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

truck fallen over

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convenient time for a vacation, indeed

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

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

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

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

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

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

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

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

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

How a truck driver gets stopped for inspection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Time to start inspecting in the winter

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

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

FREIGHTWAVES: That makes sense.

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

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

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

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

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

Why the Northeast is quietly running out of diesel

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

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

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

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

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

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

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

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

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

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

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

Here’s a breakdown:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ‘everything shortage’ endures

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

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

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

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

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

Exclusive: Central Freight Lines to shut down after 96 years

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

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

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

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

Kalem agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Watch: Central Freight Lines’ impact on the LTL market

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

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

Central Freight Lines statement

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

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

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

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

Brief history of Central Freight Lines

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

Warehouse cramming is about to begin — Freightonomics

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

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

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

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

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

Seasonality pushing rejections and rates higher ahead of the Fourth

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

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

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

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

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

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

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

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

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

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

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

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

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

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

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

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

Tender rejections: Absolute level and momentum positive for carriers

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

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

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

SONAR: Capacity Trend Market Score (Carriers – VAN)

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

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

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

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

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

Freight rates: Absolute level and momentum positive for carriers

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

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

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

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

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

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

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

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

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

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

SONAR: IJC.USA

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

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

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

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

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

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

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

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

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

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

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

Project44 acquires ClearMetal to strengthen predictive tools

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

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

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

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

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

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

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

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

Click here for more articles by Grace Sharkey.

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Robots drive $10B Amazon investment for European fulfillment centers

Green-and-black robotic saucers are moving carts of packages in Amazon fulfillment centers.

Amazon plans to deploy three types of new robots as part of a plan to invest more than $10 billion to expand and modernize fulfillment centers in Europe and grow its workforce by 25,000 by the end of the decade.

Amazon (NASDAQ: AMZN) relies on robots to make the work environment safer and easier for employees, while improving package processing speed. Amazon Robotics was founded in 2012 when Amazon acquired Massachusetts-based Kiva Systems. The original Kiva robots moved stacks of shelves within a warehouse. Now robots conduct a variety of tasks. Some zip around like motorized saucers, while others have mechanical arms for lifting. 

Amazon recently surpassed 1 million robots developed, produced and deployed across its operations network. 

At an event in London Thursday, the retail logistics behemoth introduced the next-generation Proteus autonomous robot. It is designed to do physically demanding tasks such as moving heavy carts with packages over long distances to the outbound loading dock so employees can reduce their risk of injury and focus on managing inventory flow, quality control and other high-skill work. 

Proteus, introduced in Nashville, Tennessee, in 2022, is Amazon’s first fully autonomous mobile robot, meaning it can navigate freely throughout a warehouse using sensors to detect and avoid objects in front of it. The original version of the self-guided transporter works in conjunction with Cardinal, a robotic arm that tightly loads packages up to 50 pounds into carts in a Tetris-like manner. Cardinal uses advanced AI and computer vision to quickly select one package from a pile of packages delivered via a chute, lift it with air suction, read the label and precisely place it in the appropriate cart assigned to a specific truck.

One of the major changes, made possible by advances in artificial intelligence, involves how employees interact with the robot. Proteus, about the size of a 50-inch flat-screen TV, is capable of understanding instructions in plain, conversational language with no technical commands and no programming interface. That means warehouse workers can assign tasks to the robot the way they would communicate with a colleague.

The next-generation Proteus is also designed to travel much further than the original. Rather than operating only in dock areas, the new system can work anywhere items need to be moved. Amazon said this includes transporting containers as they arrive at a site, transferring them between workstations, and assisting employees across Amazon’s fulfillment centers and delivery sites.

“You tell it what needs to be done. It figures out the priority, the route, the timing,” said Scott Dresser, vice president of Amazon Robotics, in an article on the company’s website. “It becomes your assistant for material movement.”

Proteus 2.0 is currently being tested in Amazon labs, with deployment in Europe expected in the first half of 2027. 

Broader robotics roadmap

The scaling of these systems reached a new peak with the 2024 launch of Amazon’s next-generation fulfillment center in Shreveport, Louisiana. The site uses eight different robotics systems that work in harmony to support package fulfillment and delivery, according to another blog post. 

Alongside advancements in mobile robots, Amazon is also developing new collaborative technology and robotic manipulation — the ability to handle individual objects with precision. 

This includes STARK, a new collaborative robotic tote-handling system. The brainchild of an operations employee, STARK picks full totes from conveyors and places them on carts — work that otherwise requires repetitive heavy lifting. First piloted in Barcelona, Spain, STARK is planned to expand to 15 sites across Europe by 2027, Amazon said.

STARK is Amazon’s collaborative robotic tote-handling system, designed to handle individual objects with precision. (Image: Amazon)

Amazon said it will also expand the use of Vulcan, the company’s first robot with a sense of touch. Vulcan uses sensors to pick and stow at the top-and-bottom rows of inventory pods at fulfillment centers. The grab tooling can see and feel objects simultaneously to navigate densely packed environments and understand how much force to apply. Originally developed for a facility in Spokane, Washington, Vulcan expanded last year to handle more complex picking tasks at Amazon’s Hamburg facility in Germany and will be installed at more sites. 

“Europe is at the center of how we’re building our operations for the future,” Dresser said. 

Legacy robots

Amazon actually has two Vulcan robots. The pick version can grab items up to five pounds and 14 inches in length. Each robot reaches nine feet tall. In total, a system uses 10 robot arms in a 350-square foot area. 

The stow version can grab items up to eight pounds, but nothing that can roll. This system links three robot stations together in a 500-square foot area and weighs nearly 10,000 pounds. Vulcan Stow uses an arm that carries a camera and a suction cup. The camera looks at the compartment and picks out the item to be grabbed, along with the best spot to hold it by. While the suction cup grabs it, the camera watches to make sure it took the right item. It also has the smarts to identify when it can’t move a specific item, and can ask a human partner to assist.

Sequoia, launched in Houston in 2023, is a robotic system that uses AI and computer vision systems to consolidate inventory and free up storage at the site to facilitate faster order transactions. 

Amazon’s Vulcan robot is the company’s first robotic system with a sense of touch. (Photo: Amazon)

Amazon says Sequoia enables it to identify and store inventory up to 75% faster at fulfillment centers. It works by having mobile robots transport inventory directly to a containerized storage system or to an employee picking out items for a customer order. Inventory is transported directly to employees at a workstation ergonomically situated for their power zone (between mid-thigh and mid-chest height), mitigating the need for employees to reach above their heads or squat down, which can lead to common workplace injuries.

Sequoia takes up four 500,000-square foot floors per building, equivalent to about 35 football fields. The Shreveport facility is five stories tall.

While Proteus is fully self-guided, other mobile robots such as Titan and Hercules, are confined to areas where only authorized robotic specialists can enter, and read barcodes that are stickered to the floor as navigation coordinates.

Hercules is a drive unit that finds and transports pods of items from areas of the fulfillment center to employees picking items for customer orders before they are packaged. It can lift up to 1,250 pounds and travel across 1 million square feet. Hercules makes key decisions about how it moves independently, but takes overall direction from centralized planning software. It then uses a forward-facing 3D camera to differentiate between people, pods, other robots, and other objects in its path to make safer decisions, the Amazon article said.

Similar to Hercules, Titan is another drive unit that uses encoded markers on the floor to bring items from across Amazon’s fulfillment centers directly to employees as they assemble customer orders. It can lift twice as much as Hercules, meaning it focuses on larger and/or bulkier items like small household appliances or pallets of food. 

Sparrow is another robotic system that supports employees who aggregate items for customer orders. This robotic arm picks up and moves individual items from containers into specific totes to send off to employees before they’re packaged. It can lift packages up to 12 pounds. Sparrow uses computer vision and AI to identify the correct item and add it to the tote on its delivery journey. 

Once all the items for a customer order are selected, Amazon uses a variety of automated packaging systems to pack orders in the smallest conveyance possible to reduce waste. One machine, for example, originally created plastic bags, but was retrofitted to create made-to-fit paper bags using curbside recycled materials. It uses sensors to measure an order’s dimensions and then creates a correctly sized, protective bag using a more durable, weather-resistant paper and heat-sealing technology. Amazon has retrofitted more than 120 of these machines across the U.S. in more than 20 fulfillment centers, helping to avoid more than 130 million plastic bags this year, according to Amazon.

Robin was the first robotic arm ever deployed by Amazon Robotics. It is made to sort packages before they’re brought to the outbound dock to be placed on a truck. Robin grabs packages from conveyor belts and puts them onto robotic drive units to be moved to the next part of the facility. It also transfers damaged packages to ensure optimal quality control. 

Amazon insists the robotics expansion isn’t costing jobs. Since introducing robotics into its operations years ago, Amazon says it has continued to hire hundreds of thousands of employees globally and created new job categories, including reliability, maintenance and engineering roles. But most job hires are seasonal workers. The Wall Street Journal last year reported that Amazon has fewer employees per facility than at any time in the past 16 years and that experts believe Amazon wants facilities that can mostly run on their own with only a handful of managers. And CEO Andy Jassey has said the company will need fewer employees over time because of AI.

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

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Samsara raises guidance amid data center boom

multiple trucks on a highway

Samsara said the construction of data centers, updates to the energy grid, and other government-related infrastructure investments are driving new demand across its platform. Recent business wins prompted the fleet telematics and safety technology company to raise its full-year revenue and earnings outlook.

San Francisco-based Samsara (NYSE: IOT) reported total revenue of $479 million, a 31% year-over-year increase, for its 2027 fiscal first quarter ended May 2. It added $101 million in incremental annual recurring revenue during the period, pushing the full-year run rate to nearly $2 billion.

Among the wins were 11 new $1-million-plus contracts, Samsara’s second-highest quarter for large deals. It now has 3,363 customers spending at least $100,000 annually on the platform and 190 customers spending over $1 million.

“Our customers are facing unprecedented demand and are constrained by worker capacity,” said Sanjit Biswas, Samsara CEO and co-founder. “We see a massive opportunity to transform physical industries with Operational AI and AI Agents – automating work, unlocking capacity, and driving greater productivity across the sectors that power the global economy.”

The company raised its full-year revenue guidance to a range of $2.005 billion to $2.013 billion, which would be a 24% y/y increase. The prior outlook called for a 21% to 22% y/y increase.

Table: Samsara’s key performance indicators

First-quarter adjusted earnings per share of 17 cents was 6 cents higher y/y. The company achieved net profitability on an unadjusted basis for a third consecutive quarter.

Full-year adjusted EPS guidance was raised to a range of 70 to 72 cents, 6% higher than the prior forecast.

Many of Samsara’s customers are rapidly scaling their businesses to participate in a global infrastructure buildout. They continue to look to Samsara to digitize operations and save money.

“Our customers are operating at a scale most people don’t see,” said Amit Vyas, chief revenue officer. “They’re building power grids, maintaining road networks, and running distribution systems that touch every part of daily life.

“As those operations grow, so does the complexity of keeping them safe, efficient, and connected. Every vehicle, asset, and job site they bring onto our platform generates data that makes the entire system smarter. It’s why our largest customers keep expanding their partnership with us, and why we’re seeing so much momentum in this market.”

Samsara’s Connected Operations Platform uses sensors, cameras and telematics devices to capture over 25 trillion data points annually.

More FreightWaves articles by Todd Maiden:

The Supreme Court Just Stripped Brokers of Their Biggest Legal Shield

The freight brokerage industry has operated for decades under a legal assumption that is now gone.

On May 14, the U.S. Supreme Court ruled unanimously in Montgomery v. Caribe Transport II, LLC that state-law negligent-hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act (FAAAA). The 9-0 decision, authored by Justice Amy Coney Barrett, resolved a longstanding split among federal circuit courts and eliminated the preemption defense that brokers had used for years to defeat tort claims arising from carrier selection decisions.

The implications of this case are immediate and far-reaching for brokers. The ruling does not impose automatic liability, but it opens the door for plaintiffs to challenge how brokers vet and select carriers in state courts nationwide. And according to Josh Lovan, Industry Business Advisor at J. J. Keller & Associates, Inc., the significance of this moment is difficult to overstate.

“For brokers, this is everything,” Lovan said. “One of the biggest changes that’s occurred in transportation in the last two decades. It fundamentally shapes how freight is going to be moved.”

The shield is gone

For years, brokers relied on the FAAAA’s broad preemption of state laws related to prices, routes, and services as a blanket defense against negligent hiring claims. That legal posture often stopped cases cold before they reached a jury. The Montgomery decision turns on the FAAAA’s safety exception, which was a carve-out preserving state authority to regulate safety with respect to motor vehicles. The Court held that negligent-hiring claims fall squarely within that exception.

Justice Brett Kavanaugh, in a concurrence joined by Justice Samuel Alito, acknowledged the ruling could increase insurance costs for brokers but stressed that the FAAAA was an economic deregulation statute, not a safety deregulation statute. He also pushed back on fears that the decision would bury brokers in litigation, writing that brokers who select reputable carriers “should be able to successfully defend against state tort suits.”

But the key word there is “defend.” Brokers can no longer sidestep the question entirely. They now have to demonstrate that their carrier selection was reasonable, and that means documentation, consistency, and verifiable safety criteria.

“Brokerage has exploded in recent years, and this ruling is pulling the shield away from many brokers who have gotten away with negligence,” Lovan said.

The ruling doesn’t prescribe a specific federal standard for what constitutes reasonable care in carrier selection. Instead, that question will be answered by state courts, creating what several industry groups have warned could become a patchwork of varying requirements across jurisdictions.

What it does make clear is that basic vetting, such as confirming a carrier has active authority and insurance on file, is no longer sufficient.

“J. J. Keller’s Carrier Risk Review Service is validating that the carrier has an active USDOT number, the right operating authority, the right insurance forms filed with FMCSA, MCS-90, and a satisfactory rating,” Lovan said. 

Brokers must now approach carrier selection as a question of defensibility, not just availability. “The question is no longer just ‘Who can I use to move this?’” said Lovan. “The question is, ‘Can I defend this carrier if an incident occurs?’ Conventionally, a lot of brokers cut corners to fill trucks, but now you have the responsibility to defend the carrier.”

That shift echoes what legal analysts have said about the ruling’s practical effect. Ron Leibman, a partner at McCarter & English who represents brokers, told Trucking Dive that the decision is straightforward in its scope: “A state law negligent claim can be brought against you. You can defend it. That is all the court said.” But defending it requires a paper trail, a process, and a standard applied consistently across every load.

A documentation problem becomes a litigation problem

Lovan identified three operational shifts brokers need to make immediately in response to the ruling.

“First, elevate carrier vetting to a defensible standard,” he said. “The Court made it clear that brokers have a duty to exercise reasonable care when selecting carriers, and that decision can now be challenged in court. Reviewing authority and insurance is no longer enough. Brokers need to consistently evaluate safety ratings, inspection history, and patterns in violations such as driver qualification, hours of service, and maintenance.”

“Second, document every carrier selection decision,” Lovan continued. “The biggest shift from this ruling is not just liability exposure — it is the need to prove your process. The legal defense is no longer based on preemption, but on whether the broker acted reasonably in selecting the carrier. That means brokers need a consistent, repeatable vetting process with clear records of what was reviewed, what risks were identified, and why a carrier was approved. In a post-incident environment, the file matters just as much as the decision itself.”

“Third, standardize and enforce your safety criteria across the network,” Lovan said. “This ruling will push brokers to tighten their networks and apply more consistent thresholds for carrier approval. If standards are inconsistent or loosely applied, that creates exposure. Brokers need clear policies for what is acceptable, what requires escalation, and what disqualifies a carrier, and those policies need to be followed every time.”

That last point matters in a legal environment where plaintiff attorneys will scrutinize not just what a broker did in a single transaction, but whether the broker’s broader practices reflect a pattern of due diligence or a pattern of cutting corners.

The data gap makes this harder

One of the most significant complications underlying the ruling is the state of federal safety data itself. According to FMCSA data, roughly 90% of active interstate motor carriers do not have a formal safety rating. The agency’s compliance review process (the mechanism through which carriers receive satisfactory, conditional, or unsatisfactory ratings) has reached only a fraction of the industry due to limited staffing and resources.

Brokers often rely on carriers who often don’t have a safety rating, Lovan said, because otherwise it would be difficult to compete in moving freight.

That reality now makes the broker’s own vetting process all the more critical. When the federal rating system covers only a sliver of the carrier population, the burden of identifying risk shifts to the party making the selection decision. Lovan pointed to Caribe Transport’s documented deficiencies (the kind of red flags visible in publicly available data) as the type of signal brokers must now actively screen for.

“A lot of carriers with a conditional rating simply haven’t gone through an audit,” Lovan said. “This lawsuit indicated things that motor carriers should take an interest in. DQ files and hours of service violations are two of the most often cited during an FMCSA audit. You can’t just select who’s next up and who’s cheapest.”

Chameleon carriers, public scrutiny, and the proliferation problem

The ruling arrives at a moment of heightened public awareness around carrier safety. In April, CBS News’ 60 Minutes aired an eight-month investigation into chameleon carriers, trucking companies that accumulate safety violations, shut down, and reopen under new names with clean records. The investigation revealed that carriers connected to one network alone had logged nearly 15,000 safety violations and 500 accidents in just two years, according to Department of Transportation data. Chameleon carriers are four times more likely to be involved in severe crashes.

These types of mainstream stories, according to Lovan, are a sign that the conversation around carrier safety has moved well beyond the industry press. “The general public is watching this,” he said.

Lovan also flagged a broader structural concern: “The barrier to entry is lower for brokers, so there are many new entrants,” he said. “There’s been a surge in the brokerage world, and we’ve seen an increase in the unsafe carriers that brokers are using.”

The brokerage industry has expanded rapidly in recent years, with approximately 28,000 freight brokers now arranging about a third of all U.S. freight shipments. The combination of lower barriers to entry, fragmented safety data, and the speed at which loads are tendered has created an environment where vetting can become an afterthought. That’s precisely the kind of environment that the Montgomery ruling now exposes to legal risk.

“A lot of brokers do have a good vetting process, but you have to have a consistent program in documentation,” Lovan said. “They have to demonstrate why they selected a carrier and demonstrate the threshold for what criteria they’re using.”

Where plaintiff attorneys will focus

The litigation exposure created by the ruling is not distributed evenly. In states without meaningful caps on noneconomic damages (including states like New York, Pennsylvania, and Illinois, where constitutional provisions or court decisions have blocked or limited tort reform), plaintiff attorneys will find the most favorable conditions for pursuing high-value claims.

According to ATRI’s 2025 forensic analysis of trucking litigation, the national median total award in trucking tort cases was $1.3 million, and the numbers escalate sharply from there. The median nuclear verdict reached $36 million in 2022, roughly 50% higher than in 2013, and the share of verdicts exceeding $50 million rose by 6.4 percentage points over that span.

Cases involving hours-of-service violations or a history of driver violations resulted in plaintiff verdicts 100% of the time in ATRI’s dataset, and these are the exact categories of deficiency cited in the Montgomery case.

“That’s how you end up with a $50 million judgment,” Lovan said. “Those states [without tort reform] and those cases are where plaintiff attorneys will focus their efforts. Plaintiff attorneys across the country have taken note.”

The decision will drive up the number of legal cases going forward. Industry analysts indicate that the ruling will push volumes toward compliant capacity while driving non-compliant carriers out, further tightening supply-and-demand dynamics in favor of carriers with strong safety records.

Building a defensible process

The Montgomery ruling is framed primarily as a broker liability case, but its downstream effects reach carriers directly. Brokers will prioritize carriers with clean inspection histories, documented compliance programs, and stable safety metrics. Carriers with poor CSA scores or unresolved deficiencies face the real prospect of being shut out of broker freight.

“This will affect the supply chain in a positive way,” Lovan said. “It will force unsafe carriers who rely on brokers to get their safety metrics in order. A lot of these carriers should be eliminated before they get a load.”

CSA scores remain in a company portal for two years and carry a severity rating. “Creating a culture of safety takes time,” Lovan said. “Begin today. Eighteen months down the road, you can be a compliant carrier.”

J.J. Keller’s Carrier Risk Review Service provides a structured evaluation of carrier safety risk using publicly available DOT data, including USDOT and MC numbers, operating authority, insurance coverage, FMCSA safety ratings, Inspection Selection System scores, and CSA BASIC scores. Clients receive a detailed report with a four-tiered risk rating for carriers: low, elevated, high or extreme.

“Following this ruling, it’s not enough for companies to simply check a carrier’s authority or confirm registration,” said Dustin Kufahl, Vice President of Consulting and Training Services at J. J. Keller, in a company statement. “They need to be able to demonstrate that they exercised reasonable care when selecting a carrier, and that means thoroughly evaluating safety data and documenting their decision-making methodology.”

The window to act is narrowing for brokers who still rely on informal judgment and inconsistent screening. The preemption defense is gone. Plaintiff attorneys are mobilized. The question every broker will face after a serious incident is no longer whether federal law shields them from liability, but whether their records can prove they made a reasonable decision.

“Carriers have to have a system that validates who they select to move their freight,” Lovan said. “Brokers that have a poor vetting process are not going to be able to wait. They’re going to have to start vetting carriers immediately.”

For more information about J. J. Keller’s Carrier Risk Review Service, visit JJKellerConsulting.com/riskreview or call 844-803-0172.

Hungry? Get a Subway sandwich with your Walmart parcel delivery

A blue Walmart box delivered to a residential doorstep with the driver scanning a bar code to document the delivery.

As Walmart rolls out 30-minute delivery in select markets it’s throwing in a Subway sandwich to make its service more tasty to shoppers than express delivery from rival Amazon, Uber Eats and DoorDash.

The retail behemoth on Thursday announced that customers in six states can order a Subway meal directly through the Walmart (NASDAQ: WMT) app or website and have it delivered in as little as 30 minutes or less, either on its own or alongside an express delivery order transported by gig delivery drivers. Subway is Walmart’s largest in-store restaurant tenant.

Integrating restaurant delivery within Walmart’s Express Delivery service for store merchandise and groceries is designed to add another level of convenience for customers.

Subway delivery from Walmart stores is now available in select Walmart stores in Connecticut, Florida, Georgia, Ohio, Pennsylvania and Texas and will be expanded to about 1,400 locations by the end of the summer, according to a Walmart news release.

Earlier in the week, Walmart said it is launching 30-minute-or-less delivery from stores across 33 U.S. markets, formalizing an ultra-fast delivery service it often already achieves with one-hour-or-less express delivery. More than 100,000 items are eligible for the 30-minute service. 

The service is available in Austin, Dallas and Houston, Texas; Denver; Chicago, St. Louis; Atlanta; Tampa, Florida; Oklahoma City and several others, with additional expansion planned over time.

Walmart has regularly expanded its delivery capabilities to more communities over time as its store footprint grows. A proprietary algorithm determines which store should fulfill an order based on the basket size, driver availability and distance from the store. In the first quarter, Walmart completed millions of deliveries in 30 minutes or less to more than 19,000 zip codes. 

“We’ve been delivering orders in 30 minutes or less for more than a year, and today 26% of our Express Deliveries are already arriving in that timeframe,” said Tracy Poulliot, Chief eCommerce Officer, Walmart U.S. “As customers continue to look for more immediate shopping options, we’re making this service more prominent where it’s available.”

Walmart has noticed a trend in demand for faster delivery related to immediate essential needs and last-minute occasions, such as batteries, party supplies, dog food and cold and flu medication. In grocery, customers use express delivery for forgotten items and last-minute meals, including coffee pods and canned goods. 

In addition to 30-minute and Express (one hour), Walmart customers can choose from multiple same-day delivery options: 30-minute, Express (one hour), three-hour and scheduled.

In early April, Sam’s Club launched an express delivery service from local stores, with items arriving in as soon as one hour.  

Last month, Amazon rolled out 30-minute delivery across four major U.S. cities and said it is expanding the service to dozens more communities this year. Amazon says people tend to buy more when they have convenient delivery options. Amazon has set up micro fulfillment centers, which hold about 3,500 popular fresh grocery, personal care products, electronics and household items, to support the ultra-fast delivery service. Amazon also offers one-hour and three-hour delivery on a wider assortment of merchandise.

New Canada delivery option

Meanwhile, Walmart’s membership program, Walmart+, is now available in Canada with unlimited same-day delivery from stores on orders over $35, free next-day and two-day shipping from Walmart distribution centers and a subscription to the standard tier of the Crave video streaming service. The membership program costs $8.97 per month or $89 annually.

Canada is the first Walmart market outside the United States to launch Walmart+. Customers that already subscribe to Delivery Pass for $89 will be automatically rolled into Walmart+.

And there was more news on the delivery front. Walmart said it completed its one millionth drone delivery as it rapidly expands drone delivery capabilities across 66 stores in four states serving five metro markets. Forty percent of the total deliveries were made in the fiscal year 2027 first quarter (February-April). The average drone delivery time is 23 minutes. 

Walmart began drone delivery on a limited basis in 2021.

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

Walmart credits fast delivery, third-party marketplace for revenue gains

FedEx, China Southern Airlines to explore cargo cooperation

A China Southern Cargo jet, painted with a light-blue tail, lifts off the runway.

FedEx Corp. and the air cargo arm of China Southern Airlines last week agreed to strategically collaborate on ways to improve the efficiency and service capabilities of their air logistics networks by leveraging each company’s respective advantages and sharing best practices.

The companies signed a memorandum of understanding formally establishing a working relationship in Guangzhou, China, where China Southern Air Logistics is based and where FedEx (NYSE: FDX) operates a large hub.

Under the agreement, the companies will explore cooperation opportunities in several areas, including capacity sharing, routes, hub connections, network planning, fleet resources, ground operations and digitalization. 

“By integrating FedEx global air network resources with China Southern Air Logistics’ operational experience in both domestic and international markets, we will further enhance route connectivity and operational efficiency,” said FedEx China President Poh-Yian Koh in a news release. “Together, we will build a smarter, more agile, and more resilient air logistics ecosystem — better serving the growing cross-border logistics needs of Chinese customers and injecting new momentum into the smooth flow and development of the global supply chain.”

FedEx is the largest cargo airline in the world by traffic and fleet size. China Southern Airlines ranks in the top 10 carriers in the world by cargo traffic, according to the International Air Transport Association. China Southern Cargo operates 19 Boeing 777 freighters in addition to managing cargo carried in the belly hold of the parent company’s passenger planes.

FedEx has shifted some China outbound flights over the past year away from the United States and to Europe after the Trump administration’s tariff hike on Chinese goods, including e-commerce parcels, reduced U.S. import demand. 

FedEx is in the process of expanding and upgrading its Asia-Pacific hub at Guangzhou Baiyun International Airport. The project, which is expected to be completed next year, will more than double the size of the original terminal and triple the parcel sorting capacity per hour

Philippines

In related news, FedEx last month broke ground on expansion of its Clark gateway facility in the Philippines to keep pace with growth in cross-border trade. Once completed, the modernized terminal will span nearly 840,000 square feet and feature upgraded handling and operational capabilities designed to enhance regional capacity, shipment flow and service flexibility. 

Rival UPS is also expanding its air hub in the Philippines.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

UPS projects to boost capacity at 3 Asia air hubs

Veterans in Logistics names John Tozer as Chairman

Veterans in Logistics welcomes John Tozer as Chairman - promotional graphic featuring the initiative logo and a professional headshot of John Tozer smiling against a dark camouflage background

The Broker-Carrier Summit officially launched Veterans in Logistics at its 2026 event in Kansas City. It named John Tozer as the initiative’s first chairman to lead efforts connecting, supporting and advancing military veterans in freight and transportation.

Tozer, a naval aviator who spent 13 years flying helicopters in theaters worldwide, brings extensive operational and leadership experience. His military honors include Squadron Pilot of the Year, Wing Tactician of the Year, and Tactical Development and Evaluation Officer of the Year.

“John represents exactly what Veterans in Logistics is all about,” said Dan Lindsey, founder of the Broker-Carrier Summit. “His service to our country, his leadership experience and his impact on the freight industry make him the ideal person to help guide this initiative as we continue building opportunities for veterans throughout transportation.”

From naval aviation to freight technology

Tozer’s military career included overseas deployments across the Baltic region, the Middle East and the South China Sea. Beyond flying, he held leadership roles and earned recognition for tactical development.

After leaving the Navy, Tozer co-founded Newtrul, a digital freight-matching marketplace focused on zero-touch transactions in the over-the-road spot market. He served as the company’s chief operating officer. Newtrul was later acquired by Highway. Today, Tozer leads the Capacity Business Unit at Highway, overseeing the Trusted Freight Exchange platform that connects pre-vetted carriers with qualified brokers.

The transition gap

The challenges veterans face when leaving service run deeper than many civilians realize, Tozer said. He described mentoring peers who received inaccurate guidance about their market value and transferable skills.

“You’ll have some folks that will say, ‘Well, you’re worth this in the private sector. This is the type of job you should do and this is the pay you should receive.’ And that’s coming from folks who have absolutely no idea,” Tozer said. “So you have either this underinflated or overinflated number, depending on who you’re talking to.”

Military personnel often develop specialized vocabularies full of acronyms, and sometimes profanity, that become second nature but are incomprehensible to civilian employers.

“I can have a full conversation with somebody in the military using just acronyms, and nobody else can understand it,” Tozer said.

Technology is helping close the gap. What once took months with a transition assistance counselor can now happen in hours using artificial intelligence and large language models, Tozer said.

“You can essentially give it: ‘These are the MOS’s. This is the speak. This is an example of a CV.’ Throw it all into an LLM and have it naturalize that for the specific role, and match an MOS to a role in logistics,” Tozer said. “It’s going to hallucinate a little bit. But when you have the folks that have actually done it before, you can break that down and get a really good, really quick and really accurate product. Additionally, military culture and the logistics culture are wildly similar, which gives me confidence in the ability to provide value to both these underserved communities”

Building a two-sided marketplace

Veterans in Logistics is designed as a two-sided marketplace. Sponsors — including shippers, brokers, carriers and logistics companies — sit on one side seeking veteran talent. Veterans seeking meaningful placements sit on the other.

“It’s not just to place them in something so that they start making money. It’s to place them in something that makes them feel comfortable, because it’s incredibly uncomfortable getting placed in a position that you have no business being in — for both sides,” Tozer said.

The initiative plans to host job fairs and networking events. It is filling five chair positions to guide the organization. Tozer has begun networking with former commanding officers who now run base transition programs, creating a direct pipeline to reach service members before they separate.

For Tozer, the mission is both personal and professional.

“God, I wish I had this, man. And I know a lot of people wish they had it too,” Tozer said. “That’s what we’re looking at for the next six months as we build out the pipelines and the sponsorships and the community.”

Eight indicted in alleged carrier impersonation scheme; prosecutors allege $4.49 million in cargo losses

Eight individuals have been indicted in New York in connection with what prosecutors allege was a multi-state cargo theft operation. Prosecutors allege the scheme involved the unauthorized use of shipment information and the impersonation of legitimate trucking carriers to divert freight shipments valued at approximately $4.49 million, according to the indictment and a public announcement from the Manhattan District Attorney’s Office. The underlying allegations have not been proven in court.

According to court filings and an announcement from the Manhattan District Attorney’s Office, the defendants are accused of participating in a scheme that targeted shipments moving through logistics facilities in New Jersey, Pennsylvania and Virginia between October 2025 and April 2026. Prosecutors allege the group stole approximately $4.49 million worth of products, including lamb, cheese, beef, copper and cigarettes, through six separate cargo theft incidents.

The defendants named in the indictment are Murodullo Khasanov, Nodir Kobilov, Shavkatbek Mamadjanov, Rakhmiddin Abdullaev, Aleksey Vorobyev, Nizom Ismoilov, Doston Mardoev and Dilshod Nabiev. Each is charged with one count of conspiracy in the fourth degree and varying counts of grand larceny. The identities of the eight defendants in this article are drawn from the publicly filed indictment and accompanying court filings.

The indictment identifies legitimate trucking carriers whose names and registration information prosecutors allege were used without authorization during the scheme. Those carriers are identified in the indictment as victims of the alleged conduct. This article does not suggest that any legitimate carrier, its employees or its customers participated in, authorized or bear responsibility for the conduct alleged in the indictment.

FreightWaves contacted counsel for Aleksey Vorobyev, Nodir Kobilov and Murodullo Khasanov on June 4, 2026, seeking comment regarding the allegations described in the indictment. Counsel were asked to respond by 8:00 a.m. ET on June 5, 2026. No response was received before publication.

FreightWaves was unable to independently identify counsel for Shavkatbek Mamadjanov, Rakhmiddin Abdullaev, Nizom Ismoilov, Doston Mardoev and Dilshod Nabiev despite reviewing court records, contacting the New York County Supreme Court Criminal Term Clerk’s Office and contacting the Manhattan District Attorney’s Office. On June 5, 2026, the Manhattan District Attorney’s Office indicated that counsel information for those defendants existed and would be provided. As of publication, that information had not yet been received. FreightWaves continues efforts to identify and contact counsel for those defendants and will update this article if responses are received.

The identities of the eight defendants named in this article are drawn exclusively from the publicly filed indictment and the Manhattan District Attorney’s Office announcement of June 3, 2026. FreightWaves has not independently verified these identities against booking records, court appearance records, or other sources outside the prosecutorial filing.

The central claims in this article are drawn from the publicly filed indictment, the accompanying Statement of Facts filed in New York County Supreme Court under case number IND-71638-26 and public statements issued by the Manhattan District Attorney’s Office. FreightWaves has not independently verified the underlying allegations contained in those filings.

All eight defendants are presumed innocent unless proven guilty in court. The charges described in this article are allegations made by prosecutors. FreightWaves has not independently verified the underlying criminal allegations contained in the indictment.

Prosecutors allege thefts relied on carrier impersonation

According to the indictment, manufacturers and shippers contracted freight brokers to arrange transportation of cargo through online load-matching platforms. The indictment identifies the legitimate carriers whose names and registration information were allegedly used as victims of the scheme, not participants. This article does not suggest that any legitimate carrier, its employees or its customers participated in or bear responsibility for the alleged conduct described in the indictment.

According to the Statement of Facts filed in the case, prosecutors allege members of the group obtained shipment information associated with legitimate motor carriers and used that information to impersonate those carriers during the pickup process. Prosecutors allege participants displayed carrier names, MC numbers and DOT numbers on tractor-trailers and presented themselves as legitimate transportation providers when arriving at pickup locations.

Court filings further allege shipment details, pickup information and carrier identities were distributed among participants through encrypted messaging applications, including WhatsApp and Telegram. Prosecutors allege stolen freight was then transported into New York City, transferred to secondary vehicles, stored and sold or otherwise disposed of, according to prosecutors.

According to the indictment, prosecutors allege the defendants arrived at logistics facilities, took possession of cargo and transported it to New York City. Prosecutors further allege the cargo was sold or otherwise disposed of. FreightWaves has not independently verified these allegations.

According to the indictment, prosecutors allege the following six cargo theft incidents occurred during the scheme. The dollar amounts listed represent figures alleged in the indictment. FreightWaves has not independently verified the value of any shipment or confirmed these figures through shippers, insurers or any source outside the prosecution.

• Approximately $165,000 in frozen lamb allegedly stolen in November 2025.

• Approximately $432,000 in cheese allegedly stolen in December 2025.

• Approximately $295,000 in frozen beef allegedly stolen in December 2025.

• Approximately $266,000 in copper allegedly stolen in February 2026.

• Approximately $709,000 in cigarettes allegedly stolen in March 2026.

• Approximately $2.6 million in cigarettes allegedly stolen in a second March 2026 incident.

Prosecutors allege the combined value of the shipments exceeded $4.49 million.

Indictment details alleged scheme

According to prosecutors, the alleged operation involved obtaining shipment information associated with legitimate carriers and using that information to impersonate those carriers at freight pickup locations.

According to prosecutors, the alleged activity spanned multiple states and involved shipments moving through logistics facilities in New Jersey, Pennsylvania and Virginia. Prosecutors allege the defendants used information associated with legitimate carriers to obtain freight that had been assigned to those carriers for transportation.

The Manhattan District Attorney’s Office announced the indictment on June 3 following an investigation involving multiple law enforcement agencies.

Context: Carrier impersonation schemes in freight industry reporting

FreightWaves is providing this background solely for industry context. This contextual description is not offered as evidence that the allegations in this indictment are true, and no inference about the guilt of any named defendant should be drawn from it.

Carrier impersonation and freight diversion are categories of commercial cargo loss that have been described in prior industry reporting by FreightWaves and other publications. Law enforcement agencies and industry groups have, in prior contexts unrelated to this case, used the term “cargo fraud” to describe similar categories of conduct. FreightWaves is not applying that characterization to the allegations in this indictment, and no inference about the guilt of any named defendant should be drawn from this contextual description.

The allegations against all eight defendants remain unproven and will be decided through the court process.

What FreightWaves independently verified

FreightWaves independently verified that a criminal case bearing the case number IND-71638-26 was filed in New York County Supreme Court through direct communication with the New York County Supreme Court Criminal Term Clerk’s Office. FreightWaves reviewed the publicly filed indictment and Statement of Facts associated with that case number and confirmed that the eight defendants named in the Manhattan District Attorney’s Office announcement of June 3, 2026, appear in those court documents.

FreightWaves contacted the Manhattan District Attorney’s Office media relations office on June 4, 2026, as the prosecuting party, to seek comment and confirm public details. This contact was not an independent verification step.

FreightWaves has not independently verified the underlying criminal allegations, the alleged value of any shipment, or the defendants’ alleged participation in the conduct described in the indictment.

FreightWaves reviewed the indictment, Statement of Facts and public materials associated with New York County Supreme Court case IND-71638-26.

FreightWaves has not independently verified the underlying allegations contained in the indictment, the alleged value of the stolen cargo, the defendants’ alleged participation in the scheme or the ultimate disposition of the shipments identified by prosecutors.

The identities of the eight defendants as listed in this article are drawn exclusively from the publicly filed indictment and the Manhattan District Attorney’s Office announcement of June 3, 2026. FreightWaves has not independently verified those identities through law enforcement booking records, court appearance records, or any source outside those documents. FreightWaves has not independently corroborated the identity of any defendant through court appearance records, defense counsel confirmation, booking records or other independent means. Readers should be aware that FreightWaves’ identification of these individuals relies entirely on prosecutorial filings.

Because FreightWaves was unable to identify counsel for five of the eight defendants, FreightWaves cannot confirm through an independent representative that the individuals named in the indictment are the persons who appeared in the proceedings under those names.

FreightWaves was unable to independently verify defendant identities through sources beyond official prosecutorial and court records. FreightWaves has not independently verified the identities of the legitimate carriers whose names and registration information prosecutors allege were used without authorization during the scheme and was unable to confirm those identities through direct outreach prior to publication.

FreightWaves has not independently verified the identities of the legitimate carriers whose names and registration information prosecutors allege were used during the scheme.

The central claims in this article are drawn from materials produced by or filed through the Manhattan District Attorney’s Office, including its June 3, 2026, public announcement and the indictment and Statement of Facts filed in New York County Supreme Court under case number IND-71638-26. These materials originate from a single institutional source. FreightWaves has not obtained independent corroboration of the indictment’s underlying allegations from a law enforcement agency outside the prosecuting office, from any named defendant or their counsel, or from any shipper, insurer or freight broker identified in the court filings.

FreightWaves has not adopted the prosecution’s underlying factual allegations as independently verified fact.

FreightWaves contacted the New York County Supreme Court Criminal Term Clerk’s Office on June 4, 2026, seeking confirmation of the case and defendant information. The clerk’s office was able to locate records associated with some defendants but did not provide complete confirmation for all defendants. FreightWaves subsequently obtained case number IND-71638-26 through communication with the Manhattan District Attorney’s Office and reviewed the associated indictment and Statement of Facts

The charges described in this article are allegations. All defendants are presumed innocent unless and until proven guilty in a court of law. This article is based on publicly filed court documents and official prosecutorial announcements.

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

Why the freight industry needs Certified Fraud Compliance Officers – FreightWaves

Why the safest freight brokerages are usually the most boring – FreightWaves

Cargo theft is changing, and the risk is now inside the truck – FreightWaves

House endorses 25-year old rules for rail merger review

A coalition opposing the Union Pacific-Southern Pacific merger got a boost from a powerful House committee that called for a thorough review of the deal that would create the first all-freight transcontinental railroad.

The Surface Transportation Board was urged to conduct a rigorous review of the merger in language added to the fiscal 2027 Transportation, Housing and Urban Development (THUD) Appropriations bill. The inclusion by the bipartisan House Appropriations Committee came in markup June 2.

“This report language sends another clear signal from members of Congress that the proposed UP (NYSE: UNP)-NS (NYSE: NSC) merger must be subject to the highest level of regulatory scrutiny in order to protect against anti-competitive harms, ensure rail shippers have new and enhanced rail-to-rail competitive options should the transaction move forward, and evaluate whether further concentration in the rail industry is necessary and in the public interest,” said the Stop the Rail Merger Coalition. “We applaud continued Congressional oversight of this proposed merger, because the U.S. economy cannot afford a costly deal that drives up prices for rail shippers and consumers, weakens the workforce, and destabilizes the nation’s supply chain.”

The coalition represents the interests of shippers, railroads, labor unions, consumers, and public policy groups. 

The bill reemphasizes the STB’s responsibility to conduct a comprehensive review of the proposed transaction to ensure it delivers substantial public benefits, enhanced competition for rail shippers, and protections for the U.S. economy and consumers. 

The committee also backed the STB’s revised 2001 merger rules formulated after a series of chaotic consolidations, requiring applicants for the first time to not only preserve rail-to-rail competition but offer enhanced competitive options for railroad shippers. 

There are few concerns of a rubber stamping of the $72 billion deal by the STB, which analysts say will restructure the U.S. rail network. Chairman Patrick Fuchs is widely respected in Washington and in the rail industry, having co-authored the most recent surface transportation reauthorization bill. The panel collected 120 million separate pieces of data, including six years of traffic tapes, before the merger filing was even made, and brought on data scientists from the Massachusetts Institute of Technology to help crunch the numbers.  

The STB on May 28 conditionally accepted the railroads’ revised railroads’ merger application. But it held off on the start of the  formal evaluation process, requesting UP and NS submit further information by July 27.

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

Read more articles by Stuart Chirls here.

Related coverage:

Up, then down: drop in trucking jobs in May mostly wipes out gain from April

Trucking is driving double-digit growth for this rail freight category

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

No hard feelings: UP-NS will see fact-based review

Borderlands Mexico: Uber Freight sees earlier peak season, strong Mexico demand

Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week in Borderlands Mexico: Uber Freight sees earlier peak season, stronger Mexico demand; Mexico freight trucking sector outpaces broader economy in Q1; and 1.1M-square-foot logistics center planned in Phoenix area. 

Uber Freight sees earlier peak season, stronger Mexico demand

Uber Freight says U.S.-Mexico freight markets are tightening faster than expected as strong produce exports, rising fuel costs and declining driver availability push cross-border transportation rates higher heading into the summer shipping season.

The findings were included in Uber Freight’s Q2 Market Update & Outlook report released Thursday, which concluded that several market pressures expected later in 2026 are already impacting freight networks across North America. 

The report forecasts truckload spot rates will remain 20% to 25% above 2025 levels for the remainder of the year, while contract rates could rise 5% to 10%.

“Peak season appears to be arriving earlier and behaving differently than normal,” Uber Freight said, citing a combination of produce volumes, fuel costs and tightening capacity.

Mexico produce exports drive demand

One of the strongest themes in the report is the impact of Mexico’s agricultural exports on cross-border freight markets.

Uber Freight said produce volumes moving through Laredo are experiencing one of the heaviest seasons on record. March shipments of citrus, fruits and nuts from Mexico were up more than 36% compared to the same period in 2025, while total exports moving through Laredo increased 8% year over year.

The surge in agricultural freight has helped pull trucking capacity toward key cross-border corridors and produce-growing regions.

According to the report, carriers have increasingly shifted equipment to take advantage of stronger reefer rates, creating capacity shortages for dry van shippers and contributing to broader market tightening. 

Uber Freight noted that Fresno-to-Chicago reefer spot rates jumped 43% in a single month, while produce transportation rates from California to Chicago increased nearly 25% in recent weeks.

The company advised shippers to tender freight four to five days in advance on cross-border lanes and secure reefer capacity early before summer demand peaks.

Cross-border rates climb

Uber Freight said freight rates between Mexico and the U.S. have risen sharply since February.

The report’s Mexico outlook found cross-border rates are up 8% to 15% across the market, while some major corridors have seen increases approaching 30% in just two months. Fuel inflation, produce demand and driver shortages are combining to create upward pressure on transportation costs.

The report also highlighted declining availability of B-1 commercial drivers, a trend that has become increasingly important for carriers serving cross-border freight markets. Uber Freight listed falling B-1 driver capacity among the primary factors tightening Mexico-U.S. freight networks.

Fuel prices add new pressure

At the same time, transportation providers are facing rapidly rising fuel costs.

Uber Freight reported the national average diesel price reached $5.64 per gallon in May, up from $3.72 per gallon in February. The increase was driven largely by geopolitical disruptions in the Middle East and reduced oil flows through the Strait of Hormuz.

The company noted that fuel surcharges are becoming a growing issue in cross-border transportation because many Mexico freight lanes do not have standardized fuel surcharge programs.

Shippers should review fuel surcharge agreements, shorten surcharge adjustment cycles and add fuel accessorials where necessary, Uber Freight said.

Capacity tightening across North America

Beyond cross-border markets, Uber Freight reported truckload conditions are tightening nationwide despite what is normally a softer seasonal period.

Van spot rates increased 24.8% year over year in April, reefer rates rose 26.3%, and flatbed spot rates climbed 23.7%. Meanwhile, spot market volumes were up 44% year over year. First-tender acceptance rates slipped to 82%, while route-guide compliance fell to 86%, forcing more freight into the higher-cost spot market.

Uber Freight said regulatory changes are also contributing to capacity constraints. The company estimates the Federal Motor Carrier Safety Administration’s non-domiciled CDL rule could remove roughly 40,000 drivers annually over the next five years, tightening available capacity even further.

Supply chains remain volatile

International freight markets continue to face uncertainty as geopolitical conflicts, tariff policy changes and shifting sourcing strategies alter global trade flows.

Uber Freight said global schedule reliability remains near 63%, while companies continue diversifying sourcing away from China and adjusting supply chains in response to changing trade policies.

For shippers, the message from Uber Freight is clear: conditions that many expected to emerge during peak season are already here.

“The window to get ahead of these conditions is narrowing,” the report said, urging shippers to secure capacity earlier, closely monitor tender acceptance rates and develop contingency plans for critical domestic and cross-border lanes.

Mexico freight trucking sector outpaces broader economy in Q1 

Mexico’s freight trucking sector grew 1.8% in the first quarter of 2026, outpacing both the broader transportation sector and Mexico’s overall economy as cross-border and domestic cargo demand remained resilient.

According to data from Mexico’s National Institute of Statistics and Geography (INEGI), the transport, postal and warehousing sector expanded 0.4% during the quarter, while Mexico’s gross domestic product increased 0.4% annually, reported Mexico Business News.

Freight trucking accounted for 51.4% of the GDP generated by Mexico’s transport, postal and warehousing sector and represented 3.8% of national GDP during the quarter.

1.1M-square-foot logistics center planned in Phoenix area 

Houston-based Lovett Industrial and Peakline Real Estate Funds have broken ground on North Park Logistics Center, a 1.14 million-square-foot Class A cross-dock industrial facility in Glendale, Arizona. 

The project will be developed on nearly 56 acres in Metro Phoenix’s Southwest Valley, with direct access to Northern Parkway, Loop 303 and Interstate 10, according to a news release.

The speculative development is designed to serve large-scale distribution users and will feature 40-foot clear heights, 197 dock doors, 29 knockout panels and extensive trailer parking. 

The first phase is scheduled for delivery in the second quarter of 2027, with a planned second phase adding approximately 623,000 square feet. The project is being marketed and leased by CBRE.

Truckload’s shrinking miles

Chart of the Week:  Outbound Average Length of Haul – USA SONAR: OALOHA.USA

Despite the ongoing tightening of the domestic truckload market, the trend of shrinking load lengths that began in 2024 shows little sign of reversing. Since June 2024, the average length of haul in SONAR’s tender data set has declined from approximately 607 miles to just above 500 miles — a 21% drop, with 11% of that occurring over the past year alone, making it a fairly linear trend. Is this part of a sustained structural change, or something that could flip in the near future and exacerbate current market conditions?

Perhaps the most interesting characteristic of this trend is its longevity. Most freight trends emerge sharply or follow seasonal patterns. This one looks more like a shift in how shippers utilize trucks as they adapt their supply chain management strategies — which, if true, suggests a more permanent alteration of the market.

The reason this trend matters is that longer lengths of haul occupy more capacity. Longer transit times mean trucks cannot pick up other freight. A load moving from Los Angeles to Chicago covers roughly 2,000 miles and occupies three to four days of a single truck’s time. A load moving from Atlanta to Nashville covers around 250 miles and occupies roughly half a day, depending on loading and unloading times.

In that sense, a shrinking length of haul should have freed up capacity over the past two years, as trucks are cycled more frequently — even despite the strengthening in demand seen recently (up approximately 10–15% year-over-year in early June). Yet tender rejections sit at multi-year highs above 17%, while spot rates are surging across all three main trailer types.

The data suggests that one driver of deteriorating load lengths is the loss of share to railroads in the form of intermodal — a topic we have covered numerous times. Intermodal holds a strong cost advantage over trucking on longer transcontinental lanes but struggles to compete on shorter distances.

Intermodal lost share to trucking during the pandemic when it couldn’t keep pace with demand. Since then, railroads and carriers have invested in infrastructure and expanded capacity to handle greater volume and demand surges. Loaded international container volumes (ORAILINTL) were up approximately 11% year-over-year last week according to SONAR’s intermodal volume data, while domestic container volumes (ORAILDOML) were up 14%.

International container volumes are a direct derivative of imports, as containers are loaded from ships and port yards directly onto trains. Domestic containers typically originate in the U.S. and are transloaded at warehouses.

Intermodal has a cost advantage, but service favors trucking due to its ability to move directly in and out of shipper facilities with fewer touchpoints. Intermodal contract savings averaged between 10% and 20% in 2024 and 2025, but that gap has widened rapidly this year as truckload rates have climbed.

Intermodal pricing is closely tied to truckload, as railroads and carriers won’t leave money on the table. Rates are expected to rise for intermodal this year, but not enough to push loads back to trucking.

The deciding factor for whether a load moves by intermodal or truck is service. Shippers have had ample time to move freight domestically in recent years, as internationally sourced freight has been disrupted by growing global tensions. Houthi attacks in the Red Sea have altered shipping lanes for multiple years, disrupting service patterns. Unpredictable U.S. trade policy has also led many companies to import goods well ahead of expected demand. This just-in-case inventory strategy favors rail, since the extended lead time makes slower transit acceptable.

That dynamic has shifted in recent months, according to the Logistics Managers’ Index, which surveys hundreds of supply chain managers across a broad range of businesses. Inventory levels are now being managed just above replenishment as inventory carrying costs have surged.

Interestingly, this shift has not pushed load lengths higher. Imports have remained low relative to the previous two years, and most of the demand fueling the truckload market has come from moves under 250 miles, pushing carriers toward a more regionalized approach. The recent trend of shrinking load lengths is therefore less about modal shift alone and more about a disproportionate growth in short-distance moves.

Most of the retail freight that dominates the fourth quarter arrives via ship in August and September. Will trucking see a surge in long-haul demand that further deepens the current capacity crunch later in the year — and how will transportation managers respond?

A last-minute import flood could strain transportation networks later in 2025, but it is unlikely to persist, as supply chains have been permanently altered to some degree. It also makes the prospect of a transcontinental railroad merger that much more intriguing. 

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.

The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience.

To request a SONAR demo, click here.