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’

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

FRA caps non-English rail crews at 10-mile border zone

WASHINGTON — The Trump administration is extending from the highways to the railroads its clampdown on transportation workers who lack proficiency in English.

Transportation Secretary Sean P. Duffy announced on Friday that the Federal Railroad Administration will be limiting crews on cross-border trains from Mexico to not more than 10 miles into the U.S. from their point of entry as a result of a “focused inspection” of Union Pacific Railroad and Canadian Pacific Kansas City operations.

FRA inspectors discovered instances in which crew members operating trains inbound from Mexico had difficulty interpreting track bulletins and communicating safety requirements in English.

“Whether you’re operating an 80-ton big rig or a massive freight train, you need to be proficient in our national language – English,” Duffy warned in a press release. “If you aren’t, you create an unacceptable safety risk.”

FRA Administrator David Fink pointed out that train crews who can’t speak English “pose a significant safety risk that should not be ignored. Dispatchers and first responders need to know that they can communicate with train crews, especially during times of emergency.”

The agency noted that under current regulations, railroads may only certify locomotive engineers and conductors “who possess the knowledge, skills, and abilities necessary to operate safely. Due to important train documents and radio communications being in English, these potential language barriers that FRA observed raised severe safety concerns.”

FRA issued letters to both UP (NYSE: UNP) and CPKC (NYSE: CP) informing them of the findings and that the agency is clarifying how it approves the railroads’ locomotive engineer and conductor certification programs.

“Uncertified (and therefore potentially untrained) crews must stop at the customs inspection point and that any interpreters must be certified under safety regulations,” according to DOT.

“Any occurrences of crews operating in the U.S. without a sufficient understanding of the English language to perform their duties safely could result in the Trump Administration taking enforcement action.”

Prompted by Labor?

DOT’s latest English proficiency restrictions on the rail sector follows prodding earlier this year by the Brotherhood of Locomotive Engineers and Trainmen (BLET).

In response to DOT’s request for information on an updated national freight strategy, BLET president Mark Wallace urged the FRA to require that trains crossing the southern border conduct crew changes on an international bridge so that American train crews can take control at the border instead of at a rail yard located farther north in the U.S.

“Due to safety and security reasons, FRA should mandate that train operations return to using American train crews [in] America,” Wallace wrote in an August 14 letter to DOT.

“A requirement of a crew change at any international crossing would make certain that these train crews are proficient in the English language while operating trains. There can be no miscommunication when critical safety information is being conveyed. Requirements that train crews have legal work authority within the U.S. are vital to ensuring that the crews are fully subject to the FRA’s safety jurisdiction, including certification, qualification, and training requirements.”

The Association of American Railroads pushed back, asserting that non-U.S. railroad crews that conduct cross-border interchange are trained in U.S. operating rules, undergo pre-employment background checks, and comply with federal drug and alcohol testing requirements.

“This proven, limited operational practice has paid huge dividends for local communities and businesses across the nation,” an AAR spokesman told FreightWaves at the time.

FreightWaves has reached out to AAR for further comment.

Click for more FreightWaves articles by John Gallagher.

New York City bill that targeted Amazon won’t get taken up in 2025

A bill that could have a significant impact on the the operations of final mile delivery companies in New York City, Amazon in particular, ended 2025 without any action being taken on it.

The bill was introduced by City Council member Tiffany Caban in September. Its formal name is the Delivery Protection Act and it is strongly backed by the Teamsters.

However, unlike legislation that does not get approved in Congress, the bill does not need to be reintroduced to be considered by the new Council that will be seated at the start of 2026.

The Act was always viewed as being directly aimed at Amazon. The most significant aspects of the bill were the requirement that a final mile delivery service that operates a warehouse or storage facility obtain a license from the city, and that the license could be suspended if there was a “pattern or practice of violations.”

After being introduced, the bill went nowhere despite the fact that 41 members out of a 51-seat Council were co-sponsors, including Caban.

The City Council page devoted to it showed no progress since the legislation was referred to the Committee on Consumer and Worker Protection. No committee hearings were held on the proposal.

Ran out of time

Sources close to the Council say that was a function of the late introduction of the legislation. It condensed the amount of time available to get the Act approved before 2025 came to a close.

New York City’s City Council had its last session of the year Thursday.

“The Council has championed efforts to regulate last-mile facilities, including securing a commitment as part of the City of Yes for Economic Opportunity to require a special permit for the facilities,” a spokeswoman for the City Council told FreightWaves in an email. “This will require negotiation with community stakeholders for the facilities to be approved for operation. Workers who are employed by last-mile companies and facilities play an important role in our economy, and they deserve greater safety and protections. With dozens of bills under consideration for the final week of the legislative session, this bill did not have a hearing and was not completed in that time period.”

Teamsters are angry

But the lack of even a committee hearing, much less a full council on the bill, drew the ire of the Teamsters. The union staged a demonstration outside City Council Thursday before the full legislative body held its final session of 2025. .

On its Facebook page, the union ripped into Council Speaker Adrienne Adams for not scheduling a committee meeting on the Act.

She was criticized for “siding with Amazon over eight million hardworking New Yorkers. Despite bipartisan, supermajority support on the City Council, Adams has blocked the legislation by refusing to hold a hearing on the bill. The Delivery Protection Act would rein in abusive last-mile delivery operations by requiring basic licensing, safety standards, and accountability for companies like Amazon.”

The two key provisions of the legislation would require operators of “certain warehouses and storage facilities from which goods are delivered to final consumers in the City“ to obtain a license to do so from the Department of Consumer and Worker Protection. Depending on how “warehouses” and “storage facilities” were defined, it might have been able to allow smaller delivery services that don’t store any goods, but just transports them, to avoid the licensing requirement. Amazon (NASDAQ: AMZN) obviously would fit the definition of a warehouse operator.

The other key provision would have allowed the commissioner of that agency to deny a license application or renewal of a company if it “has engaged in a pattern or practice of violations of any city, state, or federal law relating to workplace safety, road or highway safety, environmental protection, unfair or deceptive trade practices, or workplace or worker protections in connection with operating one or more last-mile facilities.”

Legal battles possible after passage

Should the bill pass the Council in 2026, it may spur new court battles. There are two likely legal questions, according to transportation attorneys.

One is whether a locality can regulate a company that could be found to be engaged in interstate commerce. In turn, the question of whether a last mile delivery service is involved in interstate commerce, even if it does not cross state lines, is now before the Supreme Court in the Flowers Foods case.

Secondly, there could be a question whether such a local action be in conflict with the Federal Aviation Administration Authorization Act, the 1994 law that prevents state or local action that affects a transportation “price, route or service.” F4A as it is known is regularly litigated in the court system and is in front of the Supreme Court now on the question of broker liability.

Amazon had not responded to an email from FreightWaves by publication time.

More articles by John Kingston

Strange bedfellows as states say brokers not protected under ‘safety exception’

Amazon Teamsters face new challenges in NYC

Inside the Amazon-Teamsters showdown: What’s next?

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

Executives from Union Pacific and Norfolk Southern said their historic merger would help stem the loss of rail market share which declined nearly 10% over the past decade, as single-line service levels the playing field with trucks.

In a call with analysts Friday, the railroads said that rail’s market share is two to three times higher for single-line moves than for freight moving in interline service.

“This transaction is intended to stop and reverse that share loss by offering more single-line options to shippers so rail can compete more effectively with the highway alternatives,” Norfolk Southern Chief Executive Mark George said.

The combined Union Pacific-Norfolk Southern network would comprise 53,000 miles of track in 43 states. (Map: UP)

Roughly 75% of the projected traffic growth following UP’s acquisition of NS will come from converting truckload business to rail, he said, with the balance diverted from competing railroads.

A transcontinental UP (NYSE: UNP) system will create 10,000 new single-line service lanes, which will eliminate the costly and time-consuming interchange of 2,400 carloads and containers per day at gateways from Chicago to New Orleans. UP also points out that interline merchandise traffic moving between 1,000 and 1,500 miles costs an average of 35% more than a comparable move involving just one railroad.

UP sees significant growth in the so-called watershed markets – the vast swath of the American heartland that lies within a few hundred miles of the Mississippi River and the de facto dividing line between the Eastern and Western railroads.

Eliminating interchange friction, short hauls, and revenue division challenges will enable 105,000 carloads of merchandise traffic to shift from road to rail in the watershed, UP said, citing estimates from the consulting firm Oliver Wyman.

“We see meaningful opportunity in the watershed, which we define as the manufacturing and agricultural heart of the country that lies roughly 250 miles from our major gateways along the Mississippi River,” NS Chief Commercial Officer Ed Elkins said on the call. “Today, rail massively underperforms in these watershed markets, capturing less than 10% of the volume.”

Operational changes

UP’s operating plan adds merchandise and intermodal trains that avoid stops at current gateways, including Chicago.

Union Pacific and Norfolk Southern (NYSE: NSC) anticipate adding several routes, including two new daily intermodal train pairs connecting the east and the west with more direct service – reducing estimated transit times from Southern California to the Ohio Valley and Northeast by up to 20 hours and from Southern California to the Southeast by more than two days.

To meet expected intermodal growth, the combined company plans to introduce a total of six premium intermodal lanes operating seven days a week.

The combined railroad plans to add six new premium intermodal lanes. (Map: UP)

A new intermodal train connecting Southern California to the Ohio Valley and the Northeast will use UP’s Sunset and Golden State routes to Kansas City, where it will get on Norfolk Southern’s former Wabash main line to Butler, Ind., the connection with the NS Premier Corridor main line to the East Coast. Eliminating the interchange in Chicago will shorten the trip by up to 252 miles and reduce estimated transit times by up to 20 hours.

In another example, UP and NS will shave approximately 70 hours of transit time on intermodal traffic moving from Southern and Northern California to the Southeast, including Georgia, Florida, and North Carolina, and approximately 95 hours on westbound traffic by routing it via the Shreveport, La.-Meridian, Miss., Meridian Speedway rather than Memphis.

The combined railroad also will introduce six new manifest trains to bridge the east-west divide more efficiently, reducing over 600 daily car handlings.

“We’ve estimated that 40% of the combined company’s manifest routes will benefit from fewer handlings. Driving these results is a simpler, streamlined, and more efficient rail network,” John Orr, NS chief operating officer, told analysts. “This equates to almost 900,000 fewer handlings, about 1.7 million fewer train miles and a reduction of nearly 22,000 car miles.”

Main line and terminal capacity expansion projects will enable a transcontinental UP to handle projected traffic growth, executives said.

“Major projects identified include Union Pacific Sunset and Golden State routes as well as Norfolk Southern’s Kansas City to Butler, Ind., and New Orleans to Atlanta corridors,” Eric Gehringer, UP executive vice president of operations, said on the call.

The investments will add sections of double track, extend sidings, and add other improvements that will improve transit times and service, he said.

UP will expand seven intermodal terminals, two hump yards, and two auto ramps with projects set for Texas, Southern California, Tennessee, Ohio, and Florida. “Key locations for investment include Houston, Port of Laredo, L.A.’s Inland Empire, Chattanooga, Toledo, and Jacksonville,” Gehringer said.

Impact on competition

UP and NS said their combination would enhance railroad competition. Only three customer locations – out of more than 20,000 – are served by UP and NS but no other railroad. UP says it will provide the three locations with competitive options.

In September, UP and NS said they expected that potential concessions necessary to gain regulatory approval might reduce merger-related synergies by $750 million. But now, after preparing the merger application, they say that’s no longer the case.

“We now do not believe significant concessions are needed given the strong value offered by the merger in combination with the enhancements that we are offering,” UP Chief Financial Officer Jennifer Hamann told analysts.

The railroads said they will keep all current gateways open.

“Committed Gateway Pricing,” the railroads said, will streamline pricing for interline moves that otherwise may not directly benefit from the merger.

“Without CGP, a fully served UP industrial chemical customer in Texas shipping to a fully served CSX customer in South Carolina would not see any benefits from our transaction,” Kenny Rocker, UP’s executive vice president of marketing and sales, said on the call. “With CGP, however, the CSX will be able to market directly to that customer using a formulaic competitive rate based on shipments moving in that market and extending the benefits from our merger. Committed gateway pricing is purely additive, providing an extra rate and service option without removing any existing choices.”

UP will not divest any principal routes after the merger. But it will divest shares of the Terminal Railroad Association of St. Louis and the Peoria & Pekin Union Railway – carriers that shuttle cars between railroads – to prevent what otherwise would become majority ownership post-merger. In addition, UP says it will eliminate potential competitive concerns involving railroad-owned freight car pool TTX by reducing its stake to not greater than 50%.

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Related coverage:

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

Unions oppose historic transcontinental rail merger

Union Pacific completes Arizona yard expansion

What an Expiring ACA Could Mean for Owner-Operators and Small Carriers

Health insurance has never been simple in trucking. For owner-operators and small carriers, it’s often one of the most confusing, expensive, and emotionally loaded parts of running the business. And in 2026, that pressure could increase — not because of a new law, but because a temporary one may quietly run out.

Several provisions tied to the Affordable Care Act (ACA) are scheduled to expire at the end of 2025 unless Congress acts. If that happens, the way many self-employed drivers and small fleet owners pay for health insurance could change quickly.

This isn’t about politics. It’s about understanding the mechanics of what could happen and how it may affect your operation.

What Exactly Is Expiring?

The ACA itself is not going away currently. What’s at risk are enhanced premium subsidies that were expanded in recent years and made coverage more affordable for people who buy insurance on the individual marketplace — including a number of owner-operators.

These subsidies were temporarily expanded to:

• Increase the amount of financial help available

• Extend subsidies to people with higher incomes than before

• Cap premium costs as a percentage of household income

Those changes are set to expire after 2025 unless renewed. If nothing changes, the subsidy system reverts to its older structure in 2026.

Why This Matters Specifically to Trucking

Owner-operators and small carriers often fall into a tricky income category.

You might gross a solid number on paper but still operate on tight margins. You may not qualify for employer-sponsored insurance, and group plans are often unavailable or unaffordable for very small fleets.

That’s why some in trucking rely on the individual ACA marketplace — especially those who:

• Are self-employed

• Run one to five trucks

• Don’t offer full group benefits

• Use household income to qualify for subsidies

For this group, subsidies can be the difference between a manageable monthly premium and a bill that disrupts cash flow.

What Happens If the Subsidies Expire

If the enhanced subsidies are not extended, several things are expected to happen based on current projections.

Premiums Could Increase Sharply

For many individuals, monthly premiums would rise — in some cases significantly. Analyses suggest some households could see annual premium costs increase by thousands of dollars.

For a small carrier, that’s not just a personal expense. It affects:

• Take-home pay

• Household budgeting

• Business cash reserves

• Willingness to stay independent

Health insurance is already one of the few costs that doesn’t scale smoothly as you grow.

Some Drivers May Drop Coverage

Historically, when premiums rise beyond a certain point, people opt out.

For trucking, that carries risks:

• Greater financial exposure from illness or injury

• More stress operating without coverage

• Delayed medical care

• Increased reliance on emergency treatment

None of that helps a business run better.

Hiring and Retention Get Harder for Small Fleets

Small carriers already compete with larger fleets that offer group benefits. If individual insurance becomes more expensive, it becomes harder to attract drivers who rely on marketplace coverage or family plans. Even some leased-on operators may factor this into where they choose to work. This could quietly widen the gap between large fleets and small operators.

What This Does Not Mean

It’s important to be clear about what’s not changing:

• The ACA marketplace is not disappearing immediately

• Insurance exchanges will still exist

• Coverage options will still be available

• This is not an immediate 2025 issue

The concern is about cost, not access.

Why This Deserves Attention Now

Many trucking businesses plan for fuel swings, maintenance, insurance renewals, and slow seasons. Health insurance often gets overlooked because it feels personal rather than operational.

But for owner-operators, the line between personal and business finances is thin.

A sudden increase in health insurance costs can:

• Change how much freight you need to run

• Impact breakeven calculations

• Reduce your ability to sit during weak markets

• Force decisions you didn’t plan for

This is especially true if margins are already tight.

Practical Steps Small Carriers Can Take

This isn’t a panic situation — but it is a planning one.

A few smart moves:

• Review how much of your current premium is subsidized

• Understand what your premium would be without enhancements

• Factor potential increases into 2026 budgeting

• Talk with a health insurance advisor who understands self-employment

• Build a buffer rather than assuming today’s rate holds

This is the same mindset you apply to fuel or maintenance — you plan for volatility.

The Bigger Picture

Health insurance has always been one of the structural disadvantages for small trucking businesses. Enhanced ACA subsidies temporarily softened that reality for many.

If they expire, the underlying issue doesn’t change — it simply becomes more visible again.

Whether Congress acts or not, the takeaway for small carriers is the same: health insurance is a business variable, not just a personal one.

Understanding it, planning for it, and adjusting around it is part of operating with intention — especially in a market where margins don’t forgive surprises.

US weighs sanctions as Spanish port ban escalates

WASHINGTON — One year after launching an investigation into Spain’s refusal to dock U.S. vessels, the Federal Maritime Commission is now weighing formal countermeasures – including per-voyage fines and cargo restrictions – against Spanish-linked shipping.

The initial probe began in late 2024 following reports that two containerships enrolled in FMC’s Maritime Security Program – which provides financial support to U.S.-flagged ships in exchange for shipping capacity – and a Danish-flagged general cargo ship were denied docking privileges in Spain.

Updated information from “multiple sources,” according to an FMC notice posted on Friday, confirmed that Spain refused docking privileges at APM terminals in Algeciras, Spain in November 2024 to three U.S. flagged vessels operating under the MSP: Maersk Denver, Maersk Nysted, and Maersk Seletar.

Spain has since codified a “multi-faceted policy,” FMC asserted in its notice, to ban ships and aircraft carrying weapons bound for Israel or tankers carrying fuel for use by the Israeli military from using Spanish ports and airspace.

Signaling an escalation in the maritime dispute between the two countries, the FMC is now soliciting public feedback on specific remedial actions to counterbalance these restrictions, citing “unfavorable conditions” to U.S. foreign commerce.

“Remedies the commission can implement to adjust or meet unfavorable conditions to shipping in the foreign trade of the United States include adopting regulations restricting voyages to or from U.S. ports, imposing per voyage fees, limiting amounts or types of cargo, or taking ‘any other action the commission finds necessary and appropriate to adjust or meet any condition unfavorable to shipping the foreign trade of the United States’,” the FMC stated in its notice, citing federal regulations.

Federal regulations allow for fines of up to $2.3 million per voyage.

“The commission may also request the Secretary of the Department of Homeland Security to refuse entry or clearance to vessels, collect fees imposed by the commission, or detain a vessel about to depart from a U.S. port.”

The initiation of the investigation generated over 8,000 comments last year. FMC is now giving the public 60 days to provide more information on the investigation and to help determine whether or not to impose sanctions.

The agency is asking specifically for:

Additional confirmed reports of Spain – or any private sector entity – directly or indirectly refusing port access or docking privileges to any vessels, including U.S. flag vessels, transporting cargo on routes bound for or coming from Israel.
Reasons stated by Spain or any private sector entity for refusing port access or docking privileges.
Whether the refusal(s) were absolute or conditional, and whether alternatives or options were offered.
Information on the impact any such refusals or denials had on vessel routes, schedules, transfer of cargo to other vessels or ports other than designated destinations, or on maritime commerce generally.

Click for more FreightWaves articles by John Gallagher.

Setting Business Goals for Your Trucking Company in 2026

With 2025 almost in the books, the smartest thing a small carrier can do right now isn’t chase one more load — it’s slow down just enough to decide what 2026 actually needs to look like. If you’re reading this with less than two weeks left in the year, you’re right on time.

Not late. Not behind. Right on time.

This window — the quiet stretch between Christmas and New Year’s — is one of the few moments in trucking where you can look backward without the load board screaming at you and look forward without panic. Most carriers skip this part. They tell themselves they’ll “set goals later.” Later never comes. January shows up fast, and they’re right back to reacting instead of running a business.

This article isn’t motivational. It’s an exercise. Something you can actually sit down and work through to build real, measurable goals for 2026 — quarter by quarter — using numbers you already have access to.

Grab a notebook. Open your spreadsheet. Let’s do this properly.

Step One: Look Back Before You Look Forward

Before you talk about growth, new equipment, or “doing better next year,” you need to answer one uncomfortable question:

What actually happened in 2025?

Not what you felt. Not what social media said. What the numbers say.

Pull these five things from your records — settlement reports, fuel receipts, ELD data, or accounting software:

Total revenue for 2025
Total miles run
Total fuel spend
Estimated deadhead percentage
Net profit (or loss)

Let’s use a realistic small-carrier example:

Total revenue: $265,000
Total miles: 105,000
Fuel spend: $54,900
Deadhead: 18%
Net profit: $28,000

No judgment here. This is just the baseline. You can’t set intelligent goals without knowing where you’re starting.

Now calculate two key numbers:

Revenue per mile: $265,000 ÷ 105,000 = $2.52/mile
Net margin: $28,000 ÷ $265,000 ≈ 10.6%

These two numbers will drive almost every goal you set for 2026.

Step Two: Break the Year Into Quarters on Purpose

Most carriers think in weeks. Some think in months. Very few think in quarters — and that’s a mistake.

Quarters give you enough time to make changes and enough checkpoints to correct course.

Instead of saying “I want to make more money in 2026,” you’re going to ask:

What needs to improve in Q1?
What gets refined in Q2?
What gets optimized in Q3?
What gets protected in Q4?

Here’s how that looks in practice.

Step Three: Set a Margin Goal (Not a Revenue Fantasy)

Revenue goals feel good. Margin goals keep you alive.

Using our example carrier with a 10.6% margin, a realistic 2026 goal might be:

Increase net margin from 10.6% to 13%.

That doesn’t require running harder. It requires running smarter.

On $265,000 in revenue, a 13% margin would be about $34,450 net — roughly $6,400 more than this year without adding a single mile.

That’s your anchor goal. Write it down.

Step Four: Fuel Goals That Actually Move the Needle

Fuel is where small improvements add up fast.

Instead of saying “I want cheaper fuel,” set two specific fuel goals:

1. Reduce average price paid per gallon

If you averaged $4.05/gal in 2025, a realistic goal might be:

2026 target: $3.85/gal average

On 22,000 gallons per year, that’s $4,400 saved.

That alone bumps the margin by over 1.5%. This is station selection, routing discipline, and saying no to convenience stops — not magic.

2. Improve fuel burn slightly

If you averaged 6.8 MPG in 2025, a realistic improvement is:

Target: 7.1 MPG

That doesn’t require a new truck. It requires speed discipline, reduced idle, and consistency. That improvement can save another $2,000–$3,000 annually. Fuel goals should be reviewed quarterly, not yearly.

Step Five: Deadhead Is a Quarterly KPI, Not a Guess

Deadhead is where most small carriers quietly bleed profit. An 18% deadhead rate means nearly 19,000 miles made zero revenue. Your 2026 goal doesn’t need to be perfect. It needs to be intentional.

Q1 goal: Reduce deadhead from 18% → 16%
Q2 goal: 15%
Q3 goal: 14%
Q4 goal: Hold the line

Each 1% reduction at this scale can add $2,000–$3,000 to annual profit.

This comes from:

Better reload planning
Lane discipline
Saying no to “good money going nowhere” loads

Deadhead reduction is one of the cleanest ways to add margin without running more.

Step Six: Build One Operational Goal Per Quarter

Not ten. One.

Examples:

Q1: Build and use a weekly P&L review
Q2: Lock in three repeat broker relationships
Q3: Implement preventive maintenance tracking
Q4: Strengthen cash reserves to cover 60 days of operating costs

These are boring goals. They’re also the ones that separate businesses from hustles.

Step Seven: Sanity-Check the Math

Let’s stack the improvements:

Fuel price improvement: ~$4,400
MPG improvement: ~$2,500
Deadhead reduction: ~$5,000
Better load selection & discipline: ~$3,000

That’s $14,000 in potential margin improvement without adding trucks, drivers, or stress. That’s how a 10% business becomes a 13–14% business.

Step Eight: Write the Goals Where You’ll See Them

If your goals live in your head, they don’t exist.

Put them:

In your business operations binder
On your desktop
In your accounting dashboard

Review them at the end of every quarter. Adjust without emotion. This isn’t about perfection — it’s about direction.

Final Thought

2026 doesn’t need to be louder than 2025. It needs to be cleaner.

Cleaner numbers. Cleaner decisions. Cleaner goals.

The carriers who win next year won’t be the ones who “hope the market turns.” They’ll be the ones who already decided what they need from it.

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

At least one rival railroad is doubling down on its opposition to the transcontinental merger of Union Pacific and Norfolk Southern after the companies filed their former application with federal regulators Friday.

“While we are still reviewing the [Surface Transportation Board] filing and will have more to say soon, what we have seen so far does not change BNSF’s opposition to the proposed merger,” said Chief Executive Katie Farmer, in a statement. “The transaction poses a significant threat to the U.S. economy and the American consumer through its long-term competitive harms. It would leave shippers with fewer options – driving higher rates and ultimately higher prices for consumers.

“This didn’t begin with customers asking for this merger, and the claimed public benefits appear to accrue primarily to shareholders. Past mergers demonstrate the risk of serious service failures with destructive impacts to customers, the U.S. rail network and the American economy.”

Both UP (NYSE: UNP) and NS (NYSE: NSC) say the tie-up will speed freight across their network by eliminating handoffs between railroads at busy interchanges such as Chicago and St. Louis. The merger will improve operations and lower costs for shippers who will only have to deal with paperwork for one railroad.

But some shippers are wary that the deal will concentrate too much pricing power with one carrier, leading to higher rates and major service meltdowns that accompanied past mergers. BNSF earlier dismissed speculation that it would pursue a merger with CSX (NASDAQ: CSX); the railroad dropped a similar agreement with Canadian National (NYSE: CNI) in 2000 after regulators intervened.

“This is precisely why the STB strengthened its merger rules: applicants must now prove their deal will not only preserve but enhance competition; that it serves the public interest, and its purported benefits can’t be delivered through partnerships,” Farmer said. “BNSF (NYSE: BRK-B) is confident that UP has not met these requirements. UP has a long history of making promises in past mergers that they back away from once they’ve secured approval. BNSF remains focused on achieving these same benefits through partnership and collaboration which results in streamlined service, and greater operational flexibility – delivering real, immediate benefits to customers.”

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Find more articles by Stuart Chirls here.

Related coverage:

Union Pacific and Norfolk Southern file historic rail merger application

‘Application day’ nears for UP-NS rail merger

Unions oppose historic transcontinental rail merger

Union Pacific completes Arizona yard expansion

Judge denies summary judgment in deaf driver applicant’s rejection

A suit against a North Carolina trucking company that rebuffed the job application of a deaf driver will proceed after the carrier’s request for summary judgment was denied.

Transportation Management Group, which does business as Wilson Logistics, had requested that the U.S. District Court for the Middle District of North Carolina dismiss the suit that was filed by the Equal Employment Opportunity Commission in August 2024.

But on Wednesday, Judge Catherine Eagles rejected the request for summary judgment, setting the case on the road to either a settlement or a jury trial.

Jerrell McCrary, described in Judge Eagles’ decision as “an experienced truck driver with a commercial driver’s license and a hearing exemption,” had called Transportation Management about a job in 2023. “Because he is deaf, he used a sign language interpretation service to make the call,” Judge Eagles said in a recap of the interactions between McCrary and the company. “But the recruiter who answered the phone quickly said, ‘we cannot accept that here,’ and when Mr. McCrary called back, the recruiter immediately hung up.”

The EEOC filed suit on behalf of McCrary. Judge Eagles’ decision is based on her finding that there may be enough evidence Transportation Management discriminated against McCrary that summary judgement in favor of the carrier is not warranted.

Judge sees evidence of discrimination

“The EEOC has proferred directed evidence that Transportation Management’s recruiter (identified elsewhere as Christopher Hilles) refused to entertain a serious job inquiry from a qualified person was deaf, which all agree is a qualifying disability,” Judge Eagles wrote. “Mr. Hilles’ statements and actions during the calls themselves can support a finding that Transportation Management discriminates against a deaf person interested in employment.”

Among the arguments rejected by Judge Eagles was that because Hilles was a subordinate and not a “decision maker,” his actions on the call are not evidence of discrimination by the company. But, she wrote, “Mr. Hilles was not a random employee who had little or nothing to do with hiring. It was Mr. Hilles’s job to talk to people interested in working for Transportation Management and to assist with the application process.”

Hilles’ actions when he got the pair of calls from McCracy, Judge Eagles said, show that the rejection by the recruiter “was not an outlier and that Transportation Management’s hiring practices discriminate against deaf drivers.”

“Since 2021 and continuing through the present, Mr. McCrary has held a medical waiver issued by (FMCSA) that waives federal regulations that would otherwise make him unqualified for a truck driving position due to being hard of hearing,” the EEOC said in its initial lawsuit. “At all relevant times, Mr. McCrary met the minimum job qualifications for a commercial truck driving position with Defendant, including possession of a valid CDL, and prior commercial truck driving experience.”

Talks to avert a lawsuit came up short

The EEOC filed the suit only after “conciliation efforts had failed,” according to the original complaint.

Court documents include a transcript of Hilles’ deposition during discovery in the case. During the questioning, the recruiter–discussing the English-speaking requirement that has suddenly exploded in the trucking industry–said “Department of Transportation requirements state that you have to read, write and speak English.”

Later in the deposition, an attorney for the EEOC asks Hilles if Wilson Logistics, the business name for Transportation Management, had ever accepted an applicant who spoke sign language. Hilles responded that he thought there had been hirings of people in that category.

But in the call itself with McCrary and his sign language interpreter, Hilles said in the deposition “I was expecting somebody to tell me on the other line that they had an exemption form.” But that information was not provided to him, Hilles said.

“If they would have said they had an exemption form, then we would have had a different conversation,” he said.

A transcript of the call shows it going off the rails quickly. There is confusion about the gender of the interpreter; the interpreter–after being referred to as “Ma’am”–states he is a male. The interpreter tells Hilles “I can tell that you are discriminating against me, so you need to be careful.”

But the key passage is that several times, Hilles states some version of “I cannot bring in somebody who does not speak English.”

McCrary testified in his deposition that he reads and writes in English.

The transcript of the call does not record Hilles saying Transportation Management could not hire a deaf person. But he comes close when Hilles says “I cannot bring in somebody who does sign language into our company. It’s one of our requirements.”

The judge does not rule on whether McCrary was qualified. As to Transportation Management’s view that he was not qualified, “perhaps a jury could conclude that, but there is plenty of evidence otherwise.”

The dispute, Judge Eagles said, “cannot be resolved at this stage.”

Although Wilson Logistics is based in Missouri, and Hilles testified in his deposition that he was based in that state as well, McCrary said in his deposition that he was based in Greensboro, North Carolina, hence the location of the case in the Tarheel State.