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

truck fallen over

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convenient time for a vacation, indeed

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

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

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

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

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

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

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

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

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

How a truck driver gets stopped for inspection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Time to start inspecting in the winter

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

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

FREIGHTWAVES: That makes sense.

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

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

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

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

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

Why the Northeast is quietly running out of diesel

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

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

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

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

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

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

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

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

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

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

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

Here’s a breakdown:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ‘everything shortage’ endures

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

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

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

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

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

Exclusive: Central Freight Lines to shut down after 96 years

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

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

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

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

Kalem agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Watch: Central Freight Lines’ impact on the LTL market

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

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

Central Freight Lines statement

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

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

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

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

Brief history of Central Freight Lines

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

Warehouse cramming is about to begin — Freightonomics

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

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

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

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

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

Seasonality pushing rejections and rates higher ahead of the Fourth

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

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

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

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

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

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

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

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

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

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

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

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

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

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

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

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

Tender rejections: Absolute level and momentum positive for carriers

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

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

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

SONAR: Capacity Trend Market Score (Carriers – VAN)

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

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

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

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

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

Freight rates: Absolute level and momentum positive for carriers

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

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

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

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

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

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

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

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

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

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

SONAR: IJC.USA

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

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

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

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

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

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

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

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

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

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

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

Project44 acquires ClearMetal to strengthen predictive tools

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

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

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

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

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

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

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

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

Click here for more articles by Grace Sharkey.

Related Articles:

Project44 expands real-time visibility into China

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‘Project44’s vision has always been global’

New legislation could upend truck broker margins

damaged truck being towed

WASHINGTON — New legislation threatens to transform the way truck brokers do business, replacing voluntary vetting practices with a stiff federal penalty for contracting “unsafe” motor carriers.

Introduced by U.S. Rep. John Moolenaar, R-Mich., the Patrick and Barbara Kowalski Freight Brokers Safety Act aims to improve roadway safety by holding freight brokers directly accountable for the safety records of the trucking companies they hire.

The bill is named after the parents of Shannon Mertz, who were killed in a crash involving a trucking company that had several safety violations.

“Companies, like the one involved in my parents’ accident, must be held accountable,” Mertz said in a statement. “My family and I are thankful for Congressman Moolenaar’s responsiveness and efforts to prevent another family from experiencing the heartbreak we have felt.”

Specifically, the bill mandates a 10% surcharge on contracts with trucking companies that have three or more Department of Transportation violations within a five-year period. It would also grant the Federal Motor Carrier Safety Administration unprecedented authority to investigate freight brokers and impose operating requirements after fatal crashes.

For the brokerage sector, the legislation represents a move toward federalizing accountability for safety, and could radically shift how commercial freight is assigned and priced.

If passed, the measure could have a sizable impact on smaller brokers who may struggle with the data-intensive requirement to track every carrier’s violation history over a five-year rolling period.

FreightWaves has reached out to the Transportation Intermediaries Association (TIA), which represents freight brokers, for comment.

TIA has spent nearly a decade lobbying for standardized fitness legislation to counter conflicting standards that brokers face in court following highway accidents.

The Motor Carrier Safety Selection Standard Act, reintroduced in September, requires that brokers and shippers contract only with trucking companies registered with FMCSA, hold a valid operating authority, and meet the required insurance thresholds.

It also directs FMCSA to create a public-facing website confirming which carriers meet these requirements.

But while the TIA-backed legislation aims to clarify when a broker has done enough to ensure a carrier is safe, the Kowalski Act focuses on holding brokers directly accountable for the actual safety history of the companies they choose to employ.

Both bills reflect a push to define federal broker responsibilities, which have been less defined compared to those of motor carriers.

Click for more FreightWaves articles by John Gallagher.

Canada Post, mail carriers tentatively agree on labor deal

A red-white-and-blue Canada Post truck on a city street, with the driver unloading from the rear.

Canada Post and the Canadian Union of Postal Workers on Monday announced they have reached a tentative labor agreement that will be presented to more than 50,000 mail carriers for a vote. The production of finalized contractual language comes one month after the sides signed a framework agreement on how to settle a protracted collective bargaining dispute, which included two strikes and other work slowdowns, centered on how to restructure the financially troubled national post.

The five-year contract includes wage increases, enhanced benefits and the initiation of weekend parcel delivery, which Canada Post says is necessary to better compete with private carriers. According to CUPW, the agreement does not include Canada Post demands for dynamic routing and load leveling. 

Canada Post argued it needs a flexible business model to compete in an environment of less mail demand and alternative parcel carriers. Dynamic routing would have allowed the corporation to plan and optimize delivery routes based on volumes, delivery addresses and pickup requests. The national post also wanted the ability for supervisors each morning to transfer mail volumes between carriers during scheduled hours to even their workloads rather than having each carrier work the same fixed routes.

CUPW leadership will manage the union ratification process, with voting to begin in the new year

“Postal workers have put up an enormous fight over the past two years. But in the face of repeated attacks from a federal government intent on stripping us of our rights to collective bargaining and an employer that wanted to gut our collective agreements, we stood strong,” the union’s lead negotiators said in a membership message. 

The agreement includes a 6.5% wage increase in year one and 3% in year two, with further increases tied to the annual inflation rate, enhanced health and worker compensation benefits, and enhanced job security protections for rural carriers.  

On Friday, CUPW National President Jan Simpson said “we will keep pushing back against service cuts, the austerity agenda and advocate for a future that respects postal workers and the important services we provide.”

She pointed to a recent report from the Canadian Center for Policy Alternatives that advocated for investment over retrenchment. Drawing on data from the Universal Postal Union, the report said the world’s most successful post offices often have diversified businesses and that aggressive cost-cutting measures, like post office closures, are counterproductive.

Click here for more FreightWaves stories by Eric Kulisch.

Sign up for the biweekly PostalMag newsletter The Delivery here. 

Canada Post, largest union announce tentative contract agreement

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Ocean rates: New Year promises a good ‘blanking’ for US East Coast

Ocean container rates got a pre-holiday bump in the latest week’s data as inbound Asia traffic continues to run stronger to the East Coast while carriers look ahead to the New Year for improvement on the West Coast.

Asia-West Coast spot rates for the week ending Dec. 14 climbed $366, or 21.3%, to $2,086 per twenty foot equivalent unit on capacity that was broadly steady, up less than 1% to 301,668 TEUs, according to analysts Xeneta and eeSea. That put rates narrowly higher from November, up $45 or 2.2% as capacity fell by 7% or 22,734 TEUs. Rates were only ahead $100, or 5%, as capacity fell by 0.4% from December 2024.

Approximately 40% of global container traffic moves under spot rates, when shippers require capacity on short notice, or when cargo is rolled, or bumped, from a previously scheduled service. In a weak market, spot pricing can offer leverage for cargo owners looking to negotiate better long-term deals with carriers. 

On the East Coast, weekly spot rates gained $463, or 18.4%, to $2,982 per TEU as capacity swelled by 12,556 TEUs, or 7.2%, to 186,898 TEUs. Rates increased $236, or 8.6% month-on-month, as capacity rose by 12,913 TEUs, or 7.4%. Since Dec. 1 rates are better by $136, or 4.8% on capacity that added 15,792 TEUs, up 9.2%.

Xeneta noted many departure delays out of the East Coast, which pushed offered capacity into the next week.

“Capacity offered from Far East to U.S. West Coast is expected to increase 10.4% in January compared to December, with blanked capacity decreasing 48.5%,” said Peter Sand, chief analyst for Oslo-based Xeneta, in a research note. “It’s a different story into the U.S. East Coast with 162,219 TEUs of blanked capacity announced for the next eight weeks. 

“There is a distinct difference in the services offered into U.S. East Coast and U.S. West Coast and the way carriers are managing capacity. This is motivated by underlying stronger demand into the East Coast, with the West Coast more sensitive to U.S.-China geopolitical tensions.”

Separately, the North Europe to U.S. East Coast rate for the week was unchanged at $1,566 even as capacity fell by 3,081 TEUs, or 6.2%,  to 46,773 TEUs. Since November, rates were slightly lower by 1.2% despite capacity that tumbled by 21.8% or 13,047 TEUs. Rates sank by 1.1% y/y as offered capacity slipped by 6.9%.

On Asia-Mediterranean trade routes, rates climbed 18.9%, 38% and 18.4% for the week, month and year on capacity that grew 7.4%, 8.6%, and 26.1%.

Indications are that contract negotiations on Europe trades have already begun. 

Average departure delays on trades from Far East to Europe reached 12.5 days for the week ending Dec.14, the second-highest level in three years, pushing many expected departures into the following week.

“These delays are not caused by carriers blanking sailings, it’s about port congestion and operational inefficiencies,” said Sand. “Shippers need to be on top of this and manage the risk of congestion and the potential for containers arriving later than expected.

“If shippers are looking to move back to just-in-time supply chains in 2026 after a just-in-case approach during the tariff chaos of 2025, they need to manage this risk and ask carriers to deliver on their promises.”

Maersk (MAERSK-B.CO) and Hapag-Lloyd (HLAG.DE), which have trumpeted the schedule reliability of their Gemini cooperation, earlier announced premium pricing for on-time delivery. Market sources indicate the Premier Alliance lines of Ocean Network Express (ONE), Hyundai Merchant Marine (HMM) and Yang Ming are also considering Gemini-like pricing.  

Find more articles by Stuart Chirls here.

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Stord to double e-commerce fulfillment capacity in Kentucky

An overhead view of the inside of a large e-commerce warehouse.

Stord, a provider of turnkey e-commerce fulfillment services and logistics technology, has committed $40 million over five to 10 years to expand and modernize its largest shipping center, located in Hebron, Kentucky, to keep up with growing demand for online shopping.

Stord gained ownership of the 520,000-square foot Hebron facility in 2024 with the acquisition of Pitney Bowes’ e-commerce fulfillment business. The facility is the largest warehouse in Stord’s network and ships more than 5 million packages annually. It includes significant climate control storage, a pick mezzanine with 120,000 square feet of extra space, pallet racking and robotic automation.

Atlanta-based Stord said Thursday it will lease a 525,000 square foot warehouse with 49 dock doors capable of offering a comprehensive suite of value-added services for brands, including kit assembly and embroidery. The facility is located near two interstate highways and Cincinnati-Northern Kentucky International Airport, where Amazon and DHL Express have their primary U.S. air transport hubs and other freight airlines operate. The company also plans to outfit the building with automated handling equipment, proprietary AI-capable warehouse and transportation management systems, and other capabilities. 

The current Hebron fulfillment center is operated by more than 300 employees and 300 contractors. Stord said order processing there during the Black Friday-Cyber Monday period doubled year over year. 

Stord, which calls itself the Consumer Experience Company, was founded in 2015. It supports hundreds of direct-to-consumer and B2B brands, including Seed Health, Native, Jolie (shower filter), Quip (oral wellness), True Classic and Goodr (sunglasses) with $10 billion in annual gross merchandise value. Stord says it delivered more than 30 million packages to around 11.5% of U.S. homes last year.

In 2025, Stord raised $200 million in funding, created a partner network of outside e-commerce technology providers and acquired Ware2Go, an on-demand warehousing and fulfillment network, from UPS. 

It recently acquired Penny Black, a startup software-as-a-service solution that provides hyper-personalized post-purchase inserts to enhance a brand experience and generate new revenue. With Penny Black, brands can easily provide specific product recommendations, unique coupon codes, custom videos, gift messages or more addressed to an individual consumer based on marketing data and purchase history. The personalized inserts are printed on-demand at pack stations to give a differentiated experience when the customer opens the box. 

The U.S. retail e-commerce market was valued at $1.2 trillion in 2024 by eMarketer and is expected to reach about $1.8 trillion in 2027. Revenue growth has stabilized at about 12% per year following a spike during the Covid crisis.

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

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Commentary: How the FMCSA should investigate truck driving schools

driver trainer

The Federal Motor Carrier Safety Administration’s purge of 3,000 fraudulent truck driver training schools from its Training Provider Registry (TPR) a few weeks ago was welcome news. The TPR was created just a few years ago to register all truck driver training providers who could fulfill the new Entry Level Driver Training rule (ELDT), which was supposed to establish a benchmark or floor for basic truck driver training for new commercial drivers license (CDL) holders.

Unfortunately, as FreightWaves has shown, the ELDT rule was gutted before it became law, and truck driving schools essentially ‘self-certified’ with very little oversight from the FMCSA. There was no required minimum driving time specified in the training; no facilities would ever be inspected by the FMCSA; there was no verification of driving instructor qualifications or credentials. 

Truck driver training schools don’t even have to assert that they trained the driver, rode with him, tested him on specific material, completed an obstacle course, ride along, or anything like that—they merely have to verify that the new driver is ‘proficient’, and they don’t have to say why they think that.

The result was an explosion of ‘truck driver training schools’; the TPR filled up with more than 35,000 so-called schools in less than 3 years. Concerned citizens perusing the TPR’s database of truck driving training schools will find these critical vocational training institutions housed in tiny rural churches, random P.O. boxes, and questionable-looking apartments.

Where to start?

There are numerous angles by which the FMCSA could further investigate truck driver training schools for fraud and shut them down. One preliminary filter could just examine the geographical space of the training provider’s listed address to determine if it can even accommodate commercial vehicles. Truck driver training schools that are clearly personal residences could trigger a further inquiry and review.

But that approach—looking at the physical characteristics of the truck driver training provider—might not be the most effective. Many of these schools were likely transient, popping up to take care of a fleet or a few fleets’ temporary needs; they may not have signed off on many drivers’ ELDT requirements and may not be actively ‘training’ drivers. Shutting them down would have little effect.

FreightWaves has obtained documents from one truck driver training provider’s efforts to get better data from the FMCSA on the Training Provider Registry. 

On August 7, 2024, 160 Driving Academy, a well-known truck driver training provider that offers training at locations throughout the United States, filed a Freedom of Information Act (FOIA) request with the FMCSA’s FOIA Officer Jennifer Weatherly.

The premise was simple: 160 Driving Academy wanted the FMCSA to analyze its truck crash fatality data and find the truck driving schools that were listed as fulfilling the ELDT requirement for the CDL holders involved in the crashes.

Here’s the substance of 160 Driving Academy’s request for data:

“In 2022 according to the NHTSA, there were roughly 6,000 heavy truck fatalities in the United States. For each heavy truck driver fatality in the U.S., please provide all information concerning the training provider that electronically submitted the driver’s certification information into the TPR, including the following: (a) the identity of the driver’s training provider; (b) the completion and certification date of the driver’s ELDT; (c) the driver’s training location (city and state); and (d) the license type(s) for which the driver was certified.”

FMCSA FOIA Request 8 7 24Download

Instead of creating new criteria like the geographical characteristics of the training facility itself, or trying to retroactively require instructor credentials, 160 Driving Academy proposed that the FMCSA go straight to the root of the problem: fatal accidents. Find the truck driving training schools that are associated with the most fatalities, and investigate those schools first to make sure they adhere to strict standards.

One could imagine eventually analyzing the entire Training Provider Registry for ‘quality’ by dividing the number of accidents or fatal accidents associated with a particular training provider by the total number of CDLs endorsed by that provider. That kind of analysis would provide a comprehensive overview of the landscape of truck driving schools, but it isn’t necessary to begin with. First, the FMCSA should take a hard look at training providers linked to a high number of fatalities and remove any deficient providers from the TPR immediately.

FMCSA buried the FOIA request

Biden’s FMCSA took no action on 160 Driving Academy’s FOIA request; instead, they hemmed and hawed. According to Steve Gold, founder and CEO of 160 Driving Academy, first the FMCSA said that “couldn’t produce [the data] as it was too complex,” then the agency delayed fulfilling the request at least two times before blowing it off.

The current administration has the opportunity to do the right thing and attack the fraudulent truck driver school problem in the most effective way possible, by finding the sources of the most dangerous drivers on the highway.

We know the FMCSA has the fatal accident data with CDL numbers attached. We know the FMCSA has Entry Level Driver Training rule data, with registered truck driver schools attached to every CDL issued after February 2022. The FMCSA should do the work of connecting its own data so that it can precisely target the most problematic truck driver training providers.

The next step would be to beef up the ELDT rule to include standards for what truck driver training should look like: specify the material covered in written tests; require a certain number of hours of in-cab instruction; require the demonstration of specific skills before passing. 

For now, the FMCSA is busy cleaning up the mess left by the previous administration. We hope they act quickly, in the name of public safety.

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Benesch panelists: Why 2026 could be a strong year for logistics M&A

New York–Ron Lentz is the managing partner of Logisyn Advisors, a logistics merger and acquisition advisory firm. And he recently had two widely divergent views of the year that is about to end and the one that is coming up.

At the annual Benesch Investing in the Transportation & Logistics Industry Conference here earlier this month, Logisyn said of 2025, “I almost can’t give away asset-based trucking companies this year. It’s been a very, very, very difficult year for asset-based trucking, and that doesn’t make a difference if it’s asset-based trucking with transportation brokerage along with it. I can’t do it.”

Lentz did talk about various strong points in the logistics M&A market this year. But it was looking toward 2026 that the talk of a “very, very, very difficult” market turned far more positive.

“I think it’s going to be a banner year,” Lentz said on the Benesch panel entitled M&A Outlook 2026. “There’s way too much capital out there.”

Lentz noted that the room at the conference, sponsored by the transportation practice at the Benesch law firm, was populated with people who “have either just raised a new fund or are in the process of raising a fund. So from the sponsor point of view, there’s a ton of capital and they’ve got to spend that capital.”

The one-day conference, always held in New York in early December, isn’t lengthy; it starts not long before lunch and ends before a round of evening libations. But if a person is a mover and shaker in the logistics M&A field, he or she is likely to be in attendance.

Lentz was likely the most optimistic voice heard from the stage about the M&S outlook next year. Besides private equity raising funds for acquisitions, Lentz said, “strategic” buyers, who often are publicly-traded companies, “have a ton of cash sitting on their balance sheet.”

(A similar theme was heard at the 2024 edition of the conference). 

Organic growth next to impossible

And he noted another sobering factor in a market well into another year of freight recession: growing a business is a challenge. “It is next to impossible to grow your business organically, so the next best option is through acquisitions,” Lentz said.

The size of multiples in deals that are getting done, he said, are “inching” up. “They’re not going to dramatically go up,” he said, adding that “I think the activity is there.”

Richard Holohan, on the same panel as Lentz, said the freight recession had made reaching a consensus on company valuations a tough task. “But I think in the last six to nine months, we’ve kind of gotten past a lot of those dislocations, and that’s unleashed a lot of activity,” he said.

Tariffs make one type of brokerage a desired acquisition

Both Lentz and Ryan Cech, the chief strategy officer of the Imperative Logistics Group, said customs brokerages and freight forwarders have been hot items in the logistics M&A landscape, as they are designed to help importers or exporters work their way through the tariffs maze.

“We spent a lot of time in the last year looking at customs brokers,” Cech said on the same panel as Lentz. “They’re certainly having a moment in that tariff environment.” Their skills, Cech said, enable an importer to “appropriately classify import documentations,” which can often result in lower tariffs. “That’s a value added service these days and can solve a very acute pain point for shippers,” Cech said.

While the fog of tariffs may have helped customs brokerage and similar areas of expertise, Cech made clear it has not been a boon overall to the logistics M&A field. 

“There were some investment committees that were hesitant to deploy capital in such an uncertain environment,” Cech said. The worst of that has probably passed, he said. But that doesn’t mean there won’t be an impact.

“Once the dust settles, it will just be different,” Cech said. 

If the dust has settled, Cech said he sees an industry that might be ready to see heavy M&A action.

Benesch co-chair of the transportation group Marc Blubaugh kicks off the conference.
NYCCORPORATEEVENTPHOTOGRAPHER.COM | LANA DUBKOVA

On the sell side, he said, are owners and founders who have been waiting several years for a freight market to turn around. But it hasn’t, and it may not happen next year. Their conclusion, Cech said, might be to say “you know what, now is the time” and go ahead with a sale.

Holohan expressed a similar sentiment. “Some transactions are often driven by something more powerful than the market cycle,” he said. “It’s often succession.”

If it’s a family business being sold, “those drivers of that type of transaction typically outweigh where the spot rate for truckload at this very moment, so that part of the market has been fairly stable.”

On the buy side, Cech echoed Lentz in that the inability to grow organically may be a spur to more deals.  “The financials have been flat for the last three years,” he said. “So you have buyers that have had lackluster growth and they are seeking to pursue M&A as a growth alternative.”

Now what?

If some of those sellers are founders, it can present a separate set of issues. The post-acquisition landscape was discussed in a separate panel that asked the question “Now What?” following the consummation of a deal.

Rebecca White, executive vice president of strategy and corporate development at KAG, said about three-quarters of the transactions the company does “are with owners who say the reason for the sale is they are retiring.” (KAG describes itself on its website as the “largest tank truck transporter and logistics provider in North America.”)

“We like for them to stick around for a transition,” White said. That period is usually six to 12 months, she added, “and they are usually very open to doing that.”

Sometimes the temporary bridging period works out better than expected. Those founders, White said, might say “things are going pretty well. I think I’m really going to stick around.” She added that “it’s been an interesting aspect” of some acquisitions. 

But that’s the founder. Spencer Tenney, president of the Tenney Group, a merger & acquisitions advisory group, said the management team of an acquired company also is a concern. He discussed a recent recapitalization of a company steered by the Tenney Group that also allowed the simultaneous promotion of four managers. 

“Every employee wants to know, how is this going to affect me, good or bad?” Tenney said. But in the transaction he discussed, Tenney said the steps taken by the private equity company involved in the deal to elevate the four executives “set up that transaction for a generation of success.”

Given that any sort of sale always comes with the fear of layoffs and job losses, Tenney said it’s notable that he’s been seeing “a little bit more restraint as it relates to eliminating some of the head count.”

“Rather than just taking a machete to it all, I think buyers are just taking a few extra months to understand who’s actually doing the work, what should we actually eliminate, and who are some of the best players that we want to be part of the future,” Tenney said. “They’re being a bit more long-term focused on how they integrated to maximize success.”

More articles by John Kingston

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STB asks comments on ‘completeness’ of rail merger application

Looking for something to do over the Christmas holiday? The Surface Transportation Board has a suggestion.

The rail regulator announced that comments on the completeness of that 7,000-page application are due by Monday, Dec. 29, 2025.

Because the application is classified as a major transaction under Board regulations, it must include substantial supporting information (detailed in the Board’s regulations at 49 C.F.R. part 1180).

We’ll help you start. While UP (NYSE: UNP) is acquiring NS (NYSE: NSC) for $85 billion, the STB is calling the transaction a merger.

The railroads have an opportunity to respond to the comments until Jan. 2. Should the board accept the application, comments on the merger itself will be solicited at a later date.

For more information and to see the application, the board has posted a UP-NS Merger Resources Page.

Subscribe to FreightWaves’ Rail e-newsletter and get the latest insights on rail freight right in your inbox.

Find more articles by Stuart Chirls here.

Related coverage:

UP, NS: Merger will create 10,000 single-line service lanes, shift 105k truckloads to rail

BNSF CEO: Rail merger still a “significant threat” to economy, consumers

Union Pacific and Norfolk Southern file historic rail merger application

‘Application day’ nears for UP-NS rail merger

Borderlands Mexico: U.S.–Mexico trade stays dominant in September, tops $71B

Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: U.S.–Mexico trade stays dominant in September, tops $71B; Maersk opens $15M depot near Port of Manzanillo; and Wayside Distribution Center aims to boost Houston supply chains.

U.S.–Mexico trade stays dominant in September, tops $71B

Mexico ranked as the United States’ largest trading partner in September, reinforcing its central role in North American supply chains despite tariff uncertainty and shifting global trade dynamics.

Total trade between the U.S. and Mexico reached about $71.8 billion during the month, outpacing trade with Canada and China, according to Commerce Department data. 

Mexican exports to the U.S. totaled $44.6 billion, while U.S. exports to Mexico reached $27.2 billion, making Mexico the top destination for U.S. goods for a second consecutive month.

On a year-to-date basis through September, cumulative U.S.–Mexico trade climbed to roughly $653 billion, keeping Mexico ahead of Canada and China as America’s largest overall trading partner. 

Analysts attribute the sustained strength to deeply integrated automotive, electronics and energy supply chains under the USMCA, as well as continued nearshoring that favors shorter, truck-heavy logistics routes.

The trade dominance is showing up most clearly at land ports. Port Laredo ranked as the second-busiest U.S. gateway for international trade in September, trailing only Chicago O’Hare International Airport, according to WorldCity analysis of U.S. Census Bureau data.

Laredo handled $29.6 billion in trade during the month, driven largely by truck traffic tied to Mexico-U.S. manufacturing and distribution lanes.

Trucking-dependent commodities such as motor vehicle parts, engines, electronics and industrial machinery continued to dominate volumes moving through the Laredo border complex, underscoring how road freight remains the backbone of U.S.–Mexico trade.

Maersk opens $15M depot near Port of Manzanillo

Global logistics provider A.P. Moller–Maersk has opened a new container depot in Manzanillo, Mexico, investing more than $15 million to strengthen logistics connectivity across the Americas, according to a news release. 

The 333,681-square-foot facility is located about 3-miles from the Port of Manzanillo, Mexico’s busiest container gateway, which handles nearly half of the country’s containerized cargo.

Maersk has opened a 333,681-square-foot logistics facility located about 3-miles from the Port of Manzanillo, Mexico’s busiest container gateway. (Photo: Maersk)

The depot has capacity for 6,018 twenty-foot equivalent units and includes 50 reefer plugs, repair facilities, shunting services and transloading capabilities designed to reduce port congestion and improve first- and last-mile efficiency. Maersk said the site will support faster cargo flows from Asia into Mexico’s industrial regions, including the Bajío and central corridor, while reinforcing supply chain resilience amid rising regional trade demand.

Wayside Distribution Center aims to boost Houston supply chains

Provident Industrial has closed on the Wayside Distribution Center, a planned 157,300-square-foot Class A logistics facility in Houston’s South submarket. 

The transaction, finalized in November, adds modern distribution capacity in a corridor closely tied to port, airport and regional freight flows, Provident Industrial said in a news release.

Terms of the transaction were not disclosed. 

Located near Beltway 8, Highway 288 and I-610, Wayside Distribution Center is positioned to support faster regional distribution and last-mile efficiency, with proximity to Hobby Airport, Port Houston and major population centers. 

Dallas-based Provident Industrial is a privately held real estate and investment firm; and has developed or invested in over $6 billion in real estate projects nationwide. 

Inventory management strategy shifts once again

Chart of the Week:  Inbound Ocean TEUs Volume Index – USA, Logistics Managers’ Index – Warehouse Utilization SONAR: IOTI.USA, LMI.WHUT

Imports and inventory levels have declined this fall, potentially signaling another shift in supply chain management practices. While nothing is certain, this evolution in order management only increases the value of transportation services.

Looking back over the past five years of import bookings (IOTI) and warehouse utilization figures reported by the Logistics Managers’ Index (LMI), we can identify five distinct periods.

The first period began during the pandemic, marked by widespread over-ordering as the supply of goods was unable to keep pace with demand. Neither production nor transportation networks could accommodate the surge in stay-at-home spending.

The second period was characterized by severe destocking as goods consumption slowed and consumers redirected spending toward travel and entertainment outside the home. This phase lasted from late 2022 through roughly mid-2023.

This was followed by a brief period in which businesses and consumers appeared to settle into a more stable and predictable economic and geopolitical environment. However, in late 2023, escalating tensions in the Middle East led to significant disruptions across global trade routes. In response, shippers once again increased inventory levels and extended order lead times.

The return of trade war dynamics and erratic trade policy implementation further exacerbated and prolonged this behavior into late 2025. Now, with little opportunity left to pull inventory forward, the market appears to be shifting once again—this time toward leaner inventories, though not excessively so.

“Uncertainty” was among the most frequently used terms to describe the U.S. economy this year. Meanwhile, inflation has compounded over several years, leading many economists to anticipate a period of stagflation—an environment defined by low growth and elevated inflation.

This is an especially challenging moment for supply chain professionals, who are being asked to simultaneously contain costs and support revenue growth. That requires ordering just enough inventory while remaining agile enough to respond quickly if demand shifts higher or lower. Predictability remains critical for effective cost management.

Leaner inventories increase the value of transportation services, as fewer buffers are available within the supply chain. The caveat is that if demand weakens further, shippers could once again find themselves overstocked.

There are already signs that transportation service costs are being held at unsustainable levels. Tender rejection rates are averaging 1–3 percentage points higher than last year (excluding this past month) and spot rates are spiking more quickly and to higher levels in response to seasonal pressures. If shippers become understocked and miss revenue opportunities due to insufficient inventory, the market could be in for a turbulent 2026.

About the Chart of the Week

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

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