Hub Group posted an 8% year-over-year decrease in total revenue in the first quarter, to $915.2 million. It cited lower demand and declines in intermodal revenue per load.
The transportation provider reported first-quarter earnings per share of 44 cents, in line with EPS in the same year-ago period.
“Our customers have taken different approaches to managing through the implementation of tariffs, with the majority taking a wait-and-see approach, while others pulled forward inventory depending on their end markets, product types and origin of their finished goods,” Phil Yeager, Hub Group’s president and CEO, said during the earnings call Thursday. “It remains unclear what the near- and long-term impacts will be as many of our customers have diversified their vendor base and supply chains to ensure fluidity through these potential disruptions.”
Oak Brook, Illinois-based Hub Group (NASDAQ: HUBG) is a provider of transportation and logistics management solutions.
Hub Group missed Wall Street expectations on revenue of $966 million but beat EPS predictions of 42 cents per share.
The company lowered its full-year 2025 outlook, with adjusted earnings per share ranging from $1.75 to $2.25. Full-year revenue is anticipated at $3.6 billion to $4 billion.
Hub Group’s previous full-year 2025 outlook called for an EPS range of $1.90 to $2.40 and revenue of $4 billion to $4.3 billion.
CFO Kevin Beth said the low end of the company’s outlook range for 2025 would be due to an extended slowdown in imports of China imports and/or a weakening of consumer spending.
“Our assumptions at the high end of the range include either a short West Coast slowdown of China imports or a strong bounce-back of demand in the West Coast, leading to a surge of volume in the back half of the year that allows for increased pricing for peak-season surcharges,” Beth said.
Hub Group’s first-quarter intermodal and transportation solutions segment revenue was $530 million, as compared with $552 million in the prior year.
Yeager said the company has not seen any significant West Coast drop in volume yet, as imports from China slowed down due to the impact of tariffs.
“We haven’t seen the slowdown that is obviously much anticipated, but at this point, not showing up in our data,” Yeager said. “We think that’s going to be varying by customer and how much they’ve pulled forward, how much seasonal products they have, how much diversification in their sourcing strategy they’ve been able to execute on. As far as exposure with China, about 25% of our West Coast volume is port-related, 30% of that coming from China.”
The logistics segment revenue was $411 million, a 14% year-over-year decrease due to lower volume and revenue per load in the company’s brokerage business.
“In logistics, our operating margin percentage improved 70 basis points year over year due to improved efficiency in our facilities as well as the completion of the network alignment initiative that was offset by lower margins in our brokerage,” Yeager said. “We experienced a larger decline in revenue at brokerage due to limited spot market opportunities and declining rates as well as a negative mix.”
Company officials said they saw seasonal softness in their managed transportation and final-mile businesses.
Hub Group expects capital expenditures in the range of $40 million to $50 million for the full year.
Beth said the company will likely buy new tractors but no new containers in 2025.
Hub Group
Q1/25
Q1/24
Y/Y % Change
Revenue
$915.2M
$999.4M
(8%)
Intermodal and transportation solutions
$530M
$552M
(4%)
Logistics
$411M
$480M
(14%)
EPS
$0.44
$0.44
Hub Group Q1 earnings.
California deal with 16 states would end key parts of Advanced Clean Fleets rule
(Editor’s note: second-day statement from CARB has been added to the article).
California has taken steps that, if completed, would over time effectively end key portions of its Advanced Clean Fleets rule, through a settlement of a lawsuit by 16 states spearheaded by the Nebraska attorney general.
The settlement was posted Monday in the U.S. District Court for the Eastern District of California. It is a predictable outcome of the decision in January by the state, through the California Air Resources Board (CARB), to withdraw its request for a waiver from the Environmental Protection Agency that would have granted EPA permission to implement the Advanced Clean Fleets rule. ACF would have established a series of mandates for truck owners in California to follow on the way to ending internal combustion engines in trucks by the mid-2040s.
According to the court document, the agreement will require CARB staff to present to the board a proposal to repeal the high-priority fleets and drayage requirements of ACF. There will be a public hearing on the proposal before Oct. 31. The “Initial Statement of Reasons” for the rulemaking that would approve the repeal would need to be published by Sept. 1.
The high-priority fleets section of ACF governed purchases of Class 8 tractors, among other vehicles. The drayage requirements were to be the first rules to hit the state’s trucking sector, requiring any new drayage trucks to be registered with the state after Jan. 1, 2024, to be zero-emission vehicles. But the state said in late 2023 it would not enforce that mandate while various lawsuits played out.
When the state withdrew its waiver request in the final days of the Biden administration, any pathway to implementing the key parts of the ACF in California appeared dead.
CARB sees ‘new approaches’
But in response to a query from FreightWaves, CARB seemed to suggest that the embers are still burning for the ACF, though at a lower temperature. Its spokeswoman used the terms “certain elements” and “new and alternative approaches” in an email to FreightWaves.
“CARB recently took steps to resolve litigation … on the Advanced Clean Fleets (ACF) Regulation by filing a joint stipulation,” the spokeswoman said in the email. “CARB agreed to present a proposal to repeal certain elements of the ACF Regulation to the Board and not to enforce certain requirements of the regulation. [Plaintiffs] agreed to dismiss [their] case after the repeal becomes effective under state law. CARB remains committed to protecting public health using existing authorities as well as new and alternative approaches.”
A day after first being contacted for a comment, CARB supplied FreightWaves with an additional comment to what was released Thursday.
“The Executive Officer of the California Air Resources Board (CARB) recently took steps to resolve litigation with the State of Nebraska and its co-plaintiffs on the Advanced Clean Fleets (ACF) Regulation by filing a joint stipulation.” the statement released by CARB said. “The Executive Officer agreed to present a proposal to repeal certain elements of the ACF Regulation to the Board and not to enforce certain requirements of the regulation. The plaintiffs agreed to dismiss their case after the repeal becomes effective under state law. CARB remains committed to protecting public health using existing authorities as well as new and alternative approaches.”
The settlement filed with the court spells out the steps to be taken by the agency. The defendants in the case were CARB Executive Officer Steven Cliff and California Attorney General Rob Bonta.
It will take some time
“The Parties have reached an agreement that is anticipated to resolve this litigation but will require time to execute,” according to the document known as a “stipulation and order to hold case in abeyance pending outcome of rulemaking.”
If the CARB board agrees to the proposed repeal of the high priority and drayage sections of ACF, it will be submitted to the state’s Office of Administrative Law by Aug. 31, 2026.
After that occurs, Nebraska and the other plaintiffs will withdraw their lawsuit, filed just less than a year ago.
What is notable about the agreement is that it does not make reference to the full repeal of ACF. It refers only to the high-priority and drayage sections of the proposal.
In the court document, the state also says it will not enforce the part of the ACF that requires 100% ZEV sales in the medium- and heavy-duty categories beginning with the 2036 model year “until CARB obtains a Clean Air Act preemption waiver from EPA for that regulatory requirement,” seemingly leaving the door slightly ajar to revive at least part of the ACF under changed political conditions.
There also is no reference in the court settlement to the section of the ACF that would require government fleets to begin a transition to zero-emission vehicles by purchasing a growing percentage of ZEVs for their own fleets. The original Nebraska lawsuit did describe the provisions of the government fleet mandate, but it is not mentioned in the four-page settlement document that was released Monday.
In addition to the attorney general of Nebraska, the attorneys general of 15 other red states joined as plaintiffs: Alabama, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Oklahoma, South Carolina, Utah, West Virginia and Wyoming.
The Nebraska Trucking Association and the Arizona State Legislature also were plaintiffs.
A ‘unified national approach’
In its prepared statement on the court settlement, Kent Grisham, the president of the Nebraska Trucking Association, noted that the lawsuit is not being withdrawn. “We are only putting it into abeyance until CARB follows through on its promise to repeal ACF altogether,” he said. “But the fact that they have admitted that an EPA waiver is necessary sends a signal to any other state wanting to create a patchwork of regulations around the country that when it comes to interstate commerce, a unified national approach is the only way to keep the supply chains running.”
Much of the opposition from other states to various California clean transportation rules is not that they can create a patchwork of regulations. It is that the sheer size of the California market will lead OEMs making cars or trucks to produce vehicles that meet California’s standards in all locations, effectively nationalizing one state’s rules.
When CARB first approved the ACF, its view was that it did not need a waiver, as it did for the companion Advanced Clean Trucks rule. But late in 2023, California did request a waiver for ACF.
Conventional wisdom when it was withdrawn in January is that the waiver request was being pulled because the Trump administration would be in charge of the EPA in just a few days. But the fact that it had been more than a year since the waiver request was made to EPA and it still had not been approved by the Biden-led EPA was also seen as a signal that even a Biden EPA was not prepared to approve the sweeping changes that would have been required under the ACF.
Trump may cut tariffs on China imports to as low as 50%: Report
The Trump administration is considering slashing the 145% tariff on Chinese imports to as low as 50%, the New York Post reported on Thursday.
In addition, import duties on neighboring South Asian countries could be cut to as low as 25%, a source added.
“They are going to be bringing it down to 50% while the negotiations are ongoing,” an unidentified source told the Post.
The White House dismissed the report as conjecture.
“When decisions on tariffs are made, they will come directly from the president. Anything else is just pure speculation,” a White House spokesperson said in a statement to the New York Post.
The White House currently has broad import taxes of 145% against China, with some sector-specific tariffs as high as 245%.
China has raised its duties on imports of U.S. goods to 125%. On April 4, China also began restricting exports to the U.S. of rare earth materials, which are used in high-tech products such as computer chips and electric vehicle batteries.
China was the third-ranked U.S. trading partner in 2024 at $582 billion in two-way international commerce.
The Trump administration announced on Tuesday that Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer will meet Chinese officials for trade talks this weekend in Geneva.
Chinese officials said they are open to trade discussions with the U.S.
“The Chinese side carefully evaluated the information from the U.S. side and decided to agree to have contact with the U.S. side after fully considering global expectations, Chinese interests and calls from U.S. businesses and consumers,” a Chinese commerce ministry spokesperson told China Daily.
Q1 2025 Freight Payment Index giving mixed signals
U.S. Bank Q1 2025 Freight Payment Index pairs declines with emerging recovery
(Chart: U.S. Bank)
Recent Q1 data released by U.S. Bank as part of its Freight Payment Index painted a mixed picture of the national truck freight market, characterized by persistent declines alongside emerging signs of recovery.
The Shipments Index fell 5.8% from Q4 2024 to 75.4 points, while the Spend Index dropped 2.5% to 177.8 points. Despite these quarterly declines, the year-over-year spending drop of 8.6% was the smallest since Q1 2023, a potential stabilization signal after four quarters of declines exceeding 20%. Bob Costello, chief economist at the American Trucking Associations, attributed the ninth consecutive quarter of declines to severe winter storms, wildfires, tariff uncertainties and sluggish retail sales. Extreme weather events, including heavy snowfall in the South and Southeast and devastating wildfires in Southern California, disrupted freight volumes for weeks, though the West reported higher shipments for the quarter.
Economic factors contributed to mixed signals. Shippers and manufacturers ramped up imports and production to preempt potential tariffs, temporarily boosting freight demand in certain sectors. However, soft retail sales and cautious consumer spending on big-ticket items created headwinds. The disparity between shipment (-5.8% quarterly, -13.8% yearly) and spending (-2.5% quarterly, -8.6% yearly) declines suggests tightening industry capacity, driven by rising diesel prices and shrinking fleets as some carriers exited or downsized. Freight rates showed modest recovery, with spot rates rising 0.9% and contract rates up 0.8% from Q4, though both remained lower than Q1 2024. Fuel prices, up 2.3% quarterly but down 14% yearly, further influenced spending trends.
Regionally, outcomes diverged sharply. The Northeast led with a 3.6% shipment increase and 4.1% spending rise, fueled by robust retail sales and import volumes — its strongest performance since Q2 2022. In contrast, the Midwest and Southeast faced challenges. The Midwest saw declines due to weak manufacturing, a 30% drop in housing starts and winter weather, while the Southeast struggled with unusual snow and flat retail growth. Looking ahead, the freight market faces uncertainties from a declining housing sector, though improved factory output and potential shifts toward goods purchasing offer some hope.
April preliminary Class 8 orders take a dive to pandemic levels
Recent April Class 8 data released by ACT Research and FTR Transportation Intelligence showed the lowest order total since May 2020 during the days of COVID shutdowns. ACT Research reported 7,600 units, a decline of 52% year over year.
Ken Vieth, president and senior analyst at ACT Research, wrote in the release, “Between the end of the industry’s annual ‘order season’ and the uncertainty surrounding the impact of US economic policy that peaked at the start of the month on ‘Liberation Day,’ April delivered the weakest cumulative MD and HD order tally since the beginning of the pandemic when markets were comparably unsettled.”
Rival firm FTR Transportation Intelligence reported 7,400 units in April, a decline of 54% both month over month and y/y. For reference, the seven-year April Class 8 order average is 18,963 units. FTR notes that reciprocal U.S. tariffs announced in early April added further challenges for fleets and the overall freight market. Additionally, some fleets are holding off on truck and tractor purchases until market conditions improve or stabilize, according to the release.
Looking at cumulative orders for the 2025 Class 8 order season, which ran from September 2024 through April 2025, orders are down 11% compared to the 2024 order season. FTR adds, “Increasing levels of cancellations in response to growing uncertainty might have contributed to the unusually low order levels this month. Both the on-highway and vocational markets saw substantial declines m/m due to weakening demand fundamentals.”
Market update: April LMI data shows pricing outgrowing capacity
(Chart: The Logistics Managers’ Index)
Recent data from Logistics Managers’ Index (LMI) for April showed a freight market under strain, as transportation pricing surged ahead of capacity growth, signaling tighter conditions for shippers. The LMI is a diffusion index where a reading above 50 signals expansion and a reading below that, contraction. The overall LMI index rose 1.7 points, from 57.1 to 58.8, fueled in part by rising inventory levels, warehousing prices and transportation prices.
Transportation prices rose 5.8 points from March to 62.3 points while transportation capacity saw a lower rate of expansion, up 1.6 points from 53.6 to 55.2 points. FreightWaves’ Todd Maiden wrote, “The Tuesday report said ‘the negative freight inversion’ experienced in late March, when capacity was growing faster than pricing, didn’t continue into April, ‘meaning that the transportation market is still officially in expansion.’”
A continued theme the authors note is the origin inventory costs and warehousing prices, which “suggest that much of the inventory that was rushed in during Q1 is still sitting stagnant in storage facilities and not being sold to consumers. The movements in inventories we observed from January to mid-March are very similar to the movements we would normally see from August to mid-October.” The main difference between the Q1 versus the Q3 rush is Q3 inventory cresting is from items about to be sold for the holiday season; the current inventory buildup will take more time to sell, suggesting higher storage costs across the board.
More inventory hoarding due to tariff uncertainty bodes poorly for transportation capacity that hauls it. The LMI authors added, “Generally, our future numbers suggest that we may see dynamics similar to what we saw in the freight recessions of 2019 and 2022. Both of those downturns were led by decreases in B2B activity, during which Upstream activity contracted or expanded very meekly. Downstream activity was a different story during these freight recessions, as U.S. consumers continued spending, leading to more consistent activity at the retail level.”
SONAR spotlight: Volumes fall while rejections remain resilient
SONAR Ticker: OTRI.USA, OTVI.USA
Summary: The first week of May brought declines in outbound tender volumes while outbound tender rejection rates posted a small rally. Outbound tender volumes dropped 375.14 points or 3.57% in the past week from 10,499.85 points on April 28 to 10,124.71 points. Outbound tender rejection rates saw the opposite, increasing 49 basis points w/w from 4.9% to 5.39%.
Compared to year-over-year comps, a recurring theme is that despite lower outbound tender volumes, the availability of transportation capacity remains more favorable when looking at outbound tender rejection rates. OTVI last year was at 11,043.42 points, 918.71 points and 8.32% higher than its current level, while OTRI is 216 bps higher vs 3.23% on May 6, 2024.
Comparing by segment, dry van continues to underperform the smaller and more volatile reefer segment. Dry van outbound tender rejection rates rose 17 bps w/w from 4.47% to 4.64% while reefer rejection rates remain elevated, up 15 bps w/w from 8.65% to 8.8%. The more favorable pricing power for reefer was also reflected in gains in all-in spot market rates, while dry van rates appear to have temporarily bottomed out. RTI rose 3 cents per mile w/w from $2.44 to $2.47 while NTI dry van spot rates fell 1 cent per mile w/w from $2.21 to $2.20.
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Cyberthreats surge against US logistics infrastructure
Cybersecurity provider Trellix recently released its April “CyberThreat Report” revealing an alarming rise in cyberattacks targeting critical U.S. infrastructure, with the freight and logistics sectors now in the crosshairs of nation-state actors and sophisticated ransomware groups.
Between October 2024 and March 2025, the U.S. saw a 136% increase in Advanced Persistent Threat (APT) activity, prolonged and targeted cyberattacks in which an intruder gains unauthorized access to a network and remains undetected for an extended period.
Of particular concern is the role of APT29, also known as Midnight Blizzard, a well-documented cyber espionage group linked to the Russian Foreign Intelligence Service. Known for its stealthy, high-level campaigns, APT29 specializes in long-term intrusions that exfiltrate sensitive data without immediate detection.
Trellix researchers report that 55% of APT29’s observed activity in this period specifically targeted the transportation and shipping sectors, signaling a coordinated focus on disrupting or surveilling supply chain operations. For logistics professionals, this suggests that state-sponsored actors are probing for weaknesses not just in physical infrastructure, but also in the digital ecosystems that support freight visibility, scheduling and warehouse management.
Meanwhile, ransomware continues to plague U.S. organizations, with 58% of all global ransomware-related posts traced back to U.S.-based attacks. This reflects an environment where financially motivated criminal groups are increasingly exploiting known and zero-day vulnerabilities, bypassing phishing emails in favor of more direct and technical exploits.
What’s more troubling is the evolution in attacker methods. Rather than relying on suspicious email attachments, cybercriminals are now favoring fileless malware, which hides in memory, and using legitimate Windows tools to execute attacks, making them harder to detect with traditional antivirus solutions.
Learn more about these cybersecurity threats in the Trellix report.
(GIF: Tenor)
Fraud Clip of the Week 🏅
How did Flexport’s Convoy platform achieve zero thefts over the past 380,000 loads booked?
Dooner asked the guy who runs it on a recent episode of WHAT THE TRUCK?!?
Here’s what Bill Driegert, head of trucking, had to say:
Philly detective unmasks the city’s largest-ever cargo theft ring 🕵️♂️
Lt. George Ackerman of the Philadelphia Police Department was no stranger to crime trends, but when tractor trailers filled with beef, booze, crab legs and TVs began disappearing at an alarming rate in 2022, even his decades of experience couldn’t explain the scale.
What began as sporadic cargo thefts ballooned into a citywide epidemic, particularly across Philly’s 8th District, where over 180 thefts were eventually reported. The goods, often worth millions, vanished without a trace, with no suspects, no patterns and no product ever recovered.
Ackerman, a former trucker himself, became the lead on what would become the city’s largest cargo theft case in modern history. At first, detectives assumed it was a string of isolated jobs. But the thieves always seemed to know exactly where to strike, regardless of drivers’ unique schedules.
A breakthrough came in April 2023, when Ackerman responded to a robbery involving over 2 million U.S. dimes stolen from a U.S. Mint trailer. Surveillance footage showed a highly coordinated team, including scouts, lookouts and loaders, operating in sync.
Ackerman and his team, with support from the FBI, Secret Service and state police, slowly began to unravel the group. Cell tower data, surveillance footage and even Coinstar deposits pointed to a tightly knit crew based in the area. Their incriminating texts, bragging about “liquor and cow feet” dinners, confirmed their role in more than $1.5 million in thefts.
Learn more about Ackerman’s detective work from Philadelphia magazine here.
(GIF: Tenor)
Join us at our Freight Fraud Symposium in Dallas next week 🎉
Be part of the solution that stops freight fraud in its tracks. Let’s cut through the noise and address this issue head-on!
Freight fraud has reached a crisis level, and it impacts everyone in the industry. It’s time for us to come together to address this critical problem and share best practices on how to mitigate it.
Join us on May 14 in Dallas at the Freight Fraud Symposium, where transportation executives, freight leaders and technology buyers will come together to discuss the issues we all face, share lessons learned and get insights on the latest technology to tackle this problem.
GXO Logistics sees growth opportunities in e-commerce, health care
Officials for GXO Logistics Inc. touted their versatility in dealing with complex supply chains during the company’s first-quarter earnings call on Thursday.
GXO reported first-quarter revenue of $3 billion, a 21% year-over-year increase compared to the same quarter in 2024. Adjusted earnings per share in the first quarter was 29 cents, a 36% year-over-year decrease.
“The complexity related to potential tariffs has created a new array of challenges for our customers, including rising costs, a need to rapidly react to changing prices and fluctuating inventory levels,” CEO Malcolm Wilson said during the earnings call before the market opened. “Our customers are managing through this while, most importantly of all, continuing to serve their end customers seamlessly.”
Greenwich, Connecticut-based GXO Logistics (NYSE: GXO) is one of the largest pure-play contract logistics providers in the world. It has more than 1,000 facilities totaling 200 million square feet in 27 countries, with a workforce of more than 150,000 people.
The company recently finalized a deal with England’s National Health Service Supply Chain, its largest-ever contract, with a value of about $2.5 billion.
GXO also signed $228 million of new business contracts in the first quarter and has a sales pipeline of $2.5 billion, its highest level in three years.
Some of the company’s clients include DuPont, Boeing, Kimberly-Clark, Mitsubishi and Schneider Electric.
During the first quarter, 41% of GXO’s new wins were in newly outsourced business, 39% involved automation and 42% came from e-commerce firms, Wilson said.
“We’re operating in an environment that demands unprecedented agility from global supply chains,” Wilson said. “The structural tailwinds of outsourcing, automation and e-commerce continue to drive our industry’s growth, illustrating that the need for our solutions is more important than ever.”
While many transportation and logistics companies have revised or changed their earnings forecasts, GXO Logistics reaffirmed its guidance for the full year.
The company’s full-year 2025 guidance projects organic revenue growth of 3% to 6% and adjusted earnings before interest, taxes, depreciation and amortization of $840 million-$860 million. GXO also expects adjusted EPS of $2.40 to $2.60.
“Right now, our business is trading well in a dynamic environment, and the base case for our guidance is flat volumes year over year in 2025,” CFO Baris Oran said during the call. “Should we see a softer environment in the U.S. economy, we estimate that we would still land within our narrow guidance range for 2025. Even if we were to see our second-half volume in our consumer-facing business in the U.S. decline by … low to mid-single digits, we would still be forecasting to be within this tight guidance range.”
GXO’s largest market is the United Kingdom, representing $1.4 billion in revenue during the first quarter, compared with $913 million in the same period last year.
The United States was GXO’s second-largest market at $752 million in the first quarter, a 1% year-over-year increase.
GXO is still pending final approval of its acquisition of Wincanton, which officials said they expected to be resolved shortly.
GXO announced it was acquiring Wincanton in April 2024 for about $1 billion. Wincanton is a major logistics and supply chain operator in the U.K. and Ireland.
GXO and Wincanton have continued to be run independently until the U.K.’s Competition and Markets Authority (CMA) has completed its review of the acquisition.
“The Wincanton business has been trading really well since the acquisition,” Wilson said. “We’re very pleased with the management, very pleased with the revenue that is developing. We’re nearing the conclusion of the discussions with the CMA. In fact, in the coming weeks, we’re expecting to receive a full clearance of the deal.”
GXO Logistics’ first quarter key indicators.
Maersk expects no changes from US port fees
Danish container shipping line Maersk said it expects no immediate effect from a U.S. plan to slap steep port fees on Chinese ships.
The plan to tax China’s maritime shipping follows what is known as a Section 301 investigation in 2024 by the United States trade representative that found China leveraged unfair advantages to dominate global shipping and shipbuilding.
Under the finalized rule issued by USTR April 17, Chinese-operated and -built ships could be liable for millions of dollars in charges for vessels calling U.S. ports.
Maersk (MAERSK-B.CO) in an advisory to customers Thursday said that while the ship fees take effect immediately, the fees will be set at zero dollars for the first 180 days before increasing as of Oct. 14.
“At this time, we do not see a direct cost from this initiative impacting Maersk or our customers. We do not anticipate changes to our U.S. port rotations due to the new fees. Your current service plans remain unchanged.”
The carrier said it continues to monitor developments closely.
The USTR in April modified its proposed rule for ship charges after pushback from shippers and other maritime stakeholders. The new plan bases the fees primarily on net tonnage and containers, and only assesses them on the first call of a port rotation, rather than for each call.
CPAC wants Trump to overhaul FMCSA’s waiver regime
WASHINGTON — An organization that holds significant weight with President Donald Trump is pressuring the administration to ease restrictions for approving exemptions and waivers to regulations it says disproportionately hinder small trucking companies.
The Center for Regulatory Freedom (CRF), a project of the Conservative Political Action Coalition Foundation, also known as CPAC, has taken issue with the Federal Motor Carrier Safety Administration’s requirement that exemption applications include a statement explaining “how you would ensure that you could likely achieve a level of safety that is equivalent to, or greater than, the level of safety that would be obtained in the absence of the waiver.”
The code of federal regulations under 49 C.F.R. §381 also states that exemption applications must also “include a copy of all research reports, technical papers, and other publications and documents you reference.”
These FMCSA waiver and exemption requirements are “far too restrictive, requiring excessive justification and public comment periods even for minor exemptions,” CRF contends in comments filed in response to the U.S. Department Transportation’s request for deregulatory recommendations.
“The ‘equivalent safety’ standard … disproportionately disadvantages small trucking companies, as FMCSA’s regulations create a presumption against providing regulatory relief. Thus, carriers are forced to prove how receiving an exemption will improve safety conditions on the road, as opposed to stating the necessity of the exemption and how it will likely not affect safety.”
Smaller companies have been forced to pay additional costs to help assist in providing the additional safety information, CRF noted.
Waiver requests filed by truck drivers and small carriers during the Biden administration were routinely rejected for failing to clear the “equivalent safety” hurdle, including those seeking exemptions from hours of service and electronic logging device regulations.
‘Modify’ 30-day public comment period
CRF also takes issue with FMCSA’s mandatory 30-day public comment period that comes with waiver and exemption requests, arguing that delay in the application process caused by the requirement exposes drivers and carriers “to competitor challenges and subject firms to higher relative costs due to limited administrative capacity,” the group maintains.
CRF pointed out that the extra burden FMCSA’s waiver and exemption process places on truck drivers and small carriers violates Trump’s Executive Order 14219, “Ensuring Lawful Governance and Implementation of the President’s ‘Department of Government Efficiency’ Deregulatory Agenda,” issued the day before he was sworn in on Feb. 19. The mandatory public comment period, therefore, needs to be “modified” to comply with the order, according to the group.
To further comply with the executive order, CRF recommends adding a provision to FMCSA’s regulations to provide a separate exemption application category “for relief from non-safety-critical rules and regulations, such as recordkeeping requirements or paperwork reductions,” the group stated.
“This separate category can be expanded upon by adding a provision … that describes an expedited process for applying and receiving exemptions, eliminating all safety approximations and the inclusion of additional technical reports.
“For all exemption applications, CRF recommends removing the ‘equivalent safety’ standard.”
White House reaches trade agreement with United Kingdom
President Donald Trump on Thursday announced a trade agreement with the United Kingdom, the first agreement established since his “Liberation Day” tariff announcement against all U.S. trading partners on April 2.
Trump said the final details of the agreement, which must be approved by Congress, will be finalized in the coming weeks, but it increases access for agricultural, chemicals, machinery and other products for both countries.
“The UK was largely closed, very much closed to trade, and now it’s opened,” Trump said from the Oval Office. “The deal includes billions of dollars of increased market access for American exports, especially in agriculture, dramatically increasing access for American beef, ethanol and virtually all of the products produced by our great farmers.”
British Prime Minister Keir Starmer said the agreement will be beneficial to both countries.
“This is going to boost trade between and across our countries. It’s going to not only protect jobs, but create jobs, opening market access,” Starmer said in a statement.
Despite the new agreement, the U.S. will continue to impose a 10% baseline tariff on all goods imported from the UK, according to a fact sheet from the White House.
Under the trade agreement, the first 100,000 UK-manufactured vehicles imported into the U.S. each year are subject to a 10% duty rate, while additional vehicles will face 25% rates, according to the White House.
In March, Trump placed import taxes of 25% on foreign cars and auto parts coming into the U.S., on top of the existing 2.5% duty rate for imported British autos.
The UK currently imposes a 10% tariff on U.S. car imports, but it’s unclear if there will be any change as part of the agreement.
The U.S. will also be eliminating 25% tariffs currently imposed on British steel and aluminum exports to the U.S., while the UK will be reducing ethanol tariffs. Both countries also agreed to reduce tariffs on imported beef.
Trump also said Rolls Royce engines and plane parts will be able to be exported from the UK to the U.S. tariff free, while the UK was buying $10 billion worth of planes from the Boeing Co., which is based in Arlington, Virginia.
The UK is one of the few major countries the U.S. doesn’t run a trade deficit with. In 2024, the U.S. had a trade surplus of nearly $12 billion with the UK.
The UK was the ninth ranked international trade partner of the U.S. in 2024, totaling $148 billion in two-way trade.
During his meeting in the Oval Office, Trump also said he also plans to negotiate a trade deal with the European Union and is open to reducing 145% tariffs on imports of goods made in China.
2 markets in 1 quarter: Auto-hauling demand volatile for Proficient
With its business tied to the fate of the U.S. automobile market, it is no surprise that Proficent Auto Logistics, the only publicly-traded auto hauler, had a schizophrenic first four months of the year.
The bottom-line numbers were not positive. Proficient had a significant weakening of its operating ratio in the first quarter. The company recorded an OR of 98.7%, compared to 93.2% a year ago. Sequentially, it improved by 10 basis points to 98.8%.
Proficient (NASDAQ: PAL) reported an operating loss of $2.36 million compared to an operating profit of $6.54 million a year ago. Its operating loss in the fourth quarter of 2024 was $2.4 million.
Earnings before interest, taxes, depreciation and amortization of $7.8 million was down from $10.9 million a year ago but slightly better than the figure of just under $7 million in the fourth quarter of last year.
And Wall Street didn’t like what it heard. Its net income loss of 12 cents per share was 4 cents worse than consensus, according to SeekingAlpha. Revenues of $95.2 million were slightly under consensus.
At approximately 11:10 a.m., Proficient’s stock was down 51 cents a share to $7.61, a drop of 6.3%. But that was an improvement over the day’s low of $7.01.
In the company’s Wednesday earnings call with analysts, CEO Rick O’Dell reviewed Proficient’s performance not just for the three months reported in the earnings, but also into April. In an understatement, O’Dell said of the period, “The first quarter of this year was characterized by two different portions.”
O’Dell said January and the first half of February was “a period of unusually low volume, continuing weak revenue per unit and disruptive weather.” Volume was up just 1% from a year earlier; revenue through mid-February was down more than 17% from a year earlier and about the same sequentially.
Gangbusters in March and April
But O’Dell said March was strong, with unit volume up 17% from March 2024 and revenue up 11%. It was driven by a national annualized sales rate of 17.8 million vehicles sold that month, compared to 15.6 million in January and 16 million in February. The reason for that surge, O’Dell said, was the “pull-forward” of auto sales prior to the imposition of various tariffs.
The discussion on the call went beyond the first quarter and into the second. O’Dell said Proficient had record revenue in April. It was at a level that, if annualized, would be “materially better than our kind of current breakeven type level, more than a 90%-type operating ratio in a normalized environment,” he said.
However, the ability to continue at those rates is questionable. O’Dell said that “industry data seems to indicate a decelerating sales trend through April which carried into May.” The strong April at Proficient has been followed by “moderation in transportation volume, especially from imported vehicles.”
Although O’Dell talked about a slowdown into May, he said Proficient’s current outlook is that the company will have 8% more revenue in the second quarter compared to the first.
“Our OEM customers are dealing with this economic uncertainty and the prospect of significantly increased cost relative to their expectations,” he said. “In real time, they’re making decisions about where their production occurs and whether to curtail imports, both on a near-term and a structural basis. Their decisions on these critical issues will have a significant bearing on the environment that Proficient will navigate over the remainder of 2025.”
Amy Rice, president and COO of Proficient, said the company’s mix was about 60% domestic auto transport and about 40% imported.
She said the strategies of the OEMs Proficient serves have been wide-ranging.
“They have been taking a variety of actions or inactions,” she said. “Certain importers have just continued business as usual and figure that the landscape for tariffs will become clearer in time, and they will continue to adjust in real time as that occurs. Others have chosen to hold cars in the hopes of getting better information on which to make decisions, and therefore they’ve stopped the flow of their cars.”
More acquisitions on hold, unless…
The corporate strategy at Proficient since it became a publicly traded company has been one of acquisition. It began the quarter with an acquisition of Brothers Auto Transport. On the call, O’Dell said Brothers is a “strategic addition [that] increases our presence and density in the Northeast and mid-Atlantic regions and provides new load-sharing opportunities and other efficiencies to our existing operations.”
As far as additional acquisitions, O’Dell said the current “volatile environment” might slow any deals. “That being said, we are starting to see some distressed assets come to market, and we’ll just be smart about the opportunities that we pursue and those that we would want to pass by.”
The demise of major auto hauler Jack Cooper was not mentioned by name on the call, the first focused on a quarter that had occurred since Jack Cooper closed earlier this year. (The most recent call before Wednesday’s was to review fourth-quarter performance, though the Jack Cooper closure occurred in the first quarter.)
On the call, Rice was asked about industry capacity. She noted that “the industry overall had a large player exit.” Rice also said that “most of your players have got some slack capacity.” But referring to the company without mentioning Jack Cooper by name, she said the loss of that capacity means that if “automotive volumes were to return in a sustainable way, I think the industry would feel a crunch on capacity.”
