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’

Texas trucking firm sued over age limits on drivers

A Texas trucking company refused to hire a 64-year-old driver with more than 20 years of experience because its insurance provider allegedly would not cover him, according to a federal lawsuit.

The U.S. Equal Employment Opportunity Commission (EEOC) filed suit Sept. 24 against Pharr, Texas-based Trancasa USA Inc., alleging the company systematically rejected older truck driver applicants and imposed stricter driving-record and medical documentation requirements based on age.

The lawsuit, filed in the U.S. District Court for the Southern District of Texas in McAllen, alleges Trancasa violated the Age Discrimination in Employment Act (ADEA), which prohibits employment discrimination against individuals 40 and older.

Trancasa USA operates 171 power units and employs 198 drivers, with approximately 18.8 million miles reported in 2025, according to the Federal Motor Carrier Safety Administration. The company’s website also describes a broader transportation operation serving the U.S., Mexico and Canada, advertising more than 400 transport units and 1,000 semi-trailers.

According to the Sept. 24 complaint, Trancasa restricted driver hiring based on eligibility standards associated with a commercial liability insurance policy purchased in 2023.

The standards allegedly required drivers to be at least 23 years old and no older than 65. Drivers younger than 25 or older than 60 who had any traffic violations or accidents during the previous three years were considered ineligible.

The policy also allegedly required drivers ages 63 to 65 to provide a long-form medical examination report, known as Form MCSA-5875.

“Employers cannot discriminate against workers by claiming that the discrimination is required or authorized by a contract with another party, such as a customer or insurance provider,” said Ronald L. Phillips, acting EEOC Dallas regional attorney, in a statement.

“Such agreements and their implementation are illegal, and both parties to the contract place themselves at considerable risk of potential litigation and liability.”

Driver with clean record allegedly rejected

The complaint identifies Gilbert Cerda, a 64-year-old truck driver with more than two decades of experience and a clean driving record, as the individual whose discrimination charge led to the lawsuit.

Cerda applied for a truck driving position with Trancasa in November 2023 and met with a company recruiter, according to the complaint.

The recruiter allegedly told Cerda that his application would require review by Trancasa’s insurance carrier because he was approaching the policy’s maximum eligible age.

Several weeks later, Cerda returned to Trancasa’s facility in Pharr to inquire about his application.

According to the EEOC, the recruiter informed Cerda that the insurance provider had determined he could not be hired because of his age.

The complaint alleges Trancasa rejected Cerda around Nov. 27, 2023, despite his qualifications and driving history.

EEOC contends Cerda was not the only applicant affected. Since at least June 2023, the company allegedly refused to hire multiple applicants over age 60 under the same eligibility standards.

The agency also alleges Trancasa required drivers and applicants ages 63 to 65 to submit Form MCSA-5875 as a condition of employment while not routinely imposing the same requirement on younger drivers.

The EEOC states that federal law does not require trucking companies to obtain or be provided with the long-form medical examination report.

Insurance provider remains unverified

The EEOC complaint does not identify the insurance provider responsible for the disputed driver eligibility standards.

Trancasa switched between several insurance providers between June 2021 to June 2024.

The FMCSA filings establish a reported liability insurance relationship, but do not independently establish which insurance provider issued or enforced the specific age-based requirements described in the lawsuit.

FreightWaves contacted Trancasa and several of the company’s previous insurance providers during the time period of Cerda’s employment application seeking comment on the allegations, the insurance coverage and the company’s driver eligibility policies. None had responded as of publication.

EEOC seeks damages and changes to hiring policies

The EEOC alleges Trancasa’s practices violated federal law by denying employment opportunities to older applicants and subjecting certain drivers to different employment conditions because of their age.

The agency is seeking back pay, prejudgment interest, potential employment or front pay, and liquidated damages for Cerda and other affected applicants and employees.

The complaint also seeks a permanent injunction prohibiting discriminatory employment practices and requiring Trancasa to implement policies ensuring equal employment opportunities.

The EEOC issued a reasonable-cause determination in March and attempted to resolve the matter through its administrative conciliation process before filing suit.

The agency alleges the violations were willful. Those allegations have not been adjudicated, and no monetary damages have been awarded.

The case is U.S. EEOC v. Trancasa USA Inc., No. 7:26-cv-00457, in the Southern District of Texas.

Why it matters: The federal lawsuit against Trancasa USA Inc. raises questions about how motor carriers apply insurance underwriting requirements without violating federal age-discrimination laws.

More FreightWaves articles by Noi Mahoney:

Trucking Rates Spike: Contracts at 52-Week High

Freight rates are surging! Contract rates hit a 52-week high and spot rates climbed nearly 50% year-over-year in the latest Sonar update. We’ll also cover the localized impact of Tropical Storm Isaias on tender rejections in Gulf Coast markets like Mobile and Montgomery. Plus, an exciting new Sonar release now offers intermodal rates, lanes, and cost savings compared to van. Stay ahead with critical insights for your supply chain strategy.

Contract truckload rates have climbed to a 52-week high of $2.72 per mile plus fuel, up 18% year over year, as carriers and shippers reset agreements at elevated levels, according to FreightWaves SONAR data presented in an Oct. 9 market update.

The move in contract rates matters because it signals that shippers are no longer holding the line on legacy pricing. With spot rates also rising — the NTI index is up nearly 50% year over year — the gap between contract and spot is narrowing, giving carriers leverage as annual bids roll over.

Tender rejections remain range-bound but elevated, with the Outbound Tender Reject Index sitting at 13.75%, inside a recent 13% to 14% band. Truckload demand ticked up approximately 1.25% week over week, returning to pre-Labor Day levels after a brief post-holiday pullback, said Julie Van de Kamp during the SONAR Update.

“Contract rates have reached a 52-week high at $2.72 per mile plus fuel — that’s up 18% year over year, so we’re absolutely seeing some of those contracts between carriers and shippers re-upping, reset at higher rate levels,” said Van de Kamp.

A storm in the Gulf — identified in the briefing as Isaías — is creating localized disruptions along the Alabama Gulf Coast and the Florida Panhandle. Tender rejections and spot rates have risen noticeably in the Mobile and Montgomery, Alabama markets over the past several days, with inbound truckload rejections into both markets climbing sharply relative to the national average, Van de Kamp noted.

FreightWaves’ Weather Optics tool is tracking the storm’s projected path and landfall timing, with the Business Impact Index showing moderate-to-elevated disruption risk across the affected region. Van de Kamp said the Business Impact Index is among her preferred tools for assessing storm-related freight risk, alongside road closure and power outage overlays available in the module.

On the product side, FreightWaves released intermodal rate benchmarks within the SONAR Rate Intelligence module. Users can now view available lanes, nearest rail ramps, and cost comparisons versus van in both contract and spot formats — joining van, refrigerated, and flatbed as available modes in the tool.

Contract truckload rates hit a 52-week high of $2.72 per mile plus fuel, up 18% year over year
Spot rates tracked by the NTI index are up nearly 50% year over year; tender rejections hold at 13.75%
Storm Isaías is disrupting Mobile and Montgomery markets; SONAR adds intermodal rates to its Rate Intelligence module

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

Logistics AI: Getting a Return on Your Investment

AI is rapidly transforming logistics, but the real challenge isn’t just adoption – it’s getting a tangible return on investment. Dan Bailey, Co-Founder & CEO of Nexcade, discusses how leading companies like C.H. Robinson are leveraging AI for lean operations and growth. He also shares key insights on overcoming implementation challenges, measuring success beyond efficiency, and why a dual strategy of top-down and grassroots experimentation is crucial for your AI journey.

The $300 million in projected synergies from C.H. Robinson’s acquisition of RXO puts a sharp number on what AI-driven efficiency can mean at scale, but Nexcade co-founder and CEO Dan Bailey says most logistics companies are still struggling with a more fundamental problem: turning embedded operational knowledge into something AI can actually use.

“Context is the biggest challenge in our space,” Bailey said. “Whether you’re talking about international freight or on the brokerage side, there is so much embedded knowledge built up through years of experience and through real market nuance — and so turning that into insight that AI can use is an extremely, extremely tough challenge.”

“If you’re not adopting it, I can guarantee you that your employees are in shadow capacity one way or another — there was a ton of shadow ChatGPT, shadow Claude being used across this industry and many others right now.”

Bailey, speaking from London, said Nexcade tracks 40 to 50 leading freight forwarders and logistics service providers globally, monitoring every public AI announcement they make. He described the volume of those announcements over the last six to nine months as “overwhelming.” On the RXO deal specifically, he noted that while C.H. Robinson’s lean operating model has already shown bottom-line results, applying it to an entirely new business with limited customer overlap and different operational knowledge introduces real execution risk around that $300 million target.

On the product side, Bailey said roughly 90% of quote requests still arrive over email, and Nextcade’s agents are designed to read customer inboxes, classify freight type, extract shipment details, and automatically execute spot procurement lookups — including checking contracts, spot market rates, and overseas agent portals via API or browser. The goal, he said, is for operators to arrive each morning with 10 to 15 quotes already staged for a pricing decision, rather than spending time on four to five emails and multiple lookups per quote. Teams using the platform have doubled files-per-head throughput, he said, and one customer now receives automated responses to overseas agent requests that arrive at 3 a.m., before competitors are available to respond. About 75% of current customer volume runs on air and ocean, with the remaining 25% on road freight including U.S. domestic and European lanes.

For companies that haven’t yet started piloting AI, Bailey recommended a dual strategy: a top-down effort to identify strategic workflows and build data foundations, paired with a bottom-up empowerment approach that lets willing managers and teams run small pilots without waiting for enterprise rollout. He said companies often learn as much from those smaller experiments as from large projects, getting “three or four bites at the apple” before the biggest initiatives even reach the rollout phase.

On measuring ROI beyond time savings, Bailey pointed to two metrics that tend to get overlooked: risk reduction and revenue impact. Reconciliation tools and exception handling can reduce demurrage, detention, and unexpected charges, with the aggregate effect becoming significant over 12 to 18 months. On the revenue side, he said speed-to-quote data — including average win rates by response time and margin by lane — gives companies a way to quantify the commercial impact of AI initiatives, not just the efficiency gains. He drew on his earlier experience helping scale Sedna from 20 to more than 250 customers, noting that change management remains as critical in the AI era as it was when his previous company was replacing Outlook for large shipping firms.

Nextcade’s Dan Bailey says converting tacit operational knowledge into AI-ready context is the core challenge blocking ROI for most logistics companies.
C.H. Robinson’s $300 million RXO synergy target carries execution risk because absorbing a new business’s operational context at pace is difficult, even with a proven lean AI model.
Nextcade’s quoting agents — handling 90% of email-based requests — have helped customers double files-per-head and automate responses to overnight quote requests before competitors wake up.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

$185M Breakup Fee? Inside the CH Robinson-RXO Merger

The potential $5.8 billion acquisition of RXO by CH Robinson is set to reshape the logistics landscape. Valued at an astounding 42x EBITDA, this deal signals a major shift towards market consolidation and highlights the growing importance of asset-like services like drop trailers. What does this mean for the future of 3PLs and overall transportation capacity? We break down the financial implications, regulatory hurdles, and potential legal risks.

C.H. Robinson’s proposed $5.8 billion acquisition of RXO is priced at roughly 42 times EBITDA — a steep premium in an industry where comparable companies typically trade between 8 and 13 times EBITDA — and the deal’s credibility rests almost entirely on a pledge to deliver $300 million in cost savings within two years. The transaction, which still requires regulatory clearance and an RXO shareholder vote, would give the combined entity approximately 20% of the brokered freight market, though the company frames its competitive footprint in broader terms, saying it holds only single-digit share of the overall transportation market.

Matthew Leffler, known in freight circles as the Armchair Attorney, said antitrust risk is minimal but cautioned that the financial math deserves scrutiny. RXO is still integrating its Coyote acquisition, adding complexity to any projection of near-term savings. “If you’re saying you can save $300 million in 2 years, when RXO is already a very lean organization, that is a question that shareholders are going to be very curious about,” Leffler said.

“Almost every merger of this size — no one hits those numbers.”

If the deal collapses, either party faces a $185 million breakup fee — significant, though modest compared to the roughly $2 billion breakup fee attached to the proposed Union Pacific–Norfolk Southern transaction. Leffler said the more plausible threat to closing is shareholder dissent, not regulators, but called it unlikely given the premium on offer. Because the transaction is structured as a stock deal, all existing legal liabilities — including ongoing litigation tied to catastrophic accidents involving motor carriers — transfer to C.H. Robinson upon close.

Leffler flagged the post-Montgomery liability environment as a growing concern across the brokerage sector. He pointed to the Lupus Superior case, in which C.H. Robinson was found at the trial level to be a co-employer of a carrier’s driver, as an example of the regulatory and legal pressure reshaping the industry. Higher insurance costs, an ever-shrinking carrier capacity pool, and increased litigation exposure are pushing mid-size brokers toward the exit, he argued, accelerating consolidation at the top.

Beyond the headline financials, Leffler highlighted trailer networks as an underappreciated driver of these mergers. RXO and C.H. Robinson have each built pools of drop-and-hook trailers — sometimes 3,000 to 4,000 units — while ITS Logistics, recently acquired by Echo Global Logistics, operates a fleet of 8,000 trailers. “What we are watching is not just acquisitions and platforms being built and built upon,” Leffler said. “It is trying to offer customers a differentiated offering that gives them some value they’re not seeing from other 3PLs.” He noted that about 70% of unplanned maintenance events at transportation companies stem from trailing assets, underscoring the operational demands of scaling a trailer network.

The consolidation trend is unlikely to stop with this deal. Panelists on the program noted that brokers ranked roughly 20 to 50 by size could be the next wave of merger activity, and that the industry risks becoming one publicly traded 3PL surrounded by a field of private equity-owned competitors — a structure Leffler called less than ideal for market transparency. On the regulatory front, he expects C.H. Robinson to file a motion to dismiss a separate RICO lawsuit against the company in the coming weeks.

C.H. Robinson is acquiring RXO in a $5.8B deal valued at ~42x EBITDA, with a $185M breakup fee if the transaction falls through.
The deal’s financial case depends on $300M in synergies over two years, even as RXO continues integrating its Coyote acquisition.
Trailer network scale — with top brokers managing 3,000 to 8,000 units — is emerging as a key strategic differentiator driving brokerage consolidation.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

Stord lands $400M Citi-led credit facility, adds CFO and CRO

Exterior of Stord’s Atlanta fulfillment warehouse. The company closed a $400 million credit facility led by Citi.

Stord said Thursday it closed a $400 million credit facility led by Citi and hired new finance and revenue chiefs. The Atlanta-based fulfillment company said the facility closed oversubscribed at nearly double its original target.

Morgan Stanley, JPMorgan, First Citizens, Citizens and KeyBank also participated. The deal follows a $250 million Series F led by Strike Capital in May that valued Stord at $3 billion. That brings Stord’s 2026 equity and credit capacity to $650 million, the company said.

“This facility, combined with our $250 million Series F, gives us the balance sheet to match the scale, potential, and impact of what we’re building,” said Sean Henry, CEO and co-founder of Stord, in the announcement. “We will use this capital to expand our fulfillment network, accelerate our deployment of robotics, and invest aggressively in AI through Stord Labs.”

The announcement did not disclose the facility’s structure, pricing or maturity.

Nearly 100 fulfillment locations

Revenue run-rate is approaching $1 billion, and the company has grown tenfold over the past four years, Stord said. Henry told Axios Pro the company has grown materially since its May raise. Stord, which is privately held, did not disclose revenue or profit figures.

The company says it runs nearly 100 fulfillment locations worldwide for more than 1,000 brands and processes more than $15 billion in gross merchandise volume a year. Its packages reach 1 in 4 U.S. households annually, according to Stord.

Acquisitions built part of that footprint: ProPack Logistics and Pitney Bowes’ e-commerce fulfillment unit in 2024, Ware2Go from UPS in May 2025 and Shipwire from Ceva Logistics in January. Ware2Go alone added 21 e-commerce warehouses with about 2.5 million square feet of storage capacity, and Shipwire brought 12 fulfillment centers.

Two hires from public companies

Bill Zerella, the new chief financial officer, has led finance at three public companies and took all three to the public markets, including Fitbit in its 2015 IPO. He most recently served as CFO of ACV Auctions.

Mark Wayland, the new chief revenue officer, was most recently chief revenue officer at Box and held the same title at Tanium before that. He spent more than a decade at Salesforce, where he rose to senior vice president of Marketing Cloud.

Both men come to Stord from NYSE-listed companies.

The new lenders and executives are “a vote of confidence in the foundation we’ve created at Stord, as well as a signal of where we are headed,” Henry said.

Kodiak AI, Charger Logistics launch autonomous Laredo lane

Kodiak autonomous truck hauling Charger Logistics freight on the Dallas-Laredo lane in Texas at a warehouse dock

Kodiak AI and Charger Logistics have launched autonomous freight service on the 435-mile lane between Charger’s terminals in Dallas and Laredo, Texas, the companies announced Thursday. The trucks haul refrigerated and dry van freight for consumer packaged goods and food and beverage customers. The first delivery ran Sept. 8.

A safety driver is behind the wheel for now. The companies plan to move the lane to driverless operations once Kodiak completes its safety case.

Kodiak’s long-haul Autonomy Readiness Measure, which tracks the share of claims and evidence in that safety case, reached 96% at the end of Sept e mber. That was up from 93% at the end of August and 84% in February. The company plans to launch long-haul driverless service by the end of 2026 on its Dallas-Houston lane along Interstate 45. Its driverless trucks have operated in commercial service in the Permian Basin since December 2024.

Refrigerated and dry van freight to Laredo

Laredo is the highest-volume commercial land port of entry in the U.S., and the Charger lane is Kodiak’s first route serving it. The Port of Laredo handled more than $350 billion in international trade in 2025, nearly 40% of all U.S. trade with Mexico, according to the Kodiak press release.

Consumer packaged goods and food and beverage freight moves in steady, high-volume flows tied to retail replenishment schedules, Kodiak said, which makes predictable transit times and longer operating hours worth more.

Charger is an asset-based carrier operating in the U.S. and Mexico, with temperature-controlled freight among its core service lines. It runs its network on a proprietary transportation management system and a set of in-house applications.

“Autonomy lets us build a network that serves both our customers and our drivers,” said Andy Khera, president of Charger Logistics, in the announcement. “Combining our in-house TMS, managed transportation, and the Kodiak Driver creates a nearly fully automated ecosystem that gives our customers long-term capacity continuity through changing labor markets and freight demand, while bringing our drivers home every night.”

Expansion into Charger’s fleet

Under its Driver-as-a-Service model, Kodiak deploys the Kodiak Driver on trucks its customers own and operate. The companies expect to add lanes in Charger’s network over time as the carrier integrates the Kodiak Driver into its own fleet.

Charger also has an autonomous trucking agreement with Aurora Innovation on the same lane. Aurora announced in late July that Charger would deploy Aurora’s second-generation driverless trucks between Dallas and Laredo. That deal, reported in August, is a transportation-as-a-service agreement, under which Aurora holds the U.S. Department of Transportation operating authority, controls the truck and carries the insurance.

“Charger came to us knowing what they wanted from autonomy and what they need to see before scaling it,” said Don Burnette, founder and CEO of Kodiak. “The Dallas–Laredo lane extends the Kodiak Driver into a new corridor, and gives both companies the operating foundation we need to scale driverless service.”

Formal EO order on red dye diesel short on specifics

The executive order (EO) from President Donald Trump on implementing the red dye diesel tax break has been formally published, but it is thin on fixing a fundamental problem with the policy: state and federal rules are not in sync.

The executive order was published in the Federal Register Friday. It is just four pages in length.

After citing unspecified “historic efforts to ensure fuel affordability for our citizens,” the executive order says “it is clear that further temporary relief is necessary.”

The EO directs Secretary of the Treasury Scott Bessent to “use his authority to defer certain diesel fuel tax payment obligations.” Bessent also is to look at waiving penalties that might other be incurred for the use of red dye diesel in over the road applications.

Red dye diesel gets its name through the fact that it is red in appearance because a dye has been blended into it. The dye has no impact on its performance.

The dye is blended so that certain end uses, primarily agricultural, can consume red dye diesel and avoid paying the federal excise taxes of 24.3 cts/g. Federal excise taxes on diesel also include a 0.1 cts/g fee for the Leaking Underground Storage Tank Trust Fund Fee.

Break goes through December 31

The deferral period, if it is declared following a five-day review period, would be for October 5 through the end of the year.

But the goal is that the deferral be made permanent, so that the tax break for the remainder of the year ultimately would not need to be paid.

“The Secretary shall explore avenues, including legislation, to eliminate the obligation to pay the amounts deferred pursuant to the Secretary’s exercise of authority described in section 2 of this order,” the EO said.

But states have laws that prevent the consumption of red dye diesel on their respective roads. Wholesale and retail outlets are set up to provide a supply chain for non-dyed diesel which remains liable for the federal excise taxes, and that means they in only rare cases would have segregated tanks and pipelines that are targeted at red dye diesel.

The EO calls on the Treasury Secretary to “engage with State governments, relevant industry leadership as determined by the Administrator, and relevant labor organizations as determined by the Administrator to encourage safe and expedient coordination between the Federal Government and these various stakeholders in furtherance of the policies of this order.”

Some states already have acted

A wide range of states have changed their policies in recent weeks to allow red dye diesel on their roads. Texas, Indiana, Illinois, Nebraska, North Dakota, Ohio, Oklahoma, North Carolina, Arkansas and Alabama are all states that have made some sort of concession in their state rules to promote the use of red dye diesel and its lower cost.

But as has been noted by several critics of the red dye diesel policy, crossing from a state with a waiver into one that doesn’t have it is going to create a tax-paying nightmare for trucking companies. The extra bookkeeping effort may not be worth the tax break.

As Breakthrough Fuel said in a summary of the proposed change, after rating the impact from the tax shifts to be “low” at the retail level, it noted that “Highway lanes rarely carry dyed fuel, interstate routes cross non-relief states, and clear diesel pricing is unchanged by the order.”

The order also targets greater distribution by ordering the Treasury Secretary to “(coordinate) with agricultural cooperatives, rural fuel distributors, farm supply organizations, and other agricultural stakeholders, as determined by the Secretary of Agriculture, to ensure adequate distribution of dyed diesel for their use in high-demand areas.”

More articles by John Kingston

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Retailers say extended peak shipping season winding down

The peak shipping season for U.S. container imports is winding down after an unusually long stretch of elevated volumes through the summer and early fall, the National Retail Federation said.

The latest Global Port Tracker report, produced by NRF and Hackett Associates, indicates August was likely the busiest month of 2026, replacing September as the anticipated peak. Imports are expected to ease through the remainder of the year as retailers shift from stocking holiday merchandise to replenishing inventories and preparing for early 2027.

“Even with any fluctuations in final data, we’re likely past the busiest part of the year,” said Jonathan Gold, NRF’s vice president for supply chain and customs policy. “The truth is that the peak season started early and was stretched out through the summer and early fall, with the difference from month to month often amounting to little more than a rounding error.”

Ports covered by Global Port Tracker handled 2.3 million twenty-foot equivalent units in August, the latest month with finalized figures. That was up 0.4% from July but down 0.7% from August 2025.

The trade group lowered its September forecast to 2.28 million TEUs from the previously projected 2.31 million. The revised estimate would still represent an 8.2% increase from a year earlier. October imports are forecast at 2.25 million TEUs, up 8.5% year over year, before declining to 2 million TEUs in November.

Hackett Associates founder Ben Hackett said imports have been bolstered by robust consumer spending despite weakening economic indicators, declining consumer confidence and increasing inflation.

The projections point to a gradual retreat from summer highs rather than an abrupt drop in cargo demand. Despite the expected month-to-month slowdown, September and October volumes would remain above their year-earlier levels.

Gold said most holiday merchandise has already arrived, with “last-minute replenishment and preparation for early 2027” driving shipments for the balance of the year.

The retailers forecast full-year imports at the ports covered by the report at 25.8 million TEUs, up 1.4% from 2025.

Read more articles by Stuart Chirls here.

Global container volumes hit record 17.46 million TEUs

Samsung seeks $186M from CMA CGM in container charges dispute

Zim lifts profit forecast 72% on strong demand

New submarine plant planned at Baltimore multimodal hub

Walmart activates automated e-commerce logistics center in California

Aerial view of a huge Walmart distribution center with clear blue sky in the background.

Walmart has officially opened its fifth high-tech fulfillment center.

The 900,000 square foot facility, located in Stockton, California, expands capacity for processing online orders and the ability to provide faster shipping and delivery for customers across the West Coast, the retailer announced on Thursday.

Walmart Fulfillment Services, the company’s end-to-end third-party fulfillment service, will also leverage the space to fulfill items sold by merchants on Marketplace.

The next-generation e-commerce center features advanced automation, technology and AI-powered systems to move products more efficiently. A high-density storage and retrieval system reduces the traditional 12-step fulfillment process to five steps, reducing repetitive, manual tasks while allowing Walmart (NASDAQ: WMT) to move products throughout the building more efficiently, resulting in increased storage and order capacity compared to a traditional fulfillment center.

Walmart said the facility’s location in California’s Central Valley adds significant fulfillment capacity closer to West Coast customers, helping the company offer faster shipping options on millions of items and taking pressure off other fulfillment centers in its network.

Walmart operates four other next-gen fulfillment centers in Joliet, Illinois; McCordsville, Indiana; Greencastle, Pennsylvania; and Lancaster, Texas. They are located in strategic markets to enable next-day or two-day shipping to 95% of the U.S. population, according to the company.

E-commerce sales now represent 23% of total sales at Walmart. The company says faster delivery helps motivate customers to place orders.

In August, it announced plans to build a sixth ultra-modern e-commerce logistics hub, covering 1.5 million square feet, in Carnesville, Georgia. Construction is expected to begin towards the end of the year. Walmart said its total investment in the project, which includes hiring, will be $1.3 billion.

Both the Stockton and Carnesville location will employ more than 1,000 workers at full operation.

Why It Matters: Walmart is competing with Amazon, Target and other retailers for online sales and fast fulfillment capability helps motivate customers to complete digital checkouts.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Fake freight broker redirects $273K seafood shipment in New Jersey cargo theft attempt

A truck driver followed instructions from someone impersonating a freight broker, placing more than $273,000 in frozen seafood at risk. The unauthorized diversion brought approximately 29,000 pounds of cargo to North Arlington, New Jersey, on October 3. Two individuals began moving pallets from a refrigerated tractor-trailer into a smaller box truck. Police arrived before the suspects could remove the shipment from the area.

North Arlington officers responded to Porete Avenue following a report of suspicious activity involving commercial freight. They discovered an active transfer between two vehicles at the location. The merchandise included frozen shrimp, salmon, conch meat and branzino. The cargo remained at the scene while investigators examined the circumstances surrounding the attempted theft.

Fraudulent calls and texts redirect the driver

According to the North Arlington Police Department, the truck driver received telephone calls and text messages before arriving. The sender falsely claimed an association with the legitimate freight broker responsible for the shipment. Those communications instructed the driver to divert part of the load for a supposed transfer. Following those directions brought the refrigerated trailer to an unauthorized location.

Jonathan Pollaguari, 18, of the Bronx, New York, arrived alongside a juvenile in a 26-foot box truck. Both individuals began transferring pallets of seafood into their vehicle. Questions about the transaction’s legitimacy emerged while the activity continued. A subsequent investigation established that the person directing the diversion had no affiliation with the actual brokerage.

Authorities determined that the unidentified individual impersonated a company representative to fraudulently obtain the merchandise. Officers secured the scene and stopped further movement of the products. Their intervention prevented the suspects from leaving with the cargo.

Police recover shipment and arrest two suspects

North Arlington officers took Pollaguari and the juvenile into custody without incident. Investigators recovered the entire seafood shipment before either suspect could leave the scene. Frozen shrimp accounted for the primary commodity, alongside several other varieties. Police documented the attempted theft and announced criminal charges following their investigation.

Authorities charged Pollaguari with second-degree theft by deception, false representation and conspiracy. He also faces a first-degree charge involving the employment of a juvenile in committing a crime. Officers issued additional motor vehicle summonses for driving without a license and operating an uninsured vehicle. Another citation involved failure to possess an insurance card.

Investigators have not disclosed how the suspects obtained shipment information or who coordinated the fraudulent communications. Authorities also have not identified the legitimate broker, carrier or shipper involved. Questions remain about what initially raised suspicion and prompted police intervention. The investigation remains active, with officials declining to release further details.

Why It Matters

Criminals impersonating trusted freight brokers can redirect high-value shipments without ever taking control of the truck. This case highlights why carriers must independently verify unexpected delivery changes before following instructions.

CFCO

In my opinion, this case demonstrates why verification cannot stop once a carrier accepts a load. The Certified Fraud Compliance Officer (CFCO) course teaches transportation professionals to recognize suspicious activity and challenge unexpected instructions. A legitimate driver can unknowingly participate in cargo theft when criminals impersonate trusted contacts. Training helps establish consistent procedures for confirming shipment changes before freight reaches the wrong hands.

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

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

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

A convenient time for a vacation, indeed

How a truck driver gets stopped for inspection

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

Time to start inspecting in the winter

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

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

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

The ‘everything shortage’ endures

Watch: Central Freight Lines’ impact on the LTL market

Central Freight Lines statement

Brief history of Central Freight Lines

Driver with clean record allegedly rejected

Insurance provider remains unverified

EEOC seeks damages and changes to hiring policies

Nearly 100 fulfillment locations

Two hires from public companies

Refrigerated and dry van freight to Laredo

Expansion into Charger’s fleet

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Fraudulent calls and texts redirect the driver

Police recover shipment and arrest two suspects

Why It Matters

CFCO