Werner case at Texas Supreme Court: Did driver fail to perform a legal ‘duty’?

(Editor’s note: the story has been revised to reflect the correct law firm of Thomas Wright).

Arguments in briefs submitted in the ongoing Werner Enterprises nuclear verdict case in Texas have tended thus far to focus on legal questions such as whether various precedents should have done more to protect the truckload carrier from the giant judgment for a horrific crash that took place almost exactly 10 years ago.

But when the case went before the full Texas Supreme Court on Tuesday, oral arguments by Werner’s lead appellate attorney and his counterpart on the plaintiffs’ side went right to the more emotional and controversial issue that people in the trucking world see as the case’s key question: What exactly did the truck driver do wrong?

At stake is a judgment that came down in 2018 for a little less than $90 million, a figure that with interest now sits at well over $100 million. When the judgement was first announced, there was general agreement in the industry that it was the largest verdict ever handed down against a trucking company. (It has since been surpassed again and again, though winning a big judgment and actually collecting it are two different things.)

Thomas Wright, a a founding partner with Wright Close & Barger LLP, which is representing Werner in the case, opened his arguments by saying that the liability the Harris County, Texas, jury hit Werner with, and that was then upheld on appeal, was based on an interpretation of the law that led to the courts “finding a new duty on Warner out of whole cloth, and disregarded all the cases from Texas state courts and around the country.”

‘Admissions rule’ remains a key issue

One of the key arguments of the Werner legal team is that courts have incorrectly applied the “admission rule.” It’s a complex legal standard – one that is still very much an ongoing issue for the Texas trucking sector. But it is one which trucking companies that find themselves as defendants see as protecting them if they make admissions upfront about accepting a certain degree of responsibility for the incident that led to the litigation.

But Wright, in order to make that argument, needed to talk about what happened on Interstate 20 near Odessa, Texas, just after Christmas in 2014. That’s when a car driven eastbound by Zaragoza Salinas in wintry conditions spun out of control, crossed the median and smashed into a Werner truck driven westbound by Shiraz Ali. A 7-year-old boy from the family being transported by Salinas was killed, his sister had brain injuries that have been described as “catastrophic,” and the family’s mother and brother of the other two children were seriously injured.

The Harris County jury found Werner (NASDAQ: WERN) 70% liable and Ali was hit with 14%. The balance of the liability went to Salinas.

The jury’s fundamental finding was that Ali was going too fast given the icy conditions on the road, and he wouldn’t have been doing so had Werner trained him better. In particular, the truck wasn’t equipped with a CB, limiting the information that Ali might have received about road conditions that could have led him to slow down. And if he was going slower, according to the jury’s logic, he wouldn’t have been where he was when Salinas came careening across the media and smashed into the Werner truck.

A precedent from almost a century ago comes into play

Wright, in his arguments before the court, cited a New York precedent known as Palsgraf, which dates back almost 100 years.

The precedent in that case generally limits corporate liability for an incident that injures or kills an individual but where there is no clear reason to believe the company was at fault. “This court has repeatedly endorsed the limited duty that Palsgraf says, that the injured party has to be so situated with the wrong act that the injury to him or her might reasonably have been foreseen,” Wright said.

That could not have happened on that icy road in West Texas, Wright argued.

“If you cannot realistically travel down the highway in any kind of weather, if you have to anticipate that somebody might without warning leave the interstate … I mean, that’s why they built the interstate highway system,” Wright said in his argument, which was available through an online feed.

Could happen any time

The type of accident that occurred between the Werner truck and the Salinas pickup could happen “not just in rain or ice, but some of those happen on a dry day,” Wright said. “A tire can blow out. And so if you have to continually anticipate that, if you have to drive so that you have to be able to stop, no matter if people are running red lights against the light in our lane, what’s the point of having a highway?”

Truck driver Ali was within the speed limit, Wright argued, though the jury apparently found he should have been going slower given the weather conditions.

The Court of Appeals that upheld the Harris County verdict, Wright said, created a “duty” for drivers that had not previously existed.

One of the judges asked Wright whether Ali had any “duty.” “Yes, to the people within his zone, within his land of trouble, not just the one lane but the two lanes in the direction of his travel,” Wright said. “Now, if the car had come across a minute before and was stuck in his lane, OK, then he’s got time to react.”

The arguments of the family impacted by the crash

Darrin Walker, the attorney representing the Blake family whose members were in Salinas’ car and were killed or injured in the accident, said the “new duty” that Wright said was created by the Court of Appeals verdict was not a precedent.

“Ali’s duty was the well-established duty to operate his motor vehicle with reasonable care under all the surrounding circumstances, including weather and traffic conditions,” Walker said. The attorney referred to Ali’s “specialized training and knowledge as a professional truck driver,” though testimony in the earlier cases revealed that Ali was in his first month on the job. The conditions on the road should have led to “reasonable care [that] would require the party to desist from driving,” Walker argued.

As to the admission rule, time restraints on the attorney’s arguments – 40 minutes in total across three presentations, including a second Baker Botts attorney representing Werner – did not allow Walker to take up the issue at length. But in the brief he filed with the Supreme Court prior to the hearing, Walker argued that “given the public interest in safety on the highways, it is hard to justify a rule that immunizes employers from liability for injuries resulting from their improper training or supervision of their drivers.”

One issue that came up in Walker’s presentation was the relative speed of the two drivers. According to Walker, Ali and Salinas were traveling between 60 and 65 mph.

But according to Walker, Salinas had just entered the area of bad weather – he put the car’s time in the icy conditions at about five minutes – whereas he said Ali had been driving in a wintry mess for about an hour and had seen other spinouts and accidents caused by the conditions.

During his limited remarks on the admission rule, Walker said applying the rule “disincentives employers from training and supervising their employees,” because the rule is seen as limiting how much liability can be applied to a worker’s employer. Once a company admits a worker was acting in his or her normal employment when a potentially negligent action occurred, it limits the consideration of the company’s overall liability in the lawsuit.

If a company breaches a duty to adequately train a worker, Walker said, “and as a foreseeable result of that breach, its untrained employee causes injury, the company by that breach of duty has contributed to the harm. It is unfair to hide that from the jury.”

More articles by John Kingston

Wabash National hit with $462M verdict in trailer equipment case

Another nuclear verdict in trucking: $160M award against Daimler

Report: Driver shortage claim ‘spurious,’ fixation on efficiency causes turnover

FMCSA looks to ease regulations for jet fuel haulers

WASHINGTON — Truck drivers and aviation companies could both see cost savings benefits from a new CDL exemption proposed by the Federal Motor Carrier Safety Administration.

The proposed exemption, posted on Tuesday, would amend FMCSA safety regulations to allow states to waive the hazardous materials (HM) endorsement requirement for Class A CDL holders who haul no more than 1,000 gallons of aviation-grade jet fuel for agricultural aircraft operations.

FMCSA’s proposal was initiated by an application submitted by the National Agricultural Aviation Association (NAAA), which pointed out that the agency already waives the CDL hazmat endorsement requirement for drivers hauling diesel fuel.

When FMCSA granted NAAA’s application in December 2022 as a prerequisite to starting the formal rulemaking process for the exemption, the agency noted that both diesel and jet fuels “are similar enough in chemical characteristics” to consider extending the exception to hauling jet fuel.

“The proposal would result in cost savings for agricultural aviation operators and the drivers these operators hire to mix, load, and transport jet fuel in quantities of 1,000 gallons or less” in states that choose to allow the waiver, according to FMCSA.

“Class A CDL holders would avoid approximately $261 in costs associated with each driver obtaining an HM endorsement [see table], and agricultural aviation operators would be able to run their businesses more efficiently by making use of satellite airstrips,” the FMCSA stated.

Costs to obtain an HM endorsement. **Source: FMCSA**

NAAA explained in its application that truck drivers are needed to haul jet fuel and crop protection products to satellite airstrips nearer to the fields that need to be sprayed.

“This is necessary to save on the quantity of fuel consumed by an ag aircraft and to save aircraft flight time between the loading facility and the application site,” according to NAAA. “A shortage of available drivers may prevent using a satellite airstrip closer to the application site.”

This results in an aircraft having to travel back to its home base for each load instead of using a closer landing area, NAAA stated. “In this case, more fuel is burned to travel to the application site and more time elapses, resulting in fewer application jobs performed during the day. Therefore, the granting of the application would save considerably on fuel costs.”

In a similar proposal submitted to FMCSA in 2005 (which was ultimately denied for technical reasons), NAAA cited a survey in which one aircraft operator claimed he loses $2,500 to $5,000 per day as a result of not having an available CDL holder to haul jet fuel. In the current rulemaking, FMCSA requests updated financial data from the public.

Federal labor data shows that as of May 2023, there were 5,430 heavy tractor-trailer drivers that support crop production – although not all were involved in aviation operations. FMCSA also at this point does not know how many drivers are employed by agricultural aviation operators in the states that ultimately might choose to waive the HM endorsement requirement, if the proposed rule is finalized.

FMCSA noted as well that state driver licensing agencies could see increased costs to update their websites to reflect the HM endorsement change as well as for additional training for roadside inspectors.

Click for more FreightWaves articles by John Gallagher.

Texas dealer must pay $1.9M in taxes on Chinese-made tires, court rules

A Houston-based trucking wholesaler and retailer is responsible for $1.93 million in excise taxes for tires it bought from Chinese manufacturers in order to resell them in the U.S., the U.S. Court of Appeals for the 5th Circuit ruled.

The 5th Circuit’s opinion Monday reversed a district court ruling in September that Texas Truck Parts & Tire Inc. wasn’t responsible for the excise taxes on the tires it purchased because customs forms showed that the Chinese companies imported the tires, according to court records.

“When a party orders taxable articles to be shipped to the United States for resale and is otherwise uninvolved in the importation process, is that party the importer? We hold that they are when they derive almost all of the benefits of the importation,” the 5th Circuit wrote in its decision. “While we agree with the district court that Texas Truck did not ‘bring’ the tires to the United States as the term is used in the applicable Treasury regulation, we find that it erred by failing to consider whether Texas Truck was the beneficial owner under the regulation. We further hold that Texas Truck was, in fact, the beneficial owner, and therefore liable for the excise tax.”

Texas Truck Parts & Tires Inc. sells tractor-trailers as well as parts and tires for the trucking industry.

From 2012 to 2017, Texas Truck Parts & Tires purchased tires from Omni United PTE Ltd.; Shandong Homerun Tires Co. Ltd.; Maxon International Co. Ltd; Weifang Haichuan Imp & Exp; and Qingdao Lai Jie Rubber Trade, according to court records.

Texas Truck Parts & Tires Inc. believed the Chinese companies were the importers responsible for the excise taxes, which are duties imposed on certain goods, services and activities that can be paid by importers, manufacturers, retailers and consumers, according to the IRS.

Texas Truck Parts & Tires did not respond to a request for comment.

The company did not file quarterly excise tax returns or pay most of the excise taxes on the tires it purchased from 2012 to 2017 from the Chinese manufacturers.

Following an IRS audit, the company was assessed approximately $1.93 million in taxes.

Texas Truck Parts & Tire paid $252,100 toward its $1.93 million excise tax balance to the IRS. In 2021, the company sued the federal government for a refund to challenge its liability. The company said each Chinese tire manufacturer it purchased the tires from had a Houston-based sales agent.

Tax consulting firm RSM US said the court’s decision could introduce “stricter guidelines for U.S. businesses importing tires or other taxable goods from foreign suppliers, reinforcing the importance of identifying the true ‘importer’ for excise tax purposes.”

Check Call: It’s time for the coolest tree in town to make a scene

people gathered around a desk of computers. Check Call news and analysis for 3pls and brokers

Wednesday is the renowned Rockefeller Christmas Tree lighting. The annual production is an entire night of festive celebrations and holiday cheer for all. The tradition goes all the way back to the Great Depression in 1931. Construction workers building Rockefeller Center set up a tree at the site and adorned it with homemade decorations to boost morale and provide hope during dark times.

Fast forward to the tree-lighting ceremony of 2024 and it’s a slightly less modest affair, with a TV special and musical guests.

While everyone is focused on the celebration, getting the tree to Rockefeller Center is a feat of logistics. As far as two to three years out, the process begins. The head gardener at Rockefeller Center scouts Norway spruces in the Northeast that are at least 75 feet tall and 40 feet in diameter. This year the spruce comes from West Stockbridge, Massachusetts, lovingly donated by the Albert family.

After the spruce is selected, head gardener Erik Pauze checks in on the tree, helps care for it and ensures it’s perfect before the move to Rockefeller Center.

The same company moves the tree every year. Torsilieri Inc., a landscaping company, has been transporting the tree for years. The company has made a special lowboy flatbed trailer that hauls the 70-plus-foot tree and is responsible for delivering it into Manhattan.

The tree traditionally arrives around 2 or 3 in the morning, and with the help of the New York Police Department various streets are closed to help the extra-long trailer navigate the tight streets of the city.

Once the tree arrives, the work begins to unwrap it and begin decorating – including about 5 miles of lights and the all-important star that’s a casual 900 pounds covered in 3 million Swarovski crystals.

As for the tree’s future after Christmas? Once it’s stripped of all the decorations, it’s milled down and donated to Habitat for Humanity, where it’s used to build houses or other things the organization needs.

Some annual traditions are impressive in scope and stature, but the logistical feats behind them are almost more impressive than the events themselves. Here’s to another year of the tree bringing hope and joy to everyone.

TRAC Tuesday. The lane this week follows in the steps of the Rockefeller Center Christmas Tree, from Springfield, Massachusetts, to the Big Apple. This 138-mile trip averages about $542 all in or $3.93 per mile, before margin gets added in. While the distance is short and short lanes are a favorite among carriers, it’s still averaging $1.50 per mile higher than the National Truckload Index.

That is a little surprising given that the Outbound Tender Reject Index is 5.24% in Springfield and 4.67% in New York. Both are lower than the national average of 6.61%. However, given that Springfield is a small market and there isn’t exactly a plethora of drivers looking to drive into Manhattan, it’s understandable that spot rates would be higher than average.

Who’s with whom. It’s officially peak retail season and with it come holiday shoppers looking for deals to stuff stockings. This year shoppers are expected to start earlier as there is a short three weeks between Thanksgiving and Christmas.

International shipping giant DHL conducted a survey of small and medium-size enterprises (SMEs). Of those polled, “48% expect an increase in year-over-year holiday sales, with 14% anticipating significant growth and 34% expecting a slight uptick. Another 44% predict sales will remain steady compared to 2023, while only 8% foresee a decline. Many SMEs began their holiday preparations earlier this year, with 45% starting by Q2, compared to 39% last year.”

This season brings the challenges of managing costs and supply chain issues while still giving personalized customer service. Shippers are improving their online shopping experiences and adopting more sustainable practices as consumers become a little pickier and more conscious of what they’re purchasing.

That would probably be why the survey also found that 43% of respondents would wear a Santa suit on video calls if it means meeting sales targets.

The more you know

Borderlands Mexico: Texas bridge expansion focused on cross-border trucking

Vooma grabs $16.6M in funding as brokers prepare for market swing

Sensitive DOT documents found vulnerable to hackers

Trans-Pacific, East Coast ocean rates strong in late November

Maersk seeks ‘flexibility’ with orders for 20 ships

The world’s second-largest ocean container carrier has finalized orders for a flotilla of new ships.

A.P. Moller-Maersk in a release said it has signed agreements with three shipyards for a total of 20 container vessels equipped with dual-fuel engines.

The ships have combined capacity of 300,000 twenty-foot equivalent units, and concludes plans for owned newbuilding orders announced in August in Maersk’s fleet renewal plan.

“These orders are a part of our ongoing fleet renewal program and in line with our commitment to decarbonization, as all the vessels will have dual-fuel engines with the intent to operate them on lower emissions fuel,” said Anda Cristescu, head of chartering and newbuilding at Maersk, in the release.

The ships range in size from 9,000 to 17,000 TEUs and will feature liquefied gas dual-fuel propulsion systems.

Deliveries are scheduled from 2028 through 2030.

“Due to their different sizes, the vessels will be able to fill many roles and functions within our future network and give us a lot of deployment flexibility when they are ready to enter our fleet,” Cristescu said. “Once phased in, they will replace existing capacity in our fleet.”

Maersk also finalized charter contracts with several providers for a range of dual-fuel vessels powered by diesel and methanol or liquefied gas totaling 500,000 TEUs of capacity. The charter vessels when phased in will replace existing capacity.

Find more articles by Stuart Chirls here.

Related coverage:

Houthis attack US cargo ships

Trans-Pacific, East Coast ocean rates strong in late November

US warns of cyberthreat from China container cranes

Transportation pricing up again in November, sentiment survey shows

A white sleeper cab pulling a blue ocean container on a highway

Transportation capacity was up slightly in November, but pricing remained firmly in expansion territory, a Tuesday sentiment survey revealed.

The Logistics Managers’ Index, a monthly query of supply chain managers, registered a 52.6 reading for transportation capacity in the month. That was up 1.7 percentage points from October. Transportation utilization (60.5) ticked up less than 1 point while transportation pricing (63.8) remained near October’s two-year high.

The pricing metric faced a modest headwind as diesel prices were roughly 2% lower than in October. Transportation prices have remained inflationary in every month of 2024 except April, according to the report.

The LMI is a diffusion index wherein a reading above 50 indicates expansion while one below 50 signals contraction.

The muted sequential change rates in transportation metrics provide “further evidence that the freight market has moved back into equilibrium,” the report stated.

Transportation capacity contracted slightly in the second half of November after posting a 57.3 growth rate in the first 18 days of the month. The subindex hasn’t contracted for a full month since March 2022.

“The market has always had excess capacity ready to come online any time prices increased,” the report said. … “If we were to see Transportation Capacity contract in any month, December would be a strong candidate due to last minute holiday shopping.”

Large firms, or those identified as having more than 1,000 employees, reported ample capacity (56.7) during the month when compared to small firms (47.8). There was a similar spread in pricing disparity between the two groups, with smaller firms (69.1) signaling much higher rates.

“This suggests that smaller firms may be having difficulty securing freight on the spot market,” the report said. “This is likely due to seasonal tightness in the market and may also explain the difference we see between the two groups in price.”

Collectively, respondents returned an 80.9 one-year forward expectation for the pricing subindex.

*SONAR: Outbound Tender Reject Index for 2024 (blue shaded area) and 2023 (pink). A proxy for truck capacity, the Outbound Tender Reject Index, shows the number of loads being rejected by carriers.* *To learn more about SONAR, click here.*

SONAR: The National Truckload Index (linehaul only – NTIL) for 2024 (blue shaded area) and 2023 (pink). The NTIL is based on an average of booked spot dry van loads from 250,000 lanes. The NTIL is a seven-day moving average of linehaul spot rates excluding fuel. To learn more about SONAR, click here.

The overall LMI registered a 58.4 reading in November, up 9 points from a year ago, and marking one full year in expansion territory. The November reading was just slightly below October’s two-year high. The index has been in a tight range the past three months, which the report coined “a steady, sustainable pace.”

“Unlike many of the market shifts we observed in the past, this one was not a sudden spike stemming from an external jolt (e.g. pandemic, tax cut, international conflict),” the report said. “Instead, the story of the logistics industry in 2024 has been a healthy, organic recovery based on steady improvements in the fundamentals of the economy.”

Inventory levels (56.1) were down 3.3 points in the month but in line with normal seasonality. Smaller firms (63.4) significantly added inventory compared to larger companies, which saw no change.

Inventory costs (68.8) were up 2.9 points as more inventory is being held downstream at the retail level of the supply chain.

“Overall Inventory Levels are lower because there is less inventory in the system than there was in October, but costs are higher because a greater percentage of the inventory that remains is being held by retailers where costs are often higher due to their location closer to consumers.”

Warehousing capacity (56.7) recorded an eighth straight month of expansion while warehousing utilization (58.9) was off 4 points. Utilization was 11 points higher at downstream companies.

Warehousing pricing (68.8) was up 2.9 points to the fastest growth rate in a little more than a year.

The one-year forward predictions for the three pricing components of the LMI added up to 225, the highest level in two years, but may “not necessarily be inflationary.”

“Taken altogether, respondents are predicting a busy 2025 in the logistics industry, but with enough flex capacity that price growth will be high but not crushingly so, continuing the ongoing narrative of the soft landing and goldilocks economy,” the report concluded.

The LMI is a collaboration among Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University and the University of Nevada, Reno, conducted in conjunction with the Council of Supply Chain Management Professionals.

More FreightWaves articles by Todd Maiden:

LTL stocks sag on Q4 updates

Shares of less-than-truckload carriers were lower Tuesday after two companies provided fourth-quarter updates. The updates likely reflect the bottom of the cycle, the point where carriers are in need of more volume, or an improved freight mix, moving through their high fixed-cost networks.

ArcBest (NASDAQ: ARCB) was down 1.6% at 11:19 a.m. EST while shares of Saia (NASDAQ: SAIA) were down 2.7%. The S&P 500 was down just 0.1% at the time.

ArcBest’s network needs more freight

ArcBest’s asset-based unit, which includes results from LTL subsidiary ABF Freight, recorded a 7% year-over-year decline in revenue per day during November as tonnage fell 6% and revenue per hundredweight, or yield, declined 1%. The tonnage decline was the result of a 1% dip in shipments and a 6% drop in weight per shipment.

The November result was an improvement from an 11.2% y/y revenue decline in October (tonnage down 8.7% and yield down 2.7%), but that month was up against a much tougher comp.

Many LTL carriers benefited from a cyberattack at private carrier Estes in October 2023, which, ArcBest said in a Tuesday filing with the Securities and Exchange Commission, drove “increased business at higher prices.”

On a two-year-stacked comparison, ArcBest’s tonnage was down 12.7% in October and 15.6% in November. Both numbers are an improvement from the cycle low in May (down 20.4%).

ArcBest began swapping out transactional freight, which it took on early in the freight recession to keep the network full, with higher-yielding freight from contractual customers just ahead of Yellow Corp.’s (OTC: YELLQ) July 2023 shutdown. A lack of those higher-quality shipments in this market, however, remains a headwind.

The company’s y/y comps ease materially in the first half of 2025.

ArcBest said November results were negatively impacted by “continued weak industrial production” and as the industry has lost “higher-weight LTL shipments” to the truckload market where capacity is plentiful and rates remain low.

Lower shipment weights have been propping up the yield metrics although the company said in the filing that “LTL pricing remains rational.” It also said yields were up by a low-single-digit percentage excluding the impact from lower fuel surcharges.

The company reported a 4.6% increase on contractual price renewals in the third quarter and said a month ago that its 5.9% Sept. 9 general rate increase was seeing “really good retention.”

Quarter to date, ArcBest’s asset-based revenue per day is down 9% y/y and worse than management’s guidance for a mid-single-digit decline. However, the filing said the per-day declines “moderated in November” and the company reiterated the guide.

Revenue per day was down 5.8% y/y in the third quarter.

The asset-based operating ratio (inverse of operating margin) normally deteriorates 100 to 200 basis points from the third to the fourth quarter. ArcBest reiterated prior guidance to be at the high end of that range this year. That implies a 93% OR, 530 bps worse y/y.

ArcBest’s asset-light unit, which includes truck brokerage operations, reported a 6% y/y decline in revenue per day during November. Shipments per day were flat but revenue per shipment was off 6%. The company noted “decreased demand from existing customers” and its “strategic reduction in less profitable truckload volumes” as the culprits. It also pointed to an increase in managed transportation, where shipments (and revenue per shipment) are smaller.

Asset-light trends have improved from October when revenue per day was down 13.6% y/y. The company reiterated guidance for a $5 million to $7 million adjusted operating loss in the unit during the fourth quarter.

SONAR: Longhaul LTL Monthly Rate per Ton Mile, Class 125+ Index. Less-than-truckload monthly indices are based on the median rate per ton mile for four National Motor Freight Classification groupings and five different mileage bands. To learn more about SONAR, click here.

*SONAR: Midhaul LTL Monthly Rate per Ton Mile, Class 70-85 Index for 2024 (blue shaded area), 2023 (pink), 2022 (green) and 2021 (yellow). To learn more about SONAR, click here.*

*SONAR: Shorthaul LTL Monthly Rate per Ton Mile, Class 50-65 Index for 2024 (blue shaded area), 2023 (pink), 2022 (green) and 2021 (yellow). To learn more about SONAR, click here.*

Saia reported a 5.7% y/y increase in tonnage during November and modestly revised its October tonnage result to a 6.9% increase. Shipments in November were up 2.3% and weight per shipment was 3.3% higher. Shipments were up 4.4% in October with weight per shipment 2.4% higher.

The carrier’s two-year-stacked comps show tonnage growth of almost 15% for both months. The carrier’s y/y comps have become more formidable as the industry has lapped Yellow’s exit. The October 2024 comp also had the headwinds from the prior-year outage at Estes and the fallout from two major hurricanes.

Saia has been actively taking market share to fill the 28 terminals it acquired from Yellow. The company has also made some organic acquisitions and relocated operations into larger, better-located sites.

Saia doesn’t provide yield or pricing metrics in its intraquarter updates.

Saia previously said the newfound volumes have resulted in an inferior freight mix, pressuring margins. However, the company said on its third-quarter call in late October that it expects to outperform seasonal OR deterioration of 250 bps from the third to the fourth quarter even as it contends with incremental operating costs associated with opening and relocating terminals.

Assuming a 50-bp outperformance, the carrier would generate an 87% OR, 200 bps worse y/y.

The Tuesday updates also dragged down shares of Old Dominion Freight Line (NASDAQ: ODFL) and XPO (NYSE: XPO) by 2.5% and 1.4%, respectively. The two companies are expected to provide fourth-quarter updates this week.

More FreightWaves articles by Todd Maiden:

There’s no substitute for the right cross-border insurance

In 2023, the U.S.’s top trading partner was Mexico. That trend is continuing well into 2024, with the increased volume resulting in growing pains that have been thrust front and center on both sides of the border.

Some of the common challenges with cross-border freight are visibility, track and trace operations, cargo theft, safety, insurance coverage, and wait times at the border.

According to BSI Consulting, Mexico is now the highest-risk country in the world for cargo truck hijacking. Data from Reliance Partners’ Cargo Truck Hijacking Portal shows that reported hijackings logged by Mexico’s federal government increased by 3% in 2023.

Mark Vickers, executive vice president and head of international logistics at Reliance Partners, has highlighted the importance of Mexican cargo insurance. “It is crucial for companies to align their cross-border freight cargo insurance with a provider based in the U.S. as opposed to relying on a Mexican-based insurance company. Claims should be resolved in the U.S.,” he explained.

The two major differences between cargo policies in the U.S. and Mexico are that liability insurance is more lenient in Mexico and liability amounts there are lower.

In the United States, liability insurance is required for anyone wishing to transport cargo within the country. Mexico, however, has a chronically low motor carrier liability insurance requirement. On a shipment weighing 40,000 pounds, the Mexican carrier will only be on the hook for a maximum of around $1,250, which is pennies compared to the actual load value of the cargo. The average value of a full truckload shipment moving across the border is $60,000-$130,000. In addition, Mexican trucking companies are only liable for the damage they cause through negligence.

Vickers adds: “We have read the details in all of the top cargo insurance policies in Mexico that are issued in Mexico and the U.S. The number of exclusions in these Mexican policies coupled with the robust documentation collection process when filing claims simply gives the insurance companies too many ways out of paying claims. Many of the U.S.-issued Mexico cargo insurance policies do not take into consideration that Mexico motor carriers do not have cargo insurance, so they require the carriers to have $100,000 in motor truck cargo insurance. When a claim arises, the insurance company quickly points to the fact that these motor carriers are not compliant and that the claim will not be covered. Furthermore, if no cargo insurance is in place in Mexico, the shipper, broker and carrier will point fingers at each other until they finally agree on who will pay for it (even if a waiver of liability is signed). This is a terrible way for partners to work together and conduct cross-border transportation business. It’s an outrage, so we created Borderless Coverage.”

Borderless Coverage tackles the daunting task of ensuring that shippers, carriers or freight brokers maintain and verify Mexican cargo insurance for providers in the U.S. Some companies don’t have the ability to maintain policies in both countries, but Borderless Coverage has access to multiple U.S. underwriters that will take on cargo insurance risk in Mexico.

With Borderless Coverage, Vickers says, “In the event of a claim, the check is cut immediately to the shipper, then the Reliance team will attempt to subrogate against the motor carrier’s insurance after. If the claim occurs in the U.S., Reliance will most likely be able to subrogate against the $100,000 in motor truck cargo. In Mexico, Reliance is not going to get anything back and the policies and pricing account for this. This is important because the shipper needs capacity from its brokers and carriers. Conversely, the carriers and brokers have significant assets allocated to their shipper contracts. None of these parties can halt trade because of the volume that moves across the border. Still, shipments are held hostage and shippers withhold payments to their vendors. To the shippers that say they self-insure, I encourage them to review their deductible, which is more than likely around $100,000.” Borderless solves these issues for the cross-border supply chain.

Cross-border freight is only expected to grow as shippers nearshore more manufacturing facilities in Mexico and begin to export those goods into the U.S. For those looking to shore up cross-border operations or understand what to look for in a potential partner or relationship in Mexico, Reliance Partners is hosting the Reliance Partners’ 8th Annual Modernization of Cross Border Trade event in Laredo, Texas, on June 17, 2025.

Vickers serves as the company’s expert in cross-border insurance. He said the event will highlight some of the following topics:

What to expect from the 2026 United States-Mexico-Canada Agreement review upon the election of President Donald Trump and Mexican President Claudia Sheinbaum.
How and when to leverage cross-border warehouse space.
What cross-border investment firms are looking at in 2025.
Cross-border partner vetting.
Practical technology for cross-border in 2025.
Customs – U.S.-Mexico customs brokerage panel with Customs and Border Protection.

The event in 2024 had speakers from the Texas Trucking Association, Coyote Logistics, Schneider, Echo and C.H. Robinson, to name a few.

Those looking to get involved in the event can reach out to Vickers via email or on LinkedIn.

Click here to learn more about Reliance Partners.

Benchmark diesel price up slightly as OPEC+ meeting looms this week

The benchmark diesel price used for most fuel surcharges rose Monday by the smallest increment used by the Department of Energy/Energy Information Administration, which publishes the number.

Average retail diesel prices for the week rose 0.1 cent per gallon to $3.54. It’s the second consecutive week the price has risen.

The increase came despite the fact that outright prices in the ultra low sulfur diesel (ULSD) contract on CME have dropped significantly in the past week. After settling Nov. 22 at $2.2749 a gallon, they moved down four of the next five trading days – there was no settlement Thanksgiving Day – to settle Monday at $2.1777 a gallon, a drop of almost 10 cents per gallon, or 2 cents a gallon a day since a week ago Friday.

With the market generally seen as having been propped up by Middle East conflict, the news of a potential ceasefire between Israel and Hezbollah in Lebanon helped push markets lower last week. A stronger dollar also is a contributing bearish factor, as dollar-based commodity prices tend to move inversely from the movements in the value of the greenback.

Oil markets have been sliding as the market heads toward a full meeting of the OPEC+ group that begins Thursday. It was initially scheduled to begin Sunday but was postponed.

OPEC+ has had production cuts in place since April 2023. The OPEC+ group is made up of the OPEC nations plus a group of non-OPEC oil exporters nominally led by Russia. The group’s cut of 2.2 million barrels a day in production has been in place since the end of last year, coming on top of cuts first agreed to first in spring 2023.

Those cuts were set to be wound down on a schedule into 2025 starting in September. But that was delayed until December, and the expectation now is that it will be delayed further.

Speaking to CNBC Monday, Amrita Sen, the founder and director of Energy Aspects, said her firm believes the Thursday meeting will roll over the existing cuts and abandon plans to begin reducing them this month.

“The biggest thing is that OPEC+ will not add to a surplus market,” Sen said. She noted that inventories globally traditionally build during the fourth quarter and that Saudi officials “have always been talking about how they want to ensure the fact that inventories remain in check, and I think they will be consistent with that.”

Sen, in the interview, did not see any signs that the market is ready for a turn, based on supply/demand fundamentals. She also pushed back against market chatter that OPEC+ in general or Saudi Arabia in particular is ready to claw back market share by flooding the market, leading to marginal producers pulling back their output because of lower prices.

“I don’t buy that at all,” she said. “I think that’s definitely not what we’ve seen from OPEC+ for the last few years. Why give up all the hard work they have put themselves through?”

Sen added that there are market uncertainties: tariffs that might have an impact on demand, and sanctions on Iran and Venezuela under the Trump administration that could impact supply. “So I think OPEC+ is going to give themselves wiggle room to not announce something that ties them in for the full year,” Sen said.

One aspect of inventories that needs to be watched: the front-month to second-month spread for ultra low sulfur diesel traded on the CME commodity exchange has flipped into backwardation in recent days.

In a perfectly balanced market, the second-month price is higher than the front month, the third month is higher than the second and so on. That escalator reflects the time value of money and the cost of storage. The structure is called contango.

But when inventories are tight and the most valuable barrel is the one for the earliest delivery, the market moves into a structure known as backwardation, with the second month lower than the first, the third month lower than the second, etc.

The spread between the front month and second month in the ULSD contract has been in contango for several months. On Friday, it moved into backwardation, which could be seen as reflecting tighter inventories.

Settlement data for Monday was not immediately available, but intraday data suggests the market was in a slight contango. However, the size of the contango has been gradually tightening for weeks, which could reflect concerns about inventory levels.

Current weekly Energy Information Administration reports on ULSD inventories show stocks to be relatively healthy for this time of year.

More articles by John Kingston

Werner nuclear verdict case in Texas is hugely significant, says attorney at F3

New Jersey AG fights effort to dismiss indictment that pulled in NFI CEO Brown

Another win for brokers: No liability for Echo Global in fatal South Carolina crash

Houthis attack US cargo ships

The American military said its warships fought off attacks by Houthi militia on three U.S.-flagged merchant ships in the Gulf of Aden.

Destroyers USS Stockdale and USS O’Kane successfully defeated a range of Houthi-launched weapons while transiting the Gulf of Aden Nov. 30-Dec. 1, according to a statement Monday from United States Central Command (CENTCOM).

CENTCOM said the warships were escorting three U.S.-owned, -operated and -flagged merchant ships in the Gulf south of the Red Sea where Houthis have laid siege to commercial shipping they claim is linked to Israel. There were no injuries and no damage to any vessels.

“The destroyers successfully engaged and defeated three anti-ship ballistic missiles, three one-way attack uncrewed aerial systems, and one anti-ship cruise missile, ensuring the safety of the ships and their personnel, as well as civilian vessels and their crews,” CENTCOM said.

The U.S. forces, along with those of the European Union, have been deployed to the region to protect against attacks by Iran-backed Houthis, a Muslim fundamentalist militia based in Yemen.

Houthi media identified the targets, which it claimed were supporting the U.S. military, as the containership Maersk Saratoga, bulk vessel Liberty Grace and Stena Impeccable, a product tanker.

According to a schedule on the website of Maersk Line, the U.S.-subsidiary of A.P. Moller-Maersk, the 2,096-TEU Maersk Saratoga is on a shuttle service between Salalah, Oman, and Djibouti.

The Crowley-managed Stena Impeccable is part of the Maritime Administration’s Tanker Security Program. The program ensures a commercial fleet can readily transport liquid fuel supplies in times of need for the Department of Defense.

The Houthis said “the strikes were accurate and direct,” but they offered no further details.

Developments in Syria’s civil war are also weighing on Red Sea shipping. The Houthis over the weekend said Israel was backing the rebels who took over Aleppo, Syria’s largest city.

The Gulf of Aden-Red Sea-Suez Canal is a key trade route for vessels sailing between Asia, the Mediterranean and U.S. East Coast ports. While the route is still plied by local carriers and ships, the attacks have forced most major container lines to divert services away from the region and around the Horn of Africa.