The freight market is showing signs of recovery, reigniting interest in M&A across the logistics sector. But while non-asset brokerage deals have historically attracted private equity, asset-based trucking presents unique challenges. Craig Decker, Managing Director at Brown Gibbons Lang & Company, explains why financial engineering alone isn’t enough in asset-heavy operations and how a lack of understanding of replacement cycles and operational complexities can lead to ‘miserable’ investment outcomes. Discover what investors are now looking for in the evolving M&A landscape.

Private equity’s persistent losses in asset-based trucking come down to three compounding failures: overleveraged balance sheets, misread freight cycles, and underestimated operational complexity. Speaking on FreightWaves, Decker said the industry is now seeing a resurgence in M&A interest that began in the third quarter of last year as truckload rate indexes shifted and regulatory changes began tightening capacity — but warned that old mistakes could repeat.

Strickland argued that the core financial error is leverage. Asset-intensive trucking businesses carry fleet replacement cycles of three to five years for truckload and seven years for LTL, meaning depreciation and amortization is a real cash expense, not a paper one. When PE firms load debt onto those businesses, debt service competes directly with capital expenditure. “What they might do is extend the trade cycle on their equipment or defer some maintenance,” Decker said. “When you start doing that, that just really, really deteriorates your business, whether it be from your assets not running at the right OR to your customer satisfaction rate going down.”

A decade-plus of near-zero interest rates made the leverage math appear manageable. Decker noted that investment professionals who entered PE after the 2008 financial crisis modeled businesses against LIBOR rates of around 50 basis points — effectively 1.5% to 2% all-in borrowing costs. Those same professionals are now senior decision-makers who have not been tested in a real rate environment, making the current high-cost-of-capital era a rude adjustment.

“It’s not a good business within their holding period. Part of it is that their lifespan of their investment or their thesis on that is 3 to 5 years. It’s really too short,” Decker said.

Operational unfamiliarity compounds the balance-sheet problem. Decker cited driver turnover as one variable that PE spreadsheets routinely underestimate — the industry average runs roughly 1.8 to 2 drivers per truck per year at approximately $10,000 per driver to test, seat, and train. Insurance incident rates, weather disruptions, and customer service failures cascade in ways that cannot be modeled, he said, and PE firms that try to manage trucking companies by spreadsheet rather than through experienced operators tend to spiral downward.

The cycle timing problem is equally punishing. Decker said acquirers frequently rely on trailing-12-month financials without accounting for where a carrier sits in the freight cycle. Because of the operating leverage embedded in trucking, a 12-month snapshot at the wrong point in the cycle is, in his view, essentially irrelevant for underwriting a multi-year hold.

Where PE can succeed, Decker said, is in specialized or dedicated segments — cold chain serving pharma, hazmat, or other end markets with low price elasticity and sticky margins — rather than commoditized truckload. He pointed to the growing investor interest in those niches and noted that port diversification is adding another layer of complexity for investors, with freight increasingly routing through Savannah, Gulf ports, and Norfolk rather than solely through Los Angeles-Long Beach. “66% of our population is east of the Mississippi,” Decker said, arguing that Mid-Atlantic and Southeast logistics hubs offer lower labor costs, fewer union constraints, and better highway access than California gateways. Decker said deals are now beginning to close after what he called “4 very, very long years” of a freight recession, with brokerage transactions leading and asset deals starting to follow.

• PE firms overleveraging asset-based trucking carriers — with fleet replacement cycles of 3 to 7 years — leads to deferred maintenance and deteriorating operations when debt service crowds out CapEx.
• A generation of PE professionals who modeled deals at ~1.5–2% interest rates lack experience managing heavy-asset businesses in a high-cost-of-capital environment.
• M&A activity is rebounding after four years of freight recession, with investors targeting specialized niches like cold chain pharma and dedicated transport over commoditized truckload.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

Get ready for “Summerween”! Retailers are stocking Halloween candy in August, but it’s not just an anomaly. Sotira CEO Amrita Bhasin joins FreightWaves Today to reveal how macro challenges like tariffs and changing consumer habits (hello, GLP-1 drugs!) are pushing inventory planning earlier and creating massive overstock issues. Discover why the reverse logistics of returns is a growing sustainability problem and what brands are doing to adapt their products and marketing to these disruptive trends.

Halloween candy appearing in grocery stores in early August is not a supply chain anomaly — it is a deliberate retailer strategy driven by tariff uncertainty and front-loaded import cycles, according to Amrita Bhasin, CEO of inventory liquidation company Sotira. Bhasin, speaking on FreightWaves Today, said May was the peak month for imports in 2025 and that she expects volumes to decline for the rest of the year, a view that puts her at odds with Port of Los Angeles Executive Director Gene Seroka, who has projected a robust second half for imports.

The early-season stocking trend — dubbed “summerween” by retailers — reflects a broader shift in inventory planning as brands scramble to get goods into the country while tariff conditions are more favorable. Bhasin said the dynamic now spans nearly every consumer goods category, with Christmas decorations also expected to hit shelves significantly earlier than in prior years. “Everything is getting pushed out earlier across pretty much all consumable or consumer good categories,” she said.

The candy and chocolate category illustrates the pressures compounding at once. Bhasin said a small bag of candy at convenience stores reached upward of $20 in some ZIP codes last year, driven by spiking cocoa prices. Manufacturers responded by overbuying, leaving excess stock that now needs to move. At the same time, GLP-1 drug adoption, consumer concern over food dyes — with some manufacturers pledging to phase out certain dyes by end of 2026 — and declining appetite for high-sugar products are all suppressing demand in the category.

“I think last year we saw a big return season. Returns the last few seasons have been high. Retailers are coming up with new policies,” Bhasin said, noting that some e-commerce platforms now track return thresholds and may ban repeat offenders regardless of the dollar value involved.

The returns challenge is costly across the supply chain. Bhasin said warehouses pay $1 to $2 just to scan a single returned unit back into inventory — a significant burden when the item’s MSRP may be only $8. She added that data shows 45% to 50% of e-commerce returns go directly to landfill without ever returning to a warehouse shelf. Sotira is working with retail partners to route excess and returned goods to nonprofits via backhaul on existing truck lanes, generating tax deductions for brands and producing impact reports that companies use in investor disclosures.

Overstock is concentrated in packaged food and beverage, Bhasin said, including cereals, protein and nutrition bars, and chocolate-heavy CPG items, across the past 18 months. The firm also sees growing excess in ultra-luxury goods — handbags and prestige perfumes — as consumers question whether elevated price points justify quality. Categories performing well include fiber-enriched beverages, high-protein products, and clean beauty items, where consumers have shown a willingness to pay a premium.

On the demand side, Bhasin pointed to GLP-1 adoption as a structural shift affecting not just food but broader consumer behavior, including reduced impulse buying. She said the behavioral changes tied to these drugs are “underappreciated” and could reshape how brands market and procure products well beyond the grocery aisle. With overstock volumes already elevated and consumer spending pulling back in recent months, she argued that the inventory already sitting in U.S. distribution centers may be sufficient to supply demand through the remainder of the year.

• Sotira CEO Amrita Bhasin says May 2025 was the peak for U.S. imports and expects volumes to decline through year-end, as tariff-driven front-loading has already stocked domestic warehouses.
• Halloween candy and seasonal goods are hitting shelves in summer as retailers compress planning cycles to hedge against tariff costs and weakening consumer spending.
• 45% to 50% of e-commerce returns go directly to landfill, and warehouse processing costs of $1 to $2 per unit are pushing brands to explore backhaul donation routes for excess inventory.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

RXO CEO Drew Wilkerson reveals how recent market shifts and regulatory changes have made financial stability and extensive insurance coverage non-negotiable priorities for shippers. He explains why these factors, alongside continuous innovation and strong client relationships, are positioning RXO to capture outsized market share in both spot and contract freight, even as the market remains dynamic.

RXO’s excess liability coverage exceeding $100 million has become a front-line sales advantage as shippers tighten carrier and broker vetting in the wake of the Montgomery ruling, CEO Drew Wilkerson said in an interview with FreightWaves. Wilkerson said financial stability and insurance coverage now open every enterprise customer conversation — a shift that accelerated sharply over the past few weeks.

“I only know of 2 that have excess liability of $100 million or more” among the top 5 to 10 brokers, Wilkerson said, adding that the field of providers capable of serving large enterprise shippers at scale is narrowing quickly. He noted that the coverage threshold is not something competitors can build overnight.

“We don’t want to just scrape by on this. We don’t want to just scrape by for our customers. We want to make sure that we’ve got more than enough to be there for our customers.” — Drew Wilkerson, CEO, RXO

The liability discussion comes as RXO reported truckload spot mix of 42% of volume, with spot loads rising 900 basis points sequentially and roughly 1,000 basis points quarter over quarter — the kind of flex the company had promised investors since its spin from XPO. Wilkerson attributed the gross profit per load improvement to that spot mix shift, along with a pickup in higher-margin project and mini-bid freight and technology-driven productivity gains. Truckload volume was up 2% year over year in the second quarter, with low-to-mid single-digit year-over-year growth expected in the third quarter.

On the technology side, RXO rolled out a spot-quote agentic email tool that Wilkerson said allowed employees to process five times the number of orders quarter over quarter. He said the best-performing technology investments check all three of the company’s internal criteria: growing volume, increasing margin, and improving productivity. An AI agent now reviews installation photos from independent contract drivers in the last-mile business, though Wilkerson noted that tool primarily addresses productivity rather than margin or volume.

Wilkerson said the company keeps staffing levels calibrated to absorb 15% to 20% volume growth overnight, a posture it has maintained for the past three years heading into peak season. He described the current freight recovery as early-stage, pointing to tender rejections running at 14% to 16% on SONAR — well below the 25% to 30% levels seen in a robust upcycle — while demand remains down year over year according to Cass data. He said the company is two years into integrating the Coyote acquisition and is now focused entirely on innovation rather than integration.

On food and beverage, Wilkerson pushed back slightly on the notion that the sector is a drag, saying RXO saw year-over-year increases with those customers — though he credited market share gains rather than underlying volume growth. He cited two factors weighing on the category broadly: GLP-1 drug adoption reducing consumption and deportations shrinking the U.S. consumer base. RXO’s top customers have been with the company an average of 16 years, Wilkerson noted, a relationship depth he said is central to winning outsized spot and project volume as shippers pare down their provider lists.

• RXO carries excess liability insurance exceeding $100 million, a threshold Wilkerson says only 2 of the top 5 to 10 brokers can match, making it a decisive factor in enterprise shipper conversations post-Montgomery.
• Spot mix hit 42% of truckload volume, up ~1,000 basis points quarter over quarter, with a new agentic spot-quote tool enabling 5x more orders processed per quarter.
• Wilkerson says the freight recovery is early-stage, with tender rejections at 14%-16% on SONAR versus the 25%-30% of a robust cycle, and Q3 truckload volume growth guided to low-to-mid single digits year over year.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

The gap between spot and contract freight rates is widening, with contract rates up almost 20% year-over-year while spot rates see a monthly dip. Dive into SONAR data to understand why this isn’t just seasonal softening. We’ll explore the strategic shift to intermodal in key markets like Indianapolis and what it means for your procurement teams.

Van contract rates have climbed 19.3% year over year while NTI spot rates have dipped roughly 5% month over month — a divergence that FreightWaves’ Craig Fuller says procurement teams should not mistake for a softening market. Fuller, presenting the SONAR Update on Tuesday, Aug. 12, warned that the spot decline reflects some seasonal softening but more significantly signals that carriers and brokers are pricing forward risk into committed rates as new mini-bids and contract renewals roll in.

“Don’t get fooled by the short-term spot bit of decline,” Fuller said. “The contract rates rising is a huge part of that.” He added that procurement teams need to keep benchmarking against contract rates and prepare for the continued double-digit increases that major carriers have flagged in recent earnings calls.

Modal conversion is emerging as the market’s leading indicator, Fuller said. Truckload tender volumes are down about 2% overall, yet intermodal container volumes are up 2% in the same window — a simultaneous shift that points to deliberate shipper strategy rather than demand destruction. The 32% cost spread between intermodal and truckload rates is a primary driver, according to Zach Strickland.

“The fact that you see a 32% spread on the cost is — you can’t ignore it,” Strickland said.

Intermodal growth is concentrated in an unexpected geography. While Los Angeles volumes are up year over year, Atlanta and Chicago are posting significantly larger growth rates, suggesting the capacity crunch is pushing freight onto eastern rail corridors more than traditional west-coast import lanes, Julie Van de Kamp noted. She pointed to BNSF’s strong recent earnings and JB Hunt’s commentary as confirmation that rail is capturing meaningful share from truckload.

Van de Kamp and Strickland also emphasized that the intermodal shift may be structural rather than cyclical. Large intermodal providers have told FreightWaves that shippers who had never used intermodal are now trying it and staying. “It’s sticky. It’s very sticky, ’cause it’s not like somebody’s gonna just pull that infrastructure right back off,” Strickland said.

Indianapolis offers a case study in why headline numbers can mislead. Van rejection rates in the market have eased modestly, but the HAL Index remains above 90 and Indianapolis registers deep blue on the SONAR map — well above the national average. Reefer rejections in the market are actually still rising, reflecting the city’s heavy concentration of grocery, refrigerated, frozen, and fulfillment operations, including major Amazon and FedEx facilities. Spot rates out of Indianapolis continue to increase. “From everything I can see, Indy is still quite hot,” Fuller said.

• Van contract rates are up 19.3% year over year even as NTI spot rates fall ~5% month over month, a gap carriers and brokers are pricing with forward risk in mind.
• Intermodal container volumes are up 2% while truckload tender volumes are down 2%, driven by a 32% cost advantage that industry participants say is creating sticky, long-term modal shifts.
• Indianapolis’s HAL Index remains above 90 and reefer rejections are still rising despite a modest dip in van rejections, underscoring the need for market-level context beyond headline data.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

Overroute CEO Alex Reed explains their partnership with JB Hunt, focusing on how their AI agents are automating workflows and optimizing asset utilization. Discover Overroute’s unique “carrier-native” approach, prioritizing user adoption and empowering frontline operators with AI for maximum ROI in trucking logistics. This deep dive into supply chain innovation reveals how practical, user-focused AI is changing the game.

Overroute, an AI software company incubated through JB Hunt’s UpLabs program, has deployed its platform across hundreds of JB Hunt users spanning the carrier’s intermodal, over-the-road, and dedicated business units, Chief Executive Officer Alex Reed said in an interview with FreightWaves. The tool surfaces internal data and helps customer-facing representatives respond to requests, build reports, and manage service exceptions — work Reed described as the first phase of a broader push into asset utilization.

The deployment matters to carriers and shippers alike because it targets the hardest layer of trucking technology to crack: asset-side operations. Rather than building for brokers — typically the earliest adopters of freight tech — Overroute is working directly with one of the largest asset-based carriers in North America, giving it an unusually detailed view of enterprise workflows from the start.

Reed said the current rollout is deliberately focused on lower-risk automation. The company is piloting appointment-setting capabilities and has already tested what he called “operationally focused data gap calling.” The next phase, expected over the coming months, will move toward helping frontline transportation managers and operations managers make better decisions about driver and asset positioning across JB Hunt’s network.

“I think what I’ve seen coming in is if you look at how these decisions are getting made across the network, the most impactful place you can be is really at the frontline, the transportation managers, the ops managers, where they move the assets, they move the drivers,” said Reed.

Reed framed Overroute’s approach to automation in three tiers: tasks that can be fully automated, tasks that require human approval, and tasks that will always require a human in the loop. Track-and-trace monitoring and customer response fall into the first category today. Asset routing and driver assignment decisions are firmly in the third, at least for now. “Those decisions then compound across the network,” Reed said, arguing that improving frontline decision quality produces outsized downstream effects on backhaul positioning and network balance.

On change management — a persistent obstacle for enterprise AI deployments — Reed said Overroute focuses on demonstrating value at the individual user level before seeking executive buy-in. He likened frontline freight work to Maslow’s hierarchy of needs, with operators spending disproportionate time on low-level, repetitive tasks. “The easiest way we found is to actually show people how we can make their lives better. And then once they actually see that and they have that aha moment, then they’re able to do that,” Reed said. He added that once workers buy in, they often surface new use cases the vendor had not anticipated.

Asked about success rates for AI implementations — a sector where most projects are widely reported to underdeliver — Reed set a demanding internal standard. He said vendors entering enterprise accounts must win early and win consistently, taking on more complex and riskier use cases only after establishing a track record. “You gotta deliver because we’re all looking at this for ROI and we all know that we’re not gonna be around if we can’t deliver ROI with AI,” he said. He acknowledged that once trust is established, carriers and vendors can jointly take on higher-risk projects where occasional failures are mutually accepted.

Overroute is also in early conversations with additional carriers beyond JB Hunt. Reed said the lessons learned inside JB Hunt’s network — particularly around tool adoption at the user level rather than the executive level — are shaping how the company approaches those new relationships.

• Overroute has deployed its AI platform across hundreds of JB Hunt users in intermodal, OTR, and dedicated operations, focusing initially on customer exception handling, data retrieval, and report generation.
• Asset utilization optimization — targeting frontline transportation and ops managers making driver and load routing decisions — is the company’s stated priority for the next several months.
• Reed said AI vendors must aim for near-perfect early win rates when entering enterprise accounts, taking on riskier use cases only after establishing credibility and organizational buy-in.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.