappointed with the outcome.” But it also cited the statements by Justices Samuel Alito and Brett Kavanaugh in their separate concurring opinion.

“Importantly, the Court’s decision today should not be read to mean that brokers will routinely be subject to state tort liability in the wake of truck accidents,” the justices said. “As even plaintiff ’s counsel stressed, brokers should be able to successfully defend against state tort suits if the brokers have acted reasonably and arranged transportation with reputable trucking companies.”

Reaction in the states won’t be consistent

In a brief commentary, the trucking-focused law firm of Scopelitis looked to the concurring opinion of the two justices and said it shows that “state tort law can be unpredictable with litigation and insurance costs being passed on to consumers. Nevertheless, the decision underscores the importance to brokers of a sound and reasonable carrier vetting procedure that is faithfully followed.”

As an attorney involved in the case noted, being able to be found negligent or liable under Montgomery doesn’t mean such a finding is automatic.

C.H. Robinson’s statement also seemed to suggest it might come out stronger after this, much like RXO said.

“This ruling underscores the importance of working with a broker that offers the scale, technology and compliance processes needed to navigate this new freight landscape,” the company said. “C.H. Robinson will continue to select only carriers licensed by the Federal Motor Carrier Safety Administration (FMCSA) as required by law, support strong federal oversight, serve customers without disruption, and remain a trusted partner for shippers.”

The company’s prepared statement said the shipments it arranges “overwhelmingly move without incident, with just one serious accident claim filed for every 500 million miles driven on our customers’ loads. But even one accident is one too many.”

Wall Street bank surveys the wreckage

In a report that did not mince words, the transportation team at Deutsche Bank led by Richa Harnain, said its estimate was that 20% of the trucking industry “could face grave financial consequences on the back of this Supreme Court decision.”

But that’s not an estimate on the impact for brokerages; that’s the industry as a whole. Deutsche Bank got to that estimate by multiplying about 60% of the brokerage industry that is in peril, which in turn accounts for about 30% of the total market.

And as a result, in a statement that echoed what some of the bigger brokerages were saying, “That should therefore create more share gain opportunities for the larger, more insulated players.”

Deutsche Bank looked at the stock price selloff at C.H. Robinson and said it was “knee-jerk.” “We think the company already retains higher amounts of insurance than the average brokerage community,” it said. The analyst added that with 40% EBIT net margins in its truck brokerage arm, “the impact to profitability from additional insurance is relatively low. Hence, we think it is best positioned in the brokerage community.“

In its commentary, Deutsche Bank said it expected the impact of the Montgomery case to have long-term impact.

“We think this Supreme Court decision could create much more lasting discipline in the industry,” it said. “Brokers will be more diligent in terms of who they hire, showing a selectivity bias towards quality-operators, to avoid costly risk. Effectively this would further increase the barriers to entry for the industry, aside from just the added cost of insurance from doing business.”

And it asked a question that has been floating around in the industry for awhile as it awaited the Montgomery case to be settled.

“If brokers can be held liable when carriers they hire get into accidents….what’s to stop shippers from being held liable for brokers and/or carriers they hire next?,” Deutsche Bank said. “We think today’s decision makes this a fair question, which could further increase the quality-bias in the industry.”

Trade group “deeply disappointed”

Even as big brokerages may benefit, a lot of small ones likely won’t. And that is likely on the mind of the Transportation Intermediaries Association, the 3PL trade group which represents small and large brokers alike.

“We are deeply disappointed with the decision as the law and legal precedent for decades has given the federal government, not states, the responsibility for setting safety standards for motor carriers,” the TIA said in a prepared statement. “To date, carriers, not brokers, have been responsible for complying with these standards.”

Montgomery, TIA said, “imposes an impossible task on brokers — effectively asking them to evaluate the safety of a given motor carrier despite having been deemed safe to operate on public roads by the federal government. This is like asking travel agents to evaluate the safety of a given airline despite the fact that the airline has been licensed to fly by the federal government.”

The trade group knows it has its work cut out for it. “We are working with our members to assess potential next steps to mitigate the consequences of the Supreme Court’s decision,” the TIA statement said.

More articles by John Kingston

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At TIA meeting, freight brokers brace for Supreme Court decision
Strange bedfellows as states say brokers not protected under ‘safety exception’.

TL linehaul rates surge in April, Cass says

a closeup of a tractor-trailer on a highway

Freight shipments stabilized in April as capacity constraints pushed rates to recent highs, according to monthly data from Cass Information Systems.

The shipments component of the Cass Freight Index was down 4.4% year over year but increased 0.4% from March (up 0.6% seasonally adjusted). That was a third straight sequential increase in volumes, and “an encouraging signal for a potential second-half recovery,” the Thursday report said.

Normal seasonal trends moving forward would result in a 1.7% y/y increase in the shipments index during the back half of the year. The dataset is expected to decline just 1% y/y in May.

A two-year-stacked decline of 7.9% was tied for the smallest over the past year.

April 2026	y/y	2-year	m/m	m/m (SA)
Shipments	-4.4%	-7.9%	0.4%	0.6%
Expenditures	3.5%	4.8%	2.6%	1.2%
TL Linehaul Index	5.6%	6.5%	3.2%	NM

Table: Cass Information Systems (SA – seasonally adjusted)

At an investor conference held this week, J.B. Hunt (NASDAQ: JBHT) reported that shipper demand exceeded expectations throughout the first quarter and has remained steady since. It sees a path to raise truckload rates materially over the next two years.

“LTL tonnage trends are improving for some fleets, which bodes well for continued improvement in shipment trends in the coming months,” the Cass report said. “Tightness in the dry van TL market is starting to radiate to other modes, so far mainly reefer and flatbed TL, but eventually this tightness will drive demand in LTL and intermodal as well.”

SONAR: Outbound Tender Rejection Index (OTRI.USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). A proxy for truck capacity, the tender rejection index shows the number of loads being rejected by carriers. Current tender rejections show a tightened truckload market. *To learn more about SONAR, click here.*

Cass’ (NASDAQ: CASS) expenditures index, which measures total freight spend including fuel, was up 3.5% y/y and 2.6% higher than March (1.2% higher seasonally adjusted). Higher diesel prices and core freight rates were the drivers of the increase.

Cass’ TL linehaul index , which tracks rates excluding fuel and accessorial surcharges, surged 5.6% y/y, registering the largest y/y increase since August 2022. The dataset was 3.2% higher sequentially, which was the biggest jump since March 2022. However, the index was basically flat sequentially in February and March.

The dataset, which includes for-hire spot and contract rates, has been up y/y in 16 straight months.

SONAR: National Truckload Index (linehaul only – NTIL.USA) *for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line)*. The NTIL is based on an average of booked spot dry van loads from 250,000 lanes. The NTIL is a seven-day moving average of linehaul spot rates excluding fuel. Spot rates stepped higher through peak season as regulatory constraints on the driver pool took hold. *Rates remain notably higher on a y/y comparison* *in May.*

The report concluded that the freight cycle is being led by the supply side as noncompliant drivers are being forced out of service. It cautioned that “higher fuel prices sapping consumer spending, and rising interest rates sapping the housing market” are weighing on demand, which will be required at some point to carry the recovery.

“New FMCSA regulations have acted as a catalyst, and seem likely to result in tighter capacity and higher rates from here,” the report said.

Data used in the indexes comes from freight bills paid by Cass, a provider of payment management solutions. Cass processes $37 billion in freight payables annually on behalf of customers.

More FreightWaves articles by Todd Maiden:

New Dollar Tree distribution center to support 700 Southwest stores

Dollar Tree has opened a one million-square foot distribution in Litchfield Park, Arizona, outside of Phoenix and plans to begin outbound deliveries next month, the value retailer announced on Thursday.

As one of Dollar Tree’s (NASDAQ: DLTR) largest distribution centers, the climate-controlled facility will service about 700 stores in Arizona, Colorado, Nevada, New Mexico, and Utah. The company now has 19 distribution centers that support more than 9,240 stores across North America.

“This facility will help us move product closer to our stores and serve customers more quickly,” said Roxanne Weng, chief supply chain officer, in a news release.

The new facility is part of a broad investment strategy to optimize Dollar Tree’s distribution network. The company is expanding and modernizing DCs and replacing legacy warehouse and yard management systems with cloud-based platforms that will enable better inventory planning, visibility and execution, Weng said at an Investor Day presentation last October. The addition of temperature-controlled storage in all DCs was completed last year. The upgrades are helping to even out product flow to stores so back rooms aren’t overcrowded, improve throughput per facility, reduce out-of-stock items, and strengthen the company’s cost structure, she added.

Dollar Tree plans to open its next distribution center in Marietta, Oklahoma, in spring 2027, after it finishes rebuilding a facility that was destroyed by a tornado in April 2024. The enhanced Marietta facility will also have one million-square feet of capacity and serve about 700 Dollar Tree stories in the Southwest and West.

The freight Broker insurance gap is now real

Today, the Supreme Court told every freight broker in America that they can be sued for negligent carrier selection. Montgomery v. Caribe Transport II was unanimous. Nine to zero. The FAAAA preemption shield that the brokerage industry had relied on for decades is gone.

So…what’s next? Well, insurance of course. Anytime liability and exposure rear their heads, insurance becomes a necessity to protect the rest of society.

The only federal financial responsibility requirement for a freight broker in the United States is a $75,000 surety bond. That bond does not cover tort liability. It does not respond to a personal injury judgment. It does not pay out when a jury decides that a broker was negligent in selecting a carrier whose truck killed someone. It exists for one purpose only: to ensure that motor carriers and shippers get paid when a broker defaults on its freight payment obligations. Notice I said “United States” because many overseas brokers remain largely shielded from accountability.

Seventy-five thousand dollars. A surety bond. Against a legal landscape where the median nuclear verdict in trucking cases is $36 million and climbing.

The broker surety bond requirement lives in 49 U.S.C. Section 13906 and 49 CFR 387.307. MAP-21 set the current $75,000 floor in 2012, replacing the previous $10,000 requirement that had been in place since the Motor Carrier Act of 1980. FMCSA tightened enforcement of the bond requirement with a final rule that took full effect January 16, 2026, closing loopholes around BMC-85 trust funds that had allowed some brokers to operate with junk assets and no real liquidity.

Those reforms were necessary and overdue. Carriers had been getting burned for years by brokers who defaulted on payments while operating on paper-thin financial backing. The tighter bond enforcement protects carriers from non-payment. It does nothing to protect the public from the consequences of a broker’s negligent selection of a carrier.

The bond “shall ensure the financial responsibility of the broker by providing for payments to shippers or motor carriers if the broker fails to carry out its contracts, agreements, or arrangements for the supplying of transportation by authorized motor carriers.” Contracts. Agreements. Arrangements. Payment obligations. Not tort liability. Not negligent hiring. Not the $36 million judgment a jury just handed down because the broker put a load on a carrier with a conditional safety rating and a driver who had not slept in 22 hours.

There is no federal requirement for a freight broker to carry bodily injury liability insurance. None. Not a dollar.

Some brokers carry contingent auto liability and contingent cargo insurance. I did when I brokered freight. Many of the larger operations do. These are policies that respond when a carrier’s own insurance is exhausted, disputed, or nonexistent, and the broker faces a claim arising from the carrier’s operations. Contingent auto, in particular, is the policy that would respond to a negligent-hiring claim post-Montgomery.

Contingent auto has never been a federal requirement. It has been a business decision. A risk management choice. Something the sophisticated brokers carried because they understood the exposure, and something the unsophisticated brokers skipped because nobody made them buy it and the FAAAA preemption defense meant they probably would never need it.

That calculation just changed. Permanently.

The brokers who already carry contingent auto and cargo coverage are sitting in a defensible position. They have a policy that responds. They have documentation that they took the exposure seriously. They can tell a jury that they not only vetted the carrier but also carried insurance against the possibility that their vetting was insufficient. That is a powerful litigation posture.

The brokers who do not carry those policies, and that is a lot of brokers, are now exposed in a way they have never been. They have $75,000 in surety bond coverage that does not respond to tort claims, no liability insurance, and a Supreme Court opinion that says state courts can hold them accountable for negligent carrier selection. The first time one of those brokers gets named in a catastrophic crash case, the math will become very clear very fast.

Here is why the insurance gap matters more now than ever. The American Transportation Research Institute published its updated trucking litigation analysis in late 2025. The findings should scare every broker, carrier, and insurer in the freight industry. Truck-tractor tort case filings grew at an average annual rate of 3.7 percent between 2014 and 2023. The median nuclear verdict, defined as a jury award exceeding $10 million, reached $36 million in 2022. That is approximately 50 percent higher than the median nuclear verdict in 2013. The share of verdicts exceeding $50 million increased by 6.4 percentage points over that same period.

The average trucking verdict between 2020 and 2023 was $27.5 million. Thermonuclear verdicts and awards exceeding $100 million have grown exponentially. In 2024, a St. Louis jury awarded $462 million against trailer manufacturer Wabash National in a fatal underride crash case, including $450 million in punitive damages. In 2021, a Florida jury returned a $1 billion verdict against a carrier in a fatal crash, the largest single trucking verdict in American history.

ATRI found that in more than 80 percent of verdicts exceeding $1 million, non-medical damages such as pain and suffering were up to 10 times higher than the actual medical bills. The average verdict above $1 million grew from $2.3 million in 2010 to $22.3 million in 2018. That is a 967 percent increase in eight years.

These are the numbers that now apply to freight brokers.

Geography matters enormously. ATRI’s report singles out California, Georgia, and Florida as the states with the highest median awards. Texas and Louisiana are consistently identified as nuclear verdict hotspots. The American Tort Reform Association has designated specific jurisdictions within these states as “judicial hellholes” where plaintiff-friendly procedural rules, expansive discovery, aggressive plaintiff’s bar tactics, and anti-corporate jury sentiment combine to produce outsized verdicts.

State courts are significantly more expensive for trucking defendants than federal courts. ATRI found that, for cases with verdicts over $1 million, the median award in state court was $3.6 million, compared with $2.5 million in federal court. The Institute estimated that in 2022 alone, the trucking industry lost upwards of $102.8 million in excess jury awards because eligible cases were not removed from state courts. That is pure forum-shopping exposure.

The FAIR Trucking Act, introduced in September 2025 by three Republican members of Congress, would give federal courts jurisdiction over large interstate trucking cases to reduce venue shopping. ATA has endorsed it. But the bill has not passed. Even if it does, it addresses where the case is heard, not how much insurance the broker must carry.

Two forces are converging on brokers simultaneously. The plaintiff’s bar is becoming more aggressive and more sophisticated in its approach to trucking cases. The reptile theory, third-party litigation funding, social inflation, and anti-corporate jury sentiment are all driving verdicts higher. And now, thanks to Montgomery, the defendant pool just expanded to include every freight broker who selected the carrier involved in a catastrophic crash.

The federal minimum insurance requirement for interstate motor carriers hauling general freight is $750,000. Congress set that number in the Motor Carrier Act of 1980 as part of deregulation. The specific regulation was finalized in 1985. It has not been adjusted once in the 45 years since.

If the $750,000 minimum had tracked core inflation since 1985, it would be approximately $2.2 million today. Adjusted for the actual increase in medical costs and wrongful-death awards, it would be roughly $3.7 million. FMCSA’s 2026 quadrennial filing shows that the $750,000 minimum now covers under 1.5 percent of the median nuclear verdict.

On April 9, 2026, Representatives Jesús García of Illinois and Derek Tran of California reintroduced the Fair Compensation for Truck Crash Victims Act, which would raise the carrier minimum from $750,000 to $5 million and index it to inflation going forward. This is the fourth time García has introduced this legislation. It has been endorsed by the Institute for Safer Trucking, the American Association for Justice, the Truck Safety Coalition, and several highway safety advocacy groups.

FMCSA has signaled it expects to publish a Notice of Proposed Rulemaking that would raise the minimum to $2 million or more. Some industry analysts expect the final number could reach $5 million for general freight. Implementation, if it happens, would come in late 2026 or 2027 at the earliest.

The carrier minimum debate has been running for over a decade. The Trucking Alliance, led by carriers like Knight Transportation and J.B. Hunt, favors an increase. ATA has generally opposed it, arguing that the current minimum still meets its intended purpose for the vast majority of claims. The Trucking Alliance’s counter is direct: if all crash settlements in the available data were covered by a $750,000 limit, 42 percent of the monetary exposure would represent an uninsured liability of the trucking company.

That is the carrier side. The broker side is worse. The carrier at least has $750,000. The broker has nothing. Zero federal liability insurance requirement.

Freight brokerage in the United States has historically been one of the easiest transportation businesses to enter. The total cost to become a licensed freight broker is under $2,000. You can arrange loads within three weeks of filing your application. The requirements are a BOC-3 process agent designation, a $75,000 surety bond (which costs roughly $938 per year in annual premium for a BMC-84 bond with good credit), and a completed OP-1 application. That is the federal barrier to entry for an industry that arranges approximately one-third of all freight shipped in the United States by more than 780,000 carriers.

There are roughly 28,000 licensed freight brokers in the United States. Many are sophisticated operations with robust carrier vetting processes, experienced compliance teams, and insurance portfolios that include contingent auto, contingent cargo, general liability, errors and omissions, and excess coverage. Many others are small operations, some run from a laptop and a cell phone, that have never purchased a contingent auto policy and would not know what one was if you asked them.

Post-Montgomery, both categories are equally exposed to state tort law for negligent carrier selection. The difference is that one category has insurance that responds and the other does not.

The conversation about broker insurance requirements has been theoretical for decades. Montgomery just made it urgent.

Congress should mandate minimum liability insurance for freight brokers. The surety bond serves its purpose for carrier payment protection. It is not and has never been a substitute for liability coverage. A broker who selects a carrier that causes a catastrophic crash should have a financial backstop to cover the resulting claim. That is not a radical proposition. It is the same principle behind the carrier insurance requirement that has existed since 1935.

What should the minimum be? Setting it at $750,000 to match the current carrier minimum is a starting point, but the carrier minimum itself is almost certainly going to be raised. A broker minimum that matches whatever the new carrier minimum becomes would create parity between the party that operates the truck and the party that selected the operator. If the carrier minimum goes to $2 million, the broker minimum should match it.

The insurance industry will need to develop products for this market. Contingent auto and contingent cargo policies exist, but they have been voluntary niche products. If broker liability insurance becomes mandatory, the market will need to scale those products to 28,000 brokerages of varying size, sophistication, and risk profile. Underwriters will need data on broker-carrier selection practices, and brokers with documented, data-driven vetting processes will receive better rates than those without any process at all. That is how it should work. The insurance market should reward brokers who take carrier selection seriously and penalize those who do not.

For brokers operating today, the action item is immediate. If you do not carry contingent auto liability insurance, call your insurance broker today. Not tomorrow. Today. The Montgomery opinion was published 48 hours ago. The plaintiff’s bar has been preparing for this moment for years. The first negligent-hiring suits against brokers will be filed within the next few weeks. If you are named in one of those suits without liability coverage, you will be defending a claim with a $75,000 surety bond that does not respond to tort liability and whatever personal or corporate assets you have.

That is not a defensible position. That is a business extinction event.

Montgomery v. Caribe Transport settled the preemption question. It did not settle the question of financial responsibility. The court said brokers can be sued. It did not say brokers are required to carry insurance that would pay the judgment. That gap between liability and financial responsibility is where the next crisis is building.

The carrier insurance minimum has been $750,000 since 1980 and it covers less than 1.5 percent of the median nuclear verdict. The broker insurance minimum is zero. The median trucking verdict is $36 million. The surety bond is $75,000 and it does not even respond to tort claims.

Something has to give. Either Congress mandates broker insurance, FMCSA includes brokers in the pending carrier insurance rulemaking, or the market eventually forces it through premium structures that make operating without coverage economically irrational. One way or another, the era of brokering freight with no financial responsibility for the consequences of your carrier selection is over. Montgomery told the industry that brokers owe a duty of care. The question that remains is whether they will be required to back that duty with real money.