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’

Freight distress spreads as bankruptcies, layoffs top 600 jobs

Several trucking and logistics companies sought bankruptcy protection over the past week, as several transportation and logistics companies also announced facility closures and layoffs across the U.S.

The bankruptcies and layoffs reflect continuing financial challenges facing transportation providers despite significant improvements to the freight market.

The latest filings include a mix of Chapter 11 reorganizations and Chapter 7 liquidations involving trucking carriers, freight brokers, logistics consultants and transportation service providers operating in Illinois, Tennessee, Maryland, North Carolina and Michigan.

Wisconsin-based Sparhawk Trucking Inc. and Sparhawk Truck and Trailer Inc. recently issued a notice warning employees of potential layoffs or a possible closure as the companies seek a buyer through bankruptcy proceedings.

According to FMCSA records, Sparhawk Trucking operates 178 trucks and employs 146 drivers. Company officials said no final decisions have been made but cautioned employees not to assume the business will remain open.

Park Ridge, Illinois-based SP Trans Inc., a long-haul truckload carrier that filed for protection in the Northern District of Illinois on Tuesday. The carrier reported assets and liabilities between $500,000 and $1 million and listed between one and 49 creditors. Federal records indicate the company operated with 13 drivers and remained an active motor carrier as recently as May.

Durham, North Carolina-based SB Hauling & Crane Services LLC also filed for Chapter 11 protection on May 29 in the Middle District of North Carolina. The company specializes in construction hauling, crane services and debris removal and operates primarily in the Raleigh-Durham region.

M&L Express LLC, a Hagerstown, Maryland-based long-distance trucking company, filed for Chapter 11 protection on May 29. Federal records show the carrier historically operated a fleet of nine tractors and accumulated more than 1 million annual miles.

Bankruptcy roundup chart

Company	Location	Bankruptcy Type	Filing Date	Industry	Assets	Liabilities
SP Trans Inc.	Park Ridge, IL	Chapter 11	June 2, 2026	General freight trucking	$500K-$1M	$500K-$1M
SB Hauling & Crane Services LLC	Durham, NC	Chapter 11	May 29, 2026	Specialized trucking/crane services	$100K-$500K	$100K-$500K
M&L Express LLC	Hagerstown, MD	Chapter 11	May 29, 2026	Long-distance trucking	$500K-$1M	$500K-$1M
DZS Enterprise Services LLC	Wayne, MI	Chapter 11	May 27, 2026	Freight brokerage/logistics consulting	$500K-$1M	$100K-$500K
Weiser Onion Produce LLC	Weiser, ID	Chapter 11	May 13, 2026	Produce packing/warehousing	$1M-$10M	$1M-$10M
Boost Express Logistics Inc.	Elmwood Park, IL	Chapter 7	May 29, 2026	Transportation/logistics	Under $50K	$500K-$1M
Saturn Trucking Inc.	Addison, IL	Chapter 7	May 31, 2026	Trucking	Under $50K	$100K-$500K
S Line LLC (Secure Parking)	Knoxville, TN	Chapter 7	May 22, 2026	Transportation-related services	Not disclosed	Not disclosed
Better Lanes Transportation Inc.	Memphis, TN	Chapter 7	May 29, 2026	Trucking	Under $50K	Not disclosed

The week also saw several transportation companies move into liquidation proceedings under Chapter 7.

Elmwood Park, Illinois-based Boost Express Logistics Inc. filed a Chapter 7 petition in the Northern District of Illinois on May 29. Court documents list estimated assets of less than $50,000 and liabilities between $500,000 and $1 million. The company reported having between one and 49 creditors.

Saturn Trucking Inc., an Addison, Illinois-based carrier, filed for Chapter 7 liquidation on May 31. The company reported assets of less than $50,000 and liabilities ranging from $100,000 to $500,000. Court filings indicate no funds are expected to be available for unsecured creditors after administrative expenses are paid.

Knoxville, Tennessee-based S Line LLC, which also operated under the name Secure Parking, filed for Chapter 7 protection in the Western District of Tennessee on May 22. The company listed Knoxville as its principal place of business and Memphis as its mailing address.

While tight margins and higher costs have been affecting small and medium-sized carriers and supply chain-related businesses, freight demand has shown significant improvement during the first quarter of the year. As of Wednesday, tender volumes (STVI.USA) are 43% higher year-over-year compared to the same period in 2025.

As of Wednesday, SONAR’s Outbound Tender Volume Index (STVI.USA) shows tender volumes are 43% higher year-over-year. To learn more about SONAR, click here.

Layoffs, warehouse closures add to industry pressures

The wave of bankruptcies comes as several transportation and logistics companies have announced facility closures and layoffs across the U.S. in recent weeks.

Meal-kit provider HelloFresh filed a WARN notice in Illinois indicating it will close a major production and fulfillment facility in Burr Ridge, resulting in 254 layoffs. The warehouse supports operations for Factor, the prepared-meal delivery business acquired by HelloFresh. The company did not provide a reason for the closure.

Third-party logistics provider GEODIS Logistics said it will shut down a distribution center in Carlisle, Pennsylvania, affecting 185 employees beginning Aug. 31. Company officials said the closure is part of efforts to better align business priorities and support long-term growth initiatives.

FedEx also announced plans to close a facility in Phoenix, eliminating about 100 positions. The closure is part of the parcel carrier’s ongoing Network 2.0 initiative aimed at streamlining operations and improving efficiency across its U.S. delivery network.

Cold-storage provider Americold Logistics disclosed plans to permanently close a warehouse in Atlanta, resulting in 69 layoffs as part of a broader corporate efficiency initiative.

Layoffs and closures

Company	Location	Event	Jobs Affected	Notes
HelloFresh / Factor_	Burr Ridge, IL	Facility closure	254	Production and fulfillment center closing
GEODIS Logistics	Carlisle, PA	Distribution center closure	185	Operations cease Aug. 31
FedEx	Phoenix, AZ	Facility closure	100	Part of Network 2.0 initiative
Americold Logistics	Atlanta, GA	Warehouse closure	69	Corporate efficiency initiative
Sparhawk Trucking	Wisconsin Rapids, WI	Potential layoffs/closure	TBD	Seeking buyer during bankruptcy proceedings

S&P Global warns of looming problems at Odyssey as it cuts rating

Odyssey Logistics has had its debt rating cut by S&P Global Ratings, but it’s a move that brings that agency in line with what its chief competitor did late last year.

But more starkly, S&P Global’s report on its rating reduction goes so far as to raise the possibility of an Odyssey default in 2027. .

S&P Global Ratings (NYSE: SPGI) late last month cut its rating on Odyssey to CCC+ from B-. That rating will apply to its issuer credit rating–essentially the ratings agency’s overall rating for the company–as well as a senior secured first-lien debt.

S&P Global also hit Odyssey with a negative outlook, suggesting conditions are in place for a further downgrade barring a turnaround.

With its move, S&P Global now has Odyssey at a debt level that is considered equivalent to that of Moody’s (NYSE: MCO). That agency cut its rating on Odyssey in November to Caa1. That level is considered equivalent to the S&P ratings of CCC+.

Moody’s reduced Odyssey’s debt rating twice in a three-month span in 2025.

Closer to default grade than investment grade

Both agencies’ ratings are deep in speculative territory, seven notches under the cutoff line between investment and non-investment grade debt.

But the ratings are only five notches above the grades they would give to a company considered in default.

Odyssey is unique among 3PLs in that it has publicly-traded debt even though it is nowhere near being among the largest brokerages, nor is its stock publicly traded.

Privately-held Echo Global Logistics, one of the largest 3PLs, has publicly-traded debt and had been a publicly-traded stock before being bought by a private equity company. C.H. Robinson (NASDAQ: CHRW) and RXO (NYSE: RXO) are both publicly traded in equity and debt markets.

According to S&P, the debt burden at Odyssey continues to be a problem.

“We believe ongoing earnings weakness will impair Odyssey’s ability to refinance upcoming debt maturities,” S&P Global said in its analysis.

Obligations upcoming

Odyssey faces maturity in a $125 million revolving credit facility in July 2027, though so far the company has only drawn $9 million on that, according to S&P.

It also has a term loan of $490 million that matures in October 2027.

“Multiple years of soft freight demand, depressed trucking rates, and rising costs have contributed to reported operating losses over the past two years, which we expect will continue in 2026 and 2027,” S&P Global said.

Free cash flow has been negative since 2023 and was negative $27 million last year, S&P said. The agency added that was “a trend we expect to persist through 2026.”

Given all that, S&P Global said, “we believe it’s unlikely Odyssey will be able to access capital markets at favorable terms. This poses a risk to the sustainability of its capital structure and heightens the possibility of a debt restructuring.”

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

Revolver is limited

Although the revolving credit line has only been hit for $9 million out of $125 million, S&P Global said Odyssey can not tap all of what is remaining.

There is a “first-lien net leverage covenant” when Odyssey’s debt to EBITDA ratio hits 6.25X. That comes into play if Odyssey were to try to draw on the line beyond about $43.7 million.

Debt coverage at the end of last year was about 6.7X, S&P Global said.

“We project revolver utilization to rise to $31 million by Dec. 31, 2026, and close to $42 million by mid-2027, eventually exhausting all available liquidity and making a default increasingly likely,” S&P Global said

Reports from rating agencies do not break out all key financial indicators at the companies that are being rated. But in the latest report on Odyssey, S&P Global said the 3PL’s adjusted EBITDA had dropped from about $170 million in 2022 to about $95 million last year. “The decline stemmed from lower volumes and sharp declines in freight rates,” the report said.

“The company operates in specialized end markets (metals, chemicals, packaged freight, etc.) and has relatively little exposure to retail and e-commerce.” S&P Global said. Its customers have “complex regulatory and safety requirements, which we believe differentiates it from other logistics providers.”

Although freight markets are rebounding, S&P Global’s rating on Odyssey is not banking on that. The ratings agency says it “expects subdued freight demand will continue constraining pricing power and restrict any meaningful improvement in profitability in 2026.”

As a result, S&P said it expects Odyssey’s 2026 adjusted EBITDA to be up only 6% to 10% this year, “which isn’t sufficient to fully offset its interest costs and capital-spending needs.”

“We believe that a freight cycle turnaround could support Odyssey with opportunities to expand profitability and generate breakeven free cash flows in 2028,” S&P Global said.

(Recent data suggests that turnaround is in full swing).

Whoa: outbound tender rejection levels pop to their highest levels a cycle high. A penny short of 17%.

Volumes are incredibly robust, coming out hot to start June. This is driving freight demand to even higher highs. pic.twitter.com/htNpMWDNg3
— Craig Fuller 🛩🚛🚂⚓️ (@FreightAlley) June 3, 2026

But the S&P Global negative outlook on Odyssey appears to be only secondarily tied to S&P Global’s view of the freight market. It’s more a function of its balance sheet.

A further downgrade, S&P Global said, could occur is “the company’s profitability and cash flows don’t improve due to continuing weak freight market conditions that cause it to draw further on its revolver, constraining liquidity; or Its debt facilities become current and the company faces significant challenges in refinancing.”

More articles by John Kingston

Texas court nixes shipper liability in Home Depot/Werner case

Carrier Nussbaum sets driver pay increase; others popping up more quietly

Amazon scores big win at NLRB over whether it’s a joint employer with DSPs

Descartes reports record revenue amid ‘challenging’ trade landscape

Global supply chain SaaS provider Descartes saw record revenue and operating income during its 2027 fiscal first quarter.

Descartes (NASDAQ: DSGX) reported consolidated revenue of $194 million for the period ended April 30, a 15% year-over-year increase. Services revenue was also up 15% to $181 million (organic growth in services revenue was approximately 9%, excluding foreign exchange fluctuations).

The company is seeing more customers use its tools to navigate a changing trade landscape and the tariff refund process. The Supreme Court’s broker liability decision has driven inbound demand for its carrier suitability solutions.

Earnings per share of 55 cents for the period were 14 cents higher y/y and 3 cents ahead of consensus.

“The global trade landscape remains extremely challenging as supply chain participants look to keep up with increasingly dynamic conditions,” said CEO Ed Ryan in a Wednesday news release. “Our network provides the timely, accurate and reliable data needed to fuel both AI-powered solutions and existing systems of record that are deeply embedded in logistics operations.”

Table: Descartes’ key performance indicators

Descartes reported adjusted EBITDA of $90 million in the quarter, which was 20% higher y/y. It recorded an adjusted EBITDA margin of 46.4%, which was up 190 basis points y/y.

The company generated $75 million in cash flow from operations in the period, a 40% y/y increase.

It ended the period with $377 million in cash (up $20 million from the prior quarter), no debt and an untapped $350 million line of credit.

Descartes announced a share repurchase plan in December, allowing it to buy back up to 10% of its public float (approximately 8.6 million shares). It repurchased 305,000 shares in the quarter. It also plans to use cash to fund future M&A.

The company completed the acquisition of Idelic in April for $25.3 million. Idelic is a provider of AI-powered fleet safety solutions.

Shares of DSGX were off 4.6% in after-hours trading on Wednesday.

More FreightWaves articles by Todd Maiden:

XPO’s Q2 tonnage trending ahead of guidance

An XPO trailer being pulled on a highway

Less-than-truckload carrier XPO’s May update appears to put the company on course to outperform its prior tonnage outlook.

XPO’s (NYSE: XPO) tonnage per day was 0.5% higher year over year in May, as a 3.3% increase in daily shipments was partially offset by a 2.7% decline in weight per shipment. The company has been actively pursuing local shippers (SMBs), which tend to have lower shipment weights but better margins. Final results for April showed tonnage was down 1.5% y/y.

The Wednesday update showed the carrier is outperforming typical seasonal demand trends and appears in good position to beat its tonnage guidance for the second quarter, which calls for no y/y change. June is up against an easier prior-year comp (-8.9%) than what the carrier faced in both April (-5.5%) and May (-5.7%).

The tonnage declines also continue to improve on a two-year-stacked comparison. May tonnage was down 5.2% following a 7% decline in April.

XPO doesn’t provide revenue-based metrics or market commentary in its midquarter updates. However, it noted on its first-quarter call at the end of April that it was winning share at “above-market” rates. In addition to greater penetration among SMBs, it is seeing more shippers use its premium services, which typically incur accessorial charges.

Industrial activity improved for a fifth consecutive month in May, according to manufacturing data published on Monday.

The Institute for Supply Management’s Manufacturing PMI registered a 54 reading for the month, which was 130 basis points higher than April, and the highest reading in four years. (A reading above 50 signals expansion, while one below 50 indicates contraction.) The subindex for new orders—an indicator of future activity—registered a 56.8 reading, which was 270 bps better sequentially.

Inflections in ISM data usually lead LTL volumes by a few months.

On the pricing side, management previously said that contractual rate renewals were up by a mid- to high-single-digit percentage during the first quarter. It also forecast second-quarter yield to come in “comfortably ahead” of the mid-single-digit y/y yield increase captured in the first quarter.

XPO normally records 250 to 300 bps of sequential margin improvement in the second quarter; however, management expects to exceed the high end of that range (an 80.9% adjusted operating ratio). The guide implies at least 200 bps of y/y margin improvement.

More FreightWaves articles by Todd Maiden:

Amazon scores big win at NLRB over whether it’s a joint employer with DSPs

A process moving through the National Labor Relations Board that could have found Amazon a joint employer with its Direct Service Providers (DSPs), the independently-owned companies that deliver parcels for Amazon, appears to have ended with a huge victory for the online retailer.

Late last month, G. Rebekah Ramirez, an NLRB administrative law judge, approved an agreement between the NLRB General Counsel and Amazon (NASDAQ: AMZN) that was first revealed in April.

The Teamsters, at that time, voiced strong opposition to the deal. The union has done so again. Its attorneys quickly filed a request to appeal what it called the ALJ’s “defective unilateral settlement” between the NLRB and Amazon.

At issue is a complaint filed in September 2024 by the regional director of the NLRB’s Region 31, a geographic area that includes the Amazon DAX8 facility in Palmdale, California.

The complaint was over Amazon’s actions toward a DSP called Battle Tested Strategies (BTS) that operated out of DAX8. BTS is believed to be the only DSP where its rank-and-file voted to be represented by a union–the Teamsters–and where the DSP owners recognized the vote.

BTS’ agreement to operate as an Amazon DSP was terminated in June 2023. Amazon has denied the charge that the cancellation was because of the union recognition.

Amazon said in a statement to FreightWaves that BTS’ contract was “terminated for repeated safety violations, including use of vehicles with faulty brakes and out of service vehicles, as well as failure to pay their insurance provider.”

The resulting investigation by the regional director led to the complaint that, as ALJ Ramirez said in her review of the earlier proceedings, “at all material times, Amazon and BTS have been joint employers of BTS’s employees working at the DAX8 facility.”

Given that position of joint employer, according to Judge Ramirez’ summary of the case, and because BTS had recognized the Teamsters, “Amazon was required to recognize and bargain with the Union.”

Hearings began in September and continued on and off into 2026.

Union had been on a roll

The process had been moving in the Teamsters’ direction. A late 2025 attempt by Amazon to block the process was halted by the Ninth Federal Circuit.

Even with a change in administration, the NLRB stuck to its argument that Amazon was a joint employer with its DSPs at the start of the hearing process in September, according to reporting by Bloomberg,

The news in April that Amazon and the NLRB General Counsel had reached an agreement that would settle the action without any precedent-setting finding about Amazon as a joint employer with a DSP marked a significant change in policy by the agency.

Teamsters seeks an appeal

Reports of that tentative settlement in April brought quick legal protest from the Teamsters. Now that the agreement has the blessing of an ALJ, the union is fighting back harder.

“Settling the instant charges on the terms unilaterally negotiated by the General Counsel is a complete affront to the National Labor Relations Act,” the Teamsters said in its request to file an appeal.

The union argues the settlement “fails mightily under the principles set forth in Independent Stave,” a precedent that governs the NLRB’s ability to recognize private settlements between parties with a case before the board.

The union also said the deal with Amazon would “jeopardize basic…rights of not only the Palmdale employees who are deprived of any effective remedy for Amazon’s egregious violations of the Act, but of Amazon employees across the country who will receive the message that their employer is above the law.”

“The Settlement will injure the rights of all employees nationwide by broadcasting to employers that they can similarly violate the Act with impunity and eventually reach a sweetheart deal absolving them of any real responsibility,” the union said in its request.

The initial complaint, in addition to labeling Amazon a joint employer, also contained numerous allegations of unfair labor practices at DAX8, including (according to the union) “hiring security guards in response to employees’ protected concerted activity.”

DSP model an ‘existential threat’

And in a passage that Amazon might agree with, at least in terms of how important the case might end up being, the Teamsters say “without a finding—or admission—that Amazon is a joint employer of the Amazon delivery drivers necessary to its very existence, the DSP model will continue to pose an existential threat to the Act and to employees’ most basic rights.”

In a statement released to FreightWaves, an Amazon spokesman said “None of the Teamsters’ claims in this matter were found to be true, and we’re glad to put it behind us so we can focus on supporting our team, our partners – including Delivery Service Partners—and the communities we collectively serve. Judge Ramirez looked at this carefully and found the settlement reasonable, noted major gaps in the case, and rejected the Teamsters’ claims. “

The owner of BTS, Johnathon Ervin, who ultimately signed off on the decision to recognize the union, sent an email to the NLRB during the process stating his opposition to the settlement.

Under the deal, workers at BTS between April 2023 and June 2023 are entitled to two weeks pay for each driver and dispatcher employed as of May 20, 2023.

The number of individuals that meet the test is estimated at 84.

Small tab to end the process

If the workers’ pay was $1,500 per week, or $3,000 for the two weeks, and all 84 claimed it for those two weeks, it would be a payout of about $250,000 for Amazon, a pittance for a victory in swatting back the process that at one point seemed to be headed toward a declaration that the company is a joint employer with its DSPs.

According to Judge Ramirez, May 20 is the date that BTS saw its routes reduced by Amazon, which the union alleges is because of the recognition of the Teamsters’ vote to represent the workers.

There are other provisions in the agreement. But the most important, according to Judge Ramirez, “includes a nonadmission clause specifically disclaiming Amazon’s joint employer status.”

But Judge Ramirez said in her decision that under the Independent Stave precedent, the issues raised by the Teamsters regarding joint employer status do not warrant her rejecting the settlement between the NLRB general counsel and Amazon.

More articles by John Kingston

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Apollo affiliate raises $1.4B for logistics real estate fund

Bridge Investment Group announced Tuesday it raised nearly $1.4 billion for a fund that will acquire logistics properties. The raise exceeded the firm’s $1 billion target.

The Salt Lake City-based affiliate of alternative investment manager Apollo (NYSE: APO) said the Bridge Logistics Value Fund II is focused on buying and relocating real estate in supply-constrained U.S. markets and global gateways.

“BLV II is designed to capitalize on long-term demand drivers within the industrial sector, including supply chain modernization, e-commerce growth, and increasing tenant preference for modern, well-located distribution facilities,” a news release said.

The group will oversee leasing, asset management and capital improvements across the portfolio.

“We are incredibly proud to announce the successful close of BLV II and deeply grateful for the trust and partnership of our investors,” said CEO Jay Cornforth. “This milestone reflects the strength of our team, the durability of the logistics sector, and our conviction that disciplined investing in high-quality industrial real estate continues to present compelling long-term opportunities.”

More FreightWaves articles by Todd Maiden:

2 e-commerce logistics providers expand capacity in Great Plains

A worker fills e-commerce orders in a warehouse.

Rush Order and Encore Fulfillment, third-party logistics providers specializing in e-commerce fulfillment, have expanded their footprint with new warehouses in the center of the United States.

Rush Order announced on LinkedIn that it will open its fourth U.S. fulfillment center in the Dallas-Forth Worth area on July 1. The company currently has 13 B2C fulfillment centers worldwide, including in Gilroy, California; Twinsburg, Ohio, New York; Toronto; the Netherlands; United Kingdom; Sydney, Australia and five locations in Asia.

The company said it will now be able to reach 93% of the U.S. population within two days via UPS Ground, with the remaining area able to receive deliveries in three days.

The Dallas-Forth Worth expansion is important because the center sits within a day’s drive by truck of major southern distribution centers for Walmart, Sam’s Club, Target, Best Buy, which allows for faster inventory replenishment and faster lead times to shoppers in the Great Plains and Southeast regions, according to Rush Order.

Meanwhile, Encore Fulfillment announced Wednesday that it has expanded into a 350,000-square foot facility in Oklahoma City, moving under one roof from an earlier location. The new location increases the company’s capacity to process orders at scale and serve more brands while maintaining high pick accuracy rates, it said

“Our clients need a logistics partner that scales with them without sacrificing the high-touch service they rely on,” said Kyle Thompson, co-founder of Encore Fulfillment, in a news release. “This facility gives us the physical footprint to support their growth, while our technology ensures every shipment is routed for the best possible rate and delivery time.”

Brands that sell through Shopify, Amazon, WooCommerce, BigCommerce and other platforms can integrate their systems directly with Enforce.

The facility supports pick and pack, inventory management, wholesale distribution, and omnichannel order fulfillment. Products move from dock to shelf in one-to-two days, and the company’s warehouse routing software batches and routes orders through the facility in the most efficient way possible. Outbound orders are tendered to FedEx, UPS, and the U.S. Postal Service based on the cheapest option.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

Target debuts $367M food distribution center in Colorado

U.S. cites 60 countries for forced labor failures, imposes new tariffs up to 12.5%

The United States is imposing new tariffs up to 12.5% on countries it claims aren’t doing enough to stop production of export goods by forced labor, saying it hurts U.S. businesses’ ability to compete globally.

A Section 301 report by the United States Trade Representative under the Trade Act of 1974 found 60 economies that failed to enforce a ban on imported goods produced with forced labor. That “burdens or restricts” U.S. commerce, it said.

“The failure of our most important trading partners to address the importation of goods made with forced labor is unacceptable,” said USTR Jamieson Greer, in a release. “This creates a dynamic where American workers are forced to compete globally on an unlevel playing field. We will no longer tolerate this disparity.”

Greer said that while some trading partners have taken initial steps to prevent the importation of forced labor goods, “each of our trading partners must do more to ensure that trade does not perversely encourage and entrench forced labor globally.”

Greer wants 10% additional duties on countries that have taken some measures against forced labor trade, and 12.5% on all others.

A hearing is scheduled for July 7.

Read more articles by Stuart Chirls here.

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Old Dominion’s May update shows an improving LTL market

a closeup of an Old Dominion daycab pulling an Old Dominion trailer

Old Dominion Freight Line saw further improvement in its operating metrics during May, as the less-than-truckload industry is now seeing a demand bump from the industrial economy.

The Thomasville, North Carolina-based company reported a 12.3% year-over-year increase in revenue per day during the month. The result outpaced a previously reported 7.6% revenue increase in April. May tonnage was down just 3.8% y/y (down 6.1% in April), with yield increasing approximately 16% during the month.

Through the first two months of the quarter, Old Dominion’s yield increased 15.6% y/y inclusive of fuel surcharges (up 5.4% excluding fuel).

The revenue-based metrics are being positively influenced by a runup in diesel fuel prices. Less-than-truckload fuel surcharge programs include a step function as diesel prices rise, typically resulting in margin accretion.

On a two-year-stacked comparison, Old Dominion’s (NASDAQ: ODFL) tonnage was off 12% in May, which was an improvement from a 15% decline in April. The carrier’s per-day tonnage appears to have troughed in the first quarter.

“Old Dominion produced solid revenue growth for the first two months of the second quarter,” said President and CEO Marty Freeman in a news release. “While our LTL tons per day declined on a year-over-year basis in both April and May, demand has continued to improve as the quarter has progressed.”

Manufacturing data released Monday showed industrial activity was positive for a fifth consecutive month in May. The Purchasing Managers’ Index registered a 54 reading for the month, which was 130 basis points higher than April. (A reading above 50 signals expansion, while one below 50 indicates contraction.) The May reading was the highest for the dataset in four years.

The new orders subindex—an indicator of future activity—came in at 56.8, 270 bps higher sequentially. (Inflections in PMI data usually lead LTL volumes by a few months.)

Old Dominion’s shipment weights are up approximately 1.5% y/y so far in the quarter. Heavier shipments are a sign that the market is turning and often lead to margin improvement.

The carrier previously guided to 300 to 350 bps of sequential operating margin improvement in the second quarter, which is in line with its historical margin progression. The forecast implies a 73% operating ratio (inverse of operating margin) at the midpoint of the range, which would be 160 bps better y/y and the first meaningful y/y improvement since 2022.

“We remain confident in our ability to win market share and drive profitable revenue growth over the long-term as we continue to execute on the fundamental elements of our strategic plan,” Freeman said.

The company normally outgrows the market by 9 to 10 percentage points in an upcycle.

Shares of ODFL were up 1.6% at 9:54 a.m. EDT on Wednesday compared to the S&P 500, which was off 0.5%. Shares of ODFL are up 46% year-to-date.

More FreightWaves articles by Todd Maiden:

Freight train fatalities mount as 5 killed in four incidents across US

Five people were killed and two others were injured in four separate freight train collisions across the U.S. over the past week, including fatal incidents in the San Antonio area and southeast Michigan.

The accidents, which occurred between Thursday and Tuesday, involved both vehicles and pedestrians being struck by freight trains in Texas, Michigan, North Carolina and Pennsylvania.

The most recent incident occurred Tuesday evening in southwest Bexar County, Texas, near San Antonio, when a vehicle was struck by a train on Macdona-Lacoste Road near Wisdom Road.

Authorities said three people in the vehicle suffered critical injuries. One of the victims later died, while the two others are expected to recover, according to KSAT News. Investigators have not released details on what led to the collision.

Earlier Tuesday morning, a man was killed after being struck by a Norfolk Southern freight train in a rural area southeast of Ypsilanti, Michigan, reported The Ann Arbor News.

Officials said the victim was on foot when he was hit around 4:41 a.m. on tracks between McKean and Bunton roads in Augusta Township. The collision did not occur at a public crossing, according to local fire officials.

Two other fatal train-pedestrian accidents were reported on Thursday.

In Reidsville, North Carolina, two people were killed after a Norfolk Southern freight train struck them while they were sitting on railroad tracks, according to police. Officers responded to the scene shortly after 6 p.m. and continued to investigate the circumstances surrounding the incident, according to ABC45.

Later that night in Erie, Pennsylvania, a 16-year-old boy was killed after being struck by a freight train near the intersection of Grahamville and South Lake streets, reported Erie News Now. Emergency responders were called to the scene shortly before 11 p.m., and the victim was pronounced dead early the following morning.

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

Bankruptcy roundup chart

Layoffs, warehouse closures add to industry pressures

Layoffs and closures

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