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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convenient time for a vacation, indeed

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

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

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

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

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

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

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

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

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

How a truck driver gets stopped for inspection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Time to start inspecting in the winter

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

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

FREIGHTWAVES: That makes sense.

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

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

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

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

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

Why the Northeast is quietly running out of diesel

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

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

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

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

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

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

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

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

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

pic.twitter.com/yFYyjzYMWE
— Craig Fuller 🛩🚛🇺🇦 (@FreightAlley) May 11, 2022

#FuelShortage #DieselShortage #SupplyChainCrisis pic.twitter.com/zVmXlshXN0
— Don Ricardo 👑 🇺🇸 🇩🇴 (@NjPier) May 5, 2022

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

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

Here’s a breakdown:

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

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

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

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

Billionaire John Catsimatidis owns a small oil refinery in the US East Coast and several hundred gas stations from Pennsylvania to New York:

“I wouldn’t be surprised to see diesel being rationed on the East Coast this summer.” #OOTT #DieselCrisis https://t.co/9g1e5UIf20
— Javier Blas (@JavierBlas) May 11, 2022

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ‘everything shortage’ endures

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

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

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

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

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

Exclusive: Central Freight Lines to shut down after 96 years

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

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

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

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

Kalem agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Watch: Central Freight Lines’ impact on the LTL market

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

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

Central Freight Lines statement

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

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

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

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

Brief history of Central Freight Lines

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

Source: Central Freight Lines

Warehouse cramming is about to begin — Freightonomics

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

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

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

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

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

Seasonality pushing rejections and rates higher ahead of the Fourth

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

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

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

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

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

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

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

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

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

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

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

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

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

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

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

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

Tender rejections: Absolute level and momentum positive for carriers

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

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

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

SONAR: Capacity Trend Market Score (Carriers – VAN)

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

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

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

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

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

Freight rates: Absolute level and momentum positive for carriers

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

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

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

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

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

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

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

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

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

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

SONAR: IJC.USA

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

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

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

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

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

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

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

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

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

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

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

Project44 acquires ClearMetal to strengthen predictive tools

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

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

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

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

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

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

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

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

Click here for more articles by Grace Sharkey.

Project44 expands real-time visibility into China

Project44 reels in Ocean Insights in ‘largest acquisition in visibility space’

‘Project44’s vision has always been global’

Ocean rates creeping higher ahead of peak season

Chart of the Week: Freightos Baltic Daily Index, China to North America West Coast, China to North America East Coast SONAR: FBXD.CNAW, FBXD.CNAE

The ocean container shipping market has not been a major factor in the recent domestic freight market turbulence, but the ongoing conflict in Iran is creating a slow burn in spot rates as we inch closer to peak import season and could become a factor later in the year. .

Spot rates for 40-foot equivalent containers moving from China to North America’s East Coast have nearly doubled since late February, rising from $2,600 to over $5,000. The trans-Pacific route has increased nearly $1,400 over the same period to $3,200 as of this past week. Both lanes experienced more than a 75% increase over an eight-week period, according to the Freightos Baltic Daily Index (FBXD).

Maritime shipping disruptions have been a major factor in supply chain management strategies since the pandemic. During the height of the COVID era, importers flooded ports and railheads, congesting and ultimately breaking the infrastructure. This led to a shift in transcontinental freight share from rail to truck.

As recently as 2024, railroads were able to reclaim a large portion of transcontinental volumes as shippers extended their order lead times over concerns that Red Sea attacks were deteriorating service globally.

With overseas transit times a growing concern, shippers pushed order lead times to their highest levels since the end of COVID during the summer of 2024. Ocean transit times averaged approximately five days longer — published schedules plus delays — in July 2024 versus July 2023. Order lead times of 21 days more than doubled during that period, meaning a significant amount of freight had weeks to move domestically. This excess time favored intermodal traffic.

Suez Canal diversions have largely remained in place since early 2024, but lead times have since dropped, though not back to 2023 lows. Inventory management has shifted back toward a more just-in-time approach as warehousing costs are now significantly higher than they were a few years ago.

Tariff uncertainty brought a new level of disruption to the ocean market in 2025, just as supply chains and maritime carriers had adapted to the Houthi attacks. Spot rates were largely lower than in 2024, save for a short-lived spike in June when the most prohibitive tariffs on Chinese goods were eased. This triggered the strongest pull-forward and replenishment event in the post-COVID era, though the market managed it relatively well as rates softened quickly in July.

This latest round of rate increases appears to be largely fuel-cost driven, as capacity remains ample and shippers seem to have adapted to longer transit times, which are now averaging just below the 2024 highs.Demand has also not increased.

Import demand has been flat since early April and has largely trailed 2024 and 2025 levels, with the exception of the post-Liberation Day lull in May 2025. The traditional import peak season runs from late July into August, and there are early signs that demand has begun picking up over the past week.

Ocean rates could face additional upward pressure if demand strengthens in the coming weeks, though that pressure could be offset if the Iran conflict reaches some resolution. Service levels are steady, but transit times remain historically elevated.

Domestic transportation markets have felt little pressure from imports this year, but the risk of that changing is growing — particularly if costs rise or service deteriorates against a backdrop of leaner inventory levels.

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

“One of the Worst Software Releases I’ve Ever Witnessed.” Users Are Not Holding Back on FMCSA’s New MOTUS System

Two weeks ago, the Federal Motor Carrier Safety Administration flipped the switch on the biggest overhaul of its registration infrastructure in decades. The legacy systems carriers had used for years, including the Unified Registration System, the Licensing and Insurance public filing system, and the FMCSA Portal’s registration functions, were permanently retired at 8:00 PM Eastern on May 14, 2026. In their place came MOTUS, a single centralized platform tied to Login.gov identity verification, built to reduce fraud, tighten control over who can access carrier records, and modernize systems that had been running on infrastructure built decades ago.

That is the official version. The version playing out across social media, compliance forums, and the daily experience of carriers trying to use the thing is considerably less smooth, and the frustration is now loud enough that it has become its own story.

There's really no underfunding or legal or any kind of excuse at this point. The motus rollout has been unacceptable. It is one of the worst software releases I've ever witnessed. https://t.co/xWagwAU0hb
— Garrett 🤠 (@garrett_makes) May 29, 2026

What Carriers Are Actually Experiencing

Scroll through trucking social media right now and the MOTUS complaints are impossible to miss. They range from exasperated to resigned to darkly funny, and they share a common thread: people who need to use this system to stay compliant cannot reliably get it to work.

One carrier posted a screenshot of the MOTUS site returning a raw error, a JSON response reading “Unauthorized access,” with the question that captures the entire problem: “When are we fixing Motus? This is a consistent message. How do we comply with the rules when the system does not want to work with us?” That question is not rhetorical. It is the practical bind that thousands of carriers and the compliance professionals who serve them are sitting in right now.

Another well-known voice in the compliance community, posting a list of bugs being compiled and sent to FMCSA, did not soften it: “Alright folks, MOTUS is buggy. Like super buggy.” That same person reported building a public bug-tracking site, motusbugs.com, to document the issues in the open and feed them to FMCSA, because the volume of problems being reported by carriers had outpaced any official channel for surfacing them.

The sentiment escalates from there. One user described the rollout as “a total disaster,” saying the agency “dropped the ball and then want to play the ghosting game,” and reported fielding four phone calls in a single day from people who were in the middle of getting their own operating authority when the transition caught them mid-process. Another compliance figure was blunt: “There’s really no underfunding or legal or any kind of excuse at this point. The MOTUS rollout has been unacceptable. It is one of the worst software releases I’ve ever witnessed.”

These are not anonymous complaints from people who do not understand the system. The voices driving this conversation are also compliance professionals, the people who do FMCSA registration work for a living, who understand the old systems intimately, and who are now unable to do their jobs because the new system returns errors instead of access.

Alright folks, MOTUS is buggy. Like super buggy.

We're working directly with FMCSA on getting them a list of all the bugs that people can find.

So we built https://t.co/v0qGvsSIHy to build a PUBLIC way to see what's going on.

Lots of data to add over time, but we're…
— Ben Van Zee (@benvanzee) May 28, 2026

What MOTUS Was Supposed to Do

To understand why the frustration is landing this hard, it helps to understand what MOTUS was built to accomplish and why the agency considered it necessary.

MOTUS, Latin for “movement” or “motion,” is FMCSA’s unified registration platform, designed to replace a fragmented collection of legacy systems with a single dashboard for USDOT number applications, operating authority management, biennial updates, and name and address changes. The project traces back to MAP-21, the surface transportation law passed in 2012, which mandated a modernized registration system that has taken more than a decade to reach launch. The old system was clunky, hard to navigate and a pain. This was supposed to be the ultimate modernization tool that could replace it.

The case for it was real. The old systems were fragmented and their identity controls were weak, and that weakness had become a serious industry problem. Unauthorized account access, fraudulent carrier registrations, fake insurance filings, and chameleon carrier activity, where an operation shuts down under one DOT number to escape its safety record and reopens under another, had all become growing concerns that the aging infrastructure could not adequately police. MOTUS was designed to address exactly those vulnerabilities by tying registration to Login.gov identity verification, requiring document capture and facial verification for individual users, and adding business-verification checks tied to entity records. The Federal Register notice indicated that new applicants and roughly 800,000 existing registrants would complete identity proofing when they first use the system.

The fraud-control rationale matters and it is legitimate. The problem is not the goal, the problem is the execution and the timing.

Why the Timing Makes Everything Worse

The MOTUS rollout did not happen in a vacuum. It landed in the middle of one of the most consequential stretches for carrier compliance in years, and the convergence of events is what has turned a rough software launch into something carriers are experiencing as a genuine threat to their ability to operate.

The May 14 launch coincided almost exactly with a wave of biennial update deadlines, the twice-yearly MCS-150 filings that carriers are required to complete to keep their registration current. Carriers who sat down to knock out a routine ten-minute MCS-150 update found themselves staring at spinning wheels, invalid login messages, and error screens instead. A compliance task that used to be trivial became, for many, impossible to complete during the exact window it was due.

The identity verification architecture created a second-order problem that has caught a particular category of carrier off guard. Under MOTUS, only the designated Company Official using the same Login.gov email tied to the original FMCSA Portal account can claim the company’s MOTUS account for the first time. In a great many small trucking companies, the person who originally set up the Portal account years ago is not the person handling compliance today. The account could be tied to a former employee, a former safety manager, an outside registration service, or an email address nobody has access to anymore. When that is the case, claiming the MOTUS account becomes a support-ticket ordeal at exactly the moment the support queues are overwhelmed.

The scale of that specific problem is documented. FMCSA sent 2.2 million letters to registered users ahead of the transition, and roughly 18%, about 396,000, came back undeliverable. That is nearly 400,000 registered entities whose contact information was already out of date before the new system that depends on accurate contact and identity information went live.

And the recovery paths are slow. A carrier who lost their PIN and needs to recover it through the mail is looking at a seven-to-ten-day delay. Paper filing workarounds, where they exist, have been reported to face processing delays of at least eight business days. For a carrier whose authority or registration status is caught in the transition, those timelines are not abstract. They are days the truck may not be able to move.

FMCSA sent out 2.2 million letters to all motor carrier addresses in the US when they announced the launch of Motus, the new registration system. Over 400,000 of those letters came back as undeliverable. https://t.co/S9AYP8Zft3
— SuperTrucker 🚛💨→💻 (@supertrucker) May 22, 2026

The Connection Carriers Are Drawing to Broader Enforcement

The MOTUS frustration is not happening in isolation, and carriers are connecting it to the broader enforcement environment in ways worth taking seriously.

The same period that produced the MOTUS launch has produced an aggressive FMCSA enforcement posture, including non-domiciled CDL crackdowns, identity verification expansion in the Drug and Alcohol Clearinghouse, and a general tightening of the compliance environment. For carriers, the experience is one of being held to an increasingly strict standard by an agency whose own systems are simultaneously failing to function. The carrier’s question, “how do we comply when the system will not let us in“, is sharpened by the fact that the consequences of non-compliance have rarely been higher.

There is a real tension here that the industry frustration is pointing at directly. MOTUS was built in significant part to fight fraud and chameleon carriers, the bad actors who exploit weak identity controls. The carriers being tripped up by the rollout are, in large part, legitimate operators trying to do routine compliance work. When a system designed to catch bad actors is instead blocking good ones from basic registration tasks, the people who feel it most are exactly the people the system was not built to target.

What Carriers Should Actually Do Right Now

Frustration aside, carriers still have to operate, and there are concrete steps that reduce the risk of getting caught in the worst of the transition problems.

Confirm who your Company Official is and what Login.gov email is attached to your FMCSA records before you have an urgent filing to make. This is a common point of failure in the MOTUS transition, and it is far easier to resolve when you are not also up against a deadline. If the designated official is a former employee or an outdated email, start the process of correcting it now rather than discovering the problem when you cannot file.

If you can complete a needed registration action, do it the moment the system lets you rather than waiting. The error messages appear intermittent for many users. Access that works this morning may return an “unauthorized access” screen this afternoon. When the window is open, use it.

Document everything. Screenshot the error messages, note the dates and times, and keep a record of your attempts to comply. In an enforcement environment this strict, a documented good-faith effort to complete a required filing through a malfunctioning federal system is worth having on file if a registration lapse is ever questioned.

Do not attempt to create a new or duplicate account to work around an access problem. Duplicate or improperly claimed accounts create exactly the kind of identity inconsistency the system is designed to flag, and resolving that is harder than resolving the original access issue.

And if you rely on a compliance service or registration professional, understand that they are navigating the same broken system you are. The people compiling public bug lists and feeding them to FMCSA are the professionals in this space. Their frustration is not a sign they are not trying. It is a sign the system is genuinely not working as it should.

The Bigger Question

MOTUS will eventually work. Many large government IT modernizations go through painful launch periods and stabilize over months. Phase 3 of the rollout is explicitly dedicated to continuous improvement based on user feedback, and the bug reports being compiled now will, presumably, feed that process.

But the question carriers are asking right now is the right one to sit with: when a federal agency makes a system mandatory, retires every alternative, ties it to strict compliance requirements with serious consequences for failure, and then the system does not reliably work, where does that leave the small operator who did everything right and still cannot get in?

That is not a software question, it is a fairness question, and it is the one driving the frustration that has turned a registration system rollout into one of the loudest conversations in trucking right now. The carriers raising it are not asking for the modernization to be reversed. They are asking for the agency to acknowledge the problem honestly, fix it quickly, and extend the kind of grace on deadlines and enforcement that the situation plainly calls for while the system that everyone is now required to use is made to actually function. Even if the FMCSA would pick up the phone and not have users on 2 hour long holds, that would be helpful to the masses.

C.H. Robinson Is Removing Carriers Based on Safety Scores. A Supreme Court Decision Two Weeks Ago May Explain Why.

A notice has been going out to carriers in the C.H. Robinson network, and it is worth reading carefully because of what may sit behind it.

The message, branded under C.H. Robinson and titled “Changes to carrier eligibility,” tells the recipient that their company “exceeds intervention thresholds for C.H. Robinson’s scoring model based on data from the FMCSA.” Effective immediately, the notice states, the account is moved to non-certified status until BASIC scores improve. The carrier loses access to book loads on Navisphere Carrier and through their aligned representative immediately. Loads in transit deliver and get paid as normal. Existing payables process in full. But the ability to book new freight is gone until the safety scores come back into the broker’s acceptable range.

On its face, this reads as a safety policy update. Read against what happened at the Supreme Court two weeks before these notices started circulating, it invites a different question: is the freight brokerage industry beginning to reprice carrier risk in real time, because the legal consequences of getting that risk assessment wrong just changed permanently?

C.H. Robinson has not publicly stated that the eligibility change is connected to the Supreme Court ruling, and the company has not publicly announce additional changes. What follows is an analysis of the ruling, the notice, and the timing; and readers should weigh the connection as a strong inference supported by sequence and mechanism, not as a stated company position.

CHR is referring me to the FMCSA in order to raise my safety score before they can work with me and a lot of other carriers again.

I have 0% OOS/Violations – makes no sense. 🤷🏻‍♂️ https://t.co/QCFjMcq21o
— thewastedyears (@Thewastedyea) May 29, 2026

What the Supreme Court Actually Did on May 14

To understand why the C.H. Robinson notice is drawing attention, you have to understand Montgomery v. Caribe Transport II, LLC and the decision is more consequential for smaller carriers than almost anything else that has happened in freight this year.

On May 14, 2026, the Supreme Court ruled unanimously, 9-0, that state-law negligent hiring claims against freight brokers are not preempted by the Federal Aviation Administration Authorization Act. Justice Amy Coney Barrett wrote the opinion. Justice Kavanaugh concurred, joined by Justice Alito. There was no dissent.

The case started with a 2017 crash on Interstate 70 in Illinois. Shawn Montgomery had pulled his vehicle onto the shoulder when a tractor-trailer operated by Caribe Transport II veered off the road and struck him. Montgomery lost his leg. He sued the driver, the carrier, and the freight broker that arranged the load — C.H. Robinson. His claim against the broker was specific: C.H. Robinson negligently selected Caribe Transport when it knew or should have known the carrier posed a safety risk. Montgomery pointed to Caribe’s conditional FMCSA safety rating, with documented deficiencies in driver qualification, hours of service, vehicle maintenance, and crash rate.

For years, brokers defeated claims like this with one argument: federal preemption. The FAAAA bars state laws “related to a price, route, or service” of a broker, and brokers argued that negligent selection claims fell under that bar. The district court agreed., the Seventh Circuit agreed then the Supreme Court took the case and reversed everyone.

Barrett’s reasoning was direct. The FAAAA contains a safety exception that preserves “the safety regulatory authority of a State with respect to motor vehicles.” Requiring C.H. Robinson to exercise ordinary care in selecting a carrier, Barrett wrote, “concerns motor vehicles; most obviously, the trucks that will transport the goods.” That puts the negligent hiring claim inside the safety exception, which saves it from preemption. The shield brokers had relied on for years was gone in a unanimous decision that legal analysts described as fitting its core reasoning “on a napkin.”

The practical effect: a broker can now be sued in state court for negligently selecting an unsafe carrier, and the case can proceed on the merits rather than being dismissed early on preemption grounds. In an environment where nuclear verdicts against trucking-related defendants regularly exceed $10 million, that exposure is significant even for a company the size of C.H. Robinson.

From Reddit: an email screenshot from CHR to a carrier. I appears 3PLs are actively culling their own carrier base that doesn’t meet revised safety thresholds. A safety induced capacity crunch. pic.twitter.com/o044E1lczd
— Thomas Wasson (@ThomasWasson) May 29, 2026

Why the Ruling and the Notice Appear Connected

The C.H. Robinson carrier eligibility notice does not mention Montgomery v. Caribe. The connection, if there is one, is in the mechanism — and the mechanism is worth laying out plainly so readers can judge it for themselves.

The Supreme Court decision means a broker’s carrier selection process is now a potential source of direct legal liability. If a broker tenders a load to a carrier with poor safety scores, and that carrier is later involved in a catastrophic crash, the broker can now face a negligence claim in state court for having selected that carrier. The most important piece of evidence in that kind of case would be the carrier’s FMCSA safety data which is the same BASIC scores that C.H. Robinson’s notice references as the basis for moving carriers to non-certified status.

The sequence is what draws attention: two weeks after the Supreme Court held that brokers can be sued for selecting carriers with poor safety scores, the largest freight broker in North America began removing carriers with elevated safety scores from its board. That timing, combined with the fact that the notice’s stated criterion is FMCSA BASIC data, is why carriers and industry observers are connecting the two. It is a reasonable inference. It is not, at this point, a confirmed company rationale and this article does not present it as one.

The carrier exchanges circulating on social media this week shows how the change is landing on the ground. One carrier posted openly on X— an account whose claims have not been independently verified — that C.H. Robinson disabled access to their load board, initially unsure whether it was specific to them or “something related to the lawsuit.” In follow-up posts, the carrier said they were told by their C.H. Robinson representative that the company is referring carriers to FMCSA for safety score assessments and that many carriers are going through the same thing. The carrier’s stated frustration: that they have a clean out-of-service and violation record and still exceeded the broker’s threshold.

That detail, if accurate, points to the crux of the problem for small carriers caught in this. A carrier can have a clean out-of-service rate and pass inspections and still exceed a broker’s internal scoring threshold because the scoring model draws on the full range of FMCSA BASIC data, not out-of-service violations alone, and the threshold for what a broker will now accept appears to be tightening. The effect is less freight options for the carrier.

Why a Broker’s Threshold Would Move

Before Montgomery, a broker’s calculus on carrier safety scores balanced two things: the operational need for capacity against the relatively contained legal risk of using a carrier with mediocre scores, since preemption usually got negligent selection claims dismissed early.

After Montgomery, that balance shifts. The legal risk of using a carrier with elevated BASIC scores is no longer contained by preemption. It is a live exposure that can reach a jury. A risk-averse broker has a rational incentive to tighten its carrier acceptance threshold, reducing the population of carriers whose safety data could later be used to argue negligent selection. And after a 9-0 Supreme Court loss, the entire industry has reason to be risk-averse on this specific question.

That is the logic that connects the ruling to the kind of policy change the C.H. Robinson notice describes. Whether or not C.H. Robinson cites Montgomery as its reason, the incentive the ruling created points directly toward exactly this type of response and it points there for potentially every broker, not just one.

What This Means for Small Carriers Right Now

Regardless of C.H. Robinson’s stated rationale, the Montgomery decision changes how small carriers need to manage their FMCSA safety profile. This is no longer only about passing inspections and avoiding out-of-service orders. It is increasingly about where your BASIC scores sit relative to broker acceptance thresholds that have a clear new incentive to tighten across the industry.

Your CSA BASIC scores are now a commercial asset or a commercial liability in a way they were not three weeks ago. The seven BASIC categories: unsafe driving, hours-of-service compliance, driver fitness, controlled substances, vehicle maintenance, hazardous materials, and crash indicator all feed the scoring models brokers use to assess legal risk. A carrier who has not been actively managing those scores may have been treating them as a DOT enforcement matter only. After Montgomery, they carry commercial weight too.

The specific actions that matter now. Pull your current BASIC scores through the FMCSA portal and know exactly where you stand in each category. A score that sits below the intervention threshold for DOT purposes may still land above a broker’s commercial threshold. If you are a motor carrier and you have violations you believe were cited incorrectly, file DataQ challenges. Successfully challenged violations are removed from your record, and every violation you can legitimately remove improves your standing. If your scores are elevated, the path back is what it has always been: clean inspections accumulating over the 24-month rolling window CSA uses. What has changed is the commercial stakes attached to that cleanup.

The gap a carrier feels when a clean out-of-service record still results in lost board access is the gap between DOT compliance and commercial acceptability. For practical purposes those used to be close to the same thing. They may not be anymore.

The Bigger Picture: Capacity, Rates, and Where the Freight Goes

There is a second-order effect worth thinking through. If C.H. Robinson and other major brokers tighten carrier eligibility based on safety scores, they reduce their own available capacity at a time when the freight market has already been tightening on the supply side. A broker covering the same freight with fewer eligible carriers generally pays more to do it. The carriers who remain eligible (those with BASIC scores comfortably below the new thresholds) gain leverage. The carriers who lose eligibility lose access to a major freight source and have to rebuild it elsewhere.

This has the shape of a sorting event. It separates carriers into those whose safety profile clears the new commercial bar and those whose does not. For carriers on the right side of that line, reduced competition for broker freight is an opportunity. For carriers on the wrong side, it is a serious problem that calls for immediate attention to safety score management and likely a pivot toward direct shipper relationships and brokers with different risk tolerances while the BASIC scores are rehabilitated.

The Montgomery decision changed broker legal exposure unanimously, permanently, and effective immediately. The clearest takeaway for carriers is this: the value of a clean safety record just moved from a compliance matter toward a commercial advantage, and that shift is worth acting on now regardless of how any single broker explains its policies.

Oakland exports lead imports in April

The Port of Oakland, Calif., handled 184,492 twenty foot equivalent units (TEUs) in April, as cargo activity stabilized amid fewer vessel arrivals.

April volume edged down 198,667 TEUs in March as vessel calls declined from 86 to 80.

The port in a release credited throughput resilience in the face of evolving global shipping patterns.

April imports of 91,805 TEUs were again outpaced by exports of 92,687 TEUs.

Total cargo volume in April slipped 0.5% from the same month a year ago, when shippers frontloaded ahead of tariff deadlines. Loaded imports totaled 78,822 TEUs, while loaded exports came to 63,910 TEUs.

Year-to-date, volume through April was 742,351 TEUs, a bigger decline of 5.7% from the same period in 2025.

“April’s softer activity reflected a combination of fewer vessel calls, continued adjustments in carrier scheduling and vessel deployment, and typical month-to-month cargo fluctuations,” the port said. “Even with fewer vessel arrivals, cargo volumes remained comparatively stable, continuing a trend toward larger vessel exchanges and increased cargo movement per call.”

Maritime Director Bryan Brandes said Oakland’s diverse cargo mix helps the hub weather volatility across trans-Pacific trade markets. It’s a gateway for agricultural exports and Northern California commerce, he said.

Read more articles by Stuart Chirls here.

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How rail mega-merger moved ahead, and STB avoided making history

Union Pacific and Norfolk Southern got what they wanted, now federal rail regulators want what they have asked for.

The Surface Transportation Board on Thursday avoided what would have been an historic first – a second rejection of a merger application – which more than likely would have raised serious questions about the viability of the deal to create the first transcontinental railroad.

The markets made their displeasure known, slapping UP (NYSE: UNP) and NS (NYSE: NSC) on their collective wrists to the tune of around $7.5 billion in lost capitalization, or close to 10% of the estimated $85 billion value of the deal. Hey, everything’s more expensive these days.

But a rejection also could have stirred blowback from President Trump, who blessed the merger in an Oval Office meeting with UP CEO Jim Vena in 2025, and last week in an interview mused about the federal government possibly taking an ownership stake in the consolidated entity. The STB and Chairman Patrick Fuchs clearly didn’t want that smoke.

So the regulator asked the railroads to submit more information across a range of issues by July 27, delaying the start of formal evaluation until that time. But where the application is concerned, a baseball that’s 99% foul is still 100% fair.

To this point, for Vena and NS CEO Mark George, navigating the transcontinental two-step has been like trying to stuff an elephant through the eye of a needle. Vena has said that he doesn’t want to give away too much proprietary information about business plans to rival railroads but at the same time, this is unmapped territory for all concerned. No one’s tested the STB’s tougher rules laid down after the chaotic mergers of the Nineties; it’s not even clear how they apply in a radically changed business environment a quarter-century later. And, Vena for sure doesn’t want to give competing Class I carriers a playbook for the mergers sure to follow, which could hollow-out any gains UP and NS are going to great pains to carve out.

Railroading is a close-knit business that rightly takes pride in the fact that even 175 years after turning the first wheel on this continent, it’s the industry that helped make America into a global economic colossus. So, there’s a lot of chatter and a lot of casual talk surrounding the merger as people seek out clues to the merger’s end result.

In April I reported something I was told by one of the biggest suppliers in the business, and I’ll repeat it here: This supplier had been planning for months in expectation that NS would sell off or otherwise divest 15,000 miles of track, mostly to major short line and regional operators. That’s a suprising number as the entire NS network totals 29,000 miles. UP and NS have both denied this, but I assure you, this supplier is closely tied to the Class Is and is unlikely to make up that kind of number out of thin air.

Make no mistake, UP-NS will be the most thoroughly analyzed merger in the history of transportation, and maybe of business. Fuchs co-authored the most recent surface transportation bill and knows transportation inside and out. The STB collected 120 million separate data points before the application was even filed, including years of traffic statistics, and brought on specialists from MIT to help crunch the numbers.

One thing stakeholders agree on is that UP and NS will have to give to get, that is, whatever they’re offering in the application are just table stakes before the STB gets down to brass tacks. In a deal of this magnitude, outside of the principles, there are three types of participants: those who want to maintain the status quo; those seeking significant concessions; and others who just want to get paid.

The train gets a-rolling July 27.

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

Read more articles by Stuart Chirls here.

Related coverage:

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UP refutes new AG claims, says it provided all answers in merger paperwork

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Carrier Nussbaum sets driver pay increase; others popping up more quietly

It’s likely there have been other driver pay increases implemented before Illinois-based Nussbaum Transportation announced one this week.

But it does appear Nussbaum is the first one to talk about it so publicly.

The announcement this week by Nussbaum brought back memories of when Schneider National (NYSE: SNDR) in September 2020 said it was increasing the pay of its drivers. At the time, it wasn’t certain that it was the first one to increase compensation. But the giant carrier was the one who first did it publicly, and a wave of announced driver pay increases followed, a cascade of them that went on for months.

Joseph Anderson, the recruiting director at privately-held Nussbaum, told FreightWaves in an interview that the higher pay package announced this week was actually the second one the company had implemented in the past two months. But the April increase was not publicly disclosed, he added.

Nussbaum is not claiming to be the only carrier that has increased pay. Anderson said when it made the disclosure of its higher pay package, he received at least one call from someone he knows at another carrier who said that her company also had recently set higher pay levels for its drivers.

But from all indications, Nussbaum is the first one out there telling the world what it did.

Leading the pack

“We do think we are a little bit ahead of the pack,” Anderson said.

That driver pay is starting to increase beyond any announcements was affirmed by Leah Shaver, the president of the National Transportation Institute, one of the leading companies surveying driver compensation.

“We have received a conservative number of reported pay increases from fleets in the last four weeks, focused on base pay increases and ease of transitioning for over the road drivers,” Shaver said in an email to FreightWaves. “Based on the complaints from fleets about challenges hiring drivers beginning in Q1 and surging in Q2 and the data supporting the lack of driver hiring in the previous quarter, the pay increases are expected.”

Nussbaum has fluctuated between about 540 to 550 drivers in recent years, Anderson said. It also has a flatbed operation that a year ago was about 11 drivers, Anderson said, and is now up to about 50.

“We’ve got a large orientation group that is coming next week, and hopefully that will put us over the 550 mark,” Anderson said. “That’s basically as high as we’ve ever been.”

Nussbaum was founded in 1945, Anderson said. It largely operated out of one terminal in central Illinois. Anderson said about 30% of the company’s business is for dedicated customers.

Cuts were made at the end of 2024

The change in pay policy at Nussbaum is coming at a head-spinning speed. Anderson said the level of pay for new hires was cut as recently as December 2024. That move also came with reducing supplemental pay levels for what Nussbaum called its “key locations” where it had been paying extra to put drivers into those regions: the area between Chicago and Kenosha/Racine, Wisconsin, the Quad Cities area, Indianapolis and Columbus.

Most of the cuts came off a level that was lifted during the height of the post-pandemic freight surge, that period when the aforementioned Schneider National had kicked off the run of announced increases.

Some of those reductions were reversed in the April 2026 increases. With the new policies announced this week, the specifics are now public.

What they’re going to get

Current over the road drivers will get a 3-cent per mile raise and a $50 increase in their weekly minimum guarantee. For new drivers, the starting pay will be up 5 cents per mile with a $100 increase in the minimum.

One change is that Nussbaum has brought back its enhanced pay package for what it has dubbed its “key locations.” Anderson said between the two increases, April and May, drivers hired in those locations will see a base rate that is 10 cents per mile more than before the change in pay policy.

“Basically, the driver from Chicago who called us two months ago, what we would tell them now is that their pay is 10 cents higher per mile, and there’s an extra $200 in the weekly guarantee, and a sign on bonus of $3,000,” Anderson said.

For a driver “transitioning” from a prior employer to Nussbaum, the sign-on bonus is $3,000, paid out in steps over six months. But the offer only runs through the end of June.

For flatbed drivers, it’s a $5,000 bonus, also paid out in steps and also ending after the end of June.

Nussbaum is also offering an increased “early exit option.” If a driver moves to Nussbaum and then decides it isn’t the place to be, the company previously offered $1,000 as they departed. That will now be up to $2,000.

According to Nussbaum’s announcement, the various increases will add up to what it calls “irregular route” dry van drivers earning an additional $5,000 to $6,000 per year, “and can expect $81,000 to $92,000 their first year depending on experience.

For drivers in the key locations, it’s another $12,000 per year and $86,000 to $95,000 in their first year, “climbing to $91,000 to $100,000 by year two to grow from there,” the company said.

“Before these increases, the top 30% of Nussbaum OTR drivers were already earning an average of $100,000 per year. Nussbaum expects that number to rise significantly once the new pay takes effect,” according to the company’s statement.

Profit sharing a first

One of the biggest changes in compensation will be the implementation of Nussbaum’s first profit sharing plan with drivers.

Anderson said the profit sharing plan rolled out in this latest offering is new; there’s no comparison to what existed previously. It isn’t a fixed number. But as Nussbaum said in its prepared statement on its pay policies, it is likely to average 2 cents per mile per year, “while strong years could see 4 cents/mile.”

Driver pay increases are coming as the movement of drivers from one company to another has slowed, according to a recent blog posting by Shaver.

In a recent update, Shaver said private and for-hire fleets are finding it challenging to snag “quality drivers.”

“Fleets across the industry are finding that drivers are less willing to move, not because pay has collapsed, but because they feel their current position is on par with anything else they’d find,” Shaver wrote.

She said even during the weak freight market of most of 2025, driver pay was stable. That continued into 2026, she said.

In a recent question and answer session at an investors’ conference, Ryder (NYSE: R) CEO John Diez said the ground is being laid for higher driver pay levels.

Ryder’s Dedicated segment services the transportation needs of companies that outsource their requirements to Ryder.

Speaking at the Bank of America Industrials, Transportation and Airlines Key Leaders Conference earlier this month, Diez said the “improving freight market” will start to hit driver pay.

“You’re going to see it on the driver side with turnover and activity moving up,” he said, according to a transcript of the interview. “We have seen some of that as we exited Q1. You’ll then see sign-on bonuses to attract drivers in the marketplace. Sign-on bonuses are not broadly spread, but in select markets, we are seeing sign-on bonuses. And then later on, you’re going to see wage inflation, which will be the next part of the market dynamic.”

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DHL outsources last-mile parcel delivery to US Postal Service for $10B

A U.S. Postal Service van is parked under an apartment building canopy entrance.

The U.S. Postal Service has inked a multi-year contract valued at more than $10 billion to continue providing last-mile parcel delivery service for DHL eCommerce, which specializes in cross-border and domestic B2C shipping services for e-commerce merchants, the organizations announced Thursday.

Injecting parcels downstream into the postal system near letter carrier routes is more efficient for parcel consolidators like DHL eCommerce (XETRA: DHL) because the Postal Service already has the infrastructure to reach every home and address in the country.

The outsourcing deal bolsters Postmaster General David Steiner’s strategy of pumping up revenue rather than simply cutting costs to stabilize the postal agency’s finances after years of heavy losses. In fiscal year 2025, the U.S. Postal Service had a net loss of $9.5 billion.

Steiner on Tuesday placed a freeze on nonessential spending, such as hiring and travel, to avoid running out of cash earlier than expected after warning Congress that the agency faced a potential cash crisis within 12 months. The website 21st Century Postal Worker posted Steiner’s memo to staff members and Federal News Network was first to report on it.

DHL eCommerce’s deal follows Amazon’s agreement in early April to retain the Postal Service for last-mile delivery, albeit at 20% less annual volume than in the previous contract as Amazon expands its own ability to cost-effectively deliver in rural areas. Amazon paid the USPS $6 billion per year under the previous contract — about 7.5% of the Postal Service’s total revenue.

The Postal Service’s three largest customers for last-mile services, which includes UPS, bring in more than $8 billion in revenue each year, Steiner said during a virtual media briefing.

“We want to continue to grow out that last mile network to make it more efficient, make it faster, make it cheaper for our customers,” he said, adding that the USPS also has middle-mile and first-mile pickup capabilities available for companies that need end-to-end shipping, including returns..

Earlier this year, Steiner initiated an auction to solicit bids from a broader base of retailers and logistics companies interested in the national post delivering their parcels on the final leg to homes and businesses after changing back the rules so shippers have flexibility to drop loads at the post office level instead of upstream distribution centers. The Postmaster General argued that the organization has for too long undercharged for its most valuable asset, the last-mile network.

“We are going to tailor our network to the needs of our customers rather than telling our customers to change their business to meet the needs of our network,” he said Thursday.

Although DHL didn’t have to bid for access to the USPS’s last-mile network, the auction process did inform how the arrangement was structured.

“Through the Last Mile solicitation process, we gained significant insight into market demand and customer needs. That initiative helped validate the value of our network and highlighted opportunities to create more flexible pricing and operational models tied to our evolving last-mile infrastructure. The DHL agreement reflects many of those learnings,” Steiner said in a statement to FreightWaves.

Officials did not disclose the duration of the contract, but said it was the longest and most scalable contract the Postal Service has ever had with DHL over 25 years. The $10 billion value is also seen as a baseline, which they expect will grow much higher over the contract’s term.

DHL’s postal consolidation model

The e-commerce logistics division of Germany-based DHL Group said extending the Postal Service partnership will help it handle growing volumes as shoppers increasingly order merchandise online or on mobile devices and enable it to expand in the U.S. market. It also increases the company’s ability to move heavier packages. DHL eCommerce specializes in packages that weigh one to eight pounds because that is where it can be most cost effective.

DHL eCommerce handles nationwide pickup, sortation across 19 fully automated hubs, and linehaul through its air and ground network before handing pre-sorted containers to the USPS to complete the final mile for all deliveries. With its universal service mandate, the Postal Service reaches more than 41,550 zip codes and more than 170 million locations six days a week.

The length of the agreement is the key difference from the past, said Scott Ashbaugh, CEO of DHL eCommerce Americas, during the briefing. “Really for the first time, we’ve got a multiyear agreement. And that allows us more predictability and gives confidence to our clients that over the long term they’re in a good place with our solution.” That gives DHL “the ability to extend longer term agreements with our clients and have them feel comfortable to shift their volume from wherever they may be into the DHL and USPS networks.”

Ashbaugh explained the benefits of work sharing with the Post Service on the eCom Logistics podcast last June.

“Our expertise is that middle mile. We spent hundreds of millions of dollars building out that network and have the scale to keep it full. And that gives us quite an advantage. []As for the last mile], that USPS truck is going to every house every day. I struggle to see how it is more effective to put a new truck or car on the road to your personal address when there’s already a truck there.”

DHL eCommerce wasn’t a fan of former Postmaster General Louis DeJoy’s decision forcing parcel shippers to inject loads at centralized processing centers because it benefitted smaller operators, Ashbaugh added.

“We were going to 10,000 destination delivery units (post offices and regional hubs) every day, and you’ve got to have scale and quite a sophisticated operation to get there. So pulling us back one step to maybe 200 entry locations is a little easier to replicate,” he said.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

Amazon signs new delivery deal with Postal Service at 20% less volume

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

From regulatory shifts to on-site power: The new economics of heavy-duty EV infrastructure

Zeem Solutions CEO Paul Gioupis stands next to a Zeem-branded ABB fast charger at a commercial electric vehicle charging depot with multiple chargers and fleet vehicles in the background.

The presidential election was not kind to the commercial vehicle market. Then, the following rollback of federal regulations was unkinder.

Despite the headwinds, many operators who paused their electrification plans are returning with renewed commitment. This is particularly in California, where regulatory pressure remains intact despite shifting federal policy.

“Obviously the presidential election sent the entire industry sideways for a bit,” said Paul Gioupis, CEO of Zeem Solutions in an interview with FreightWaves. “After, let’s say, a quarter or two of settling, Zeem started picking up the pace again and came back with a nice little roar.”

The Advanced Clean Fleets (ACF) was the regulation that created an initial wave of early adopters. Those fleets purchased vehicles to comply with California’s aggressive decarbonization mandates. When federal rollbacks appeared imminent, some fleets balked. That hesitation, however, was short-lived.

“There was this sort of celebratory moment that ACF went away, then they started realizing that CARB in the state of California is going to do everything they can to keep their finger on making sure these fleets comply,” Gioupis said. “Many California fleets have realized they’re not out of the woods and they still need to think about decarbonization.”

The California Air Resources Board’s (CARB) continued enforcement means operators in the state face a fundamentally different calculus than their counterparts elsewhere. The good news for the broader industry: improved vehicle performance is driving adoption even without regulatory mandates.

“The good news is the remainder of the country wasn’t under that kind of pressure, and they’re seeing OEMs bringing product to market that performs much better,” Gioupis said. “I think it’s an inflection point year—2026.”

The Tesla Semi-sized Elephant in the Room.

The Tesla Semi has emerged as one catalyst reshaping the perceptions of what heavy-duty electric vehicles can do. Zeem has had the second-generation vehicles since December, with real-world results that challenge the skeptics.

“It’s consistently getting well over 400 miles on a full charge,” Gioupis said. “Tesla is going to bring it to market. A lot of the competitive OEMs were downplaying it, saying they weren’t serious about it, that it wasn’t going to come.”

The company’s relationship with Tesla has deepened as adoption accelerates. Zeem now buys vehicles on behalf of customers and for its own fleet. It leverages infrastructure that supports Megawatt Charging System (MCS) compatibility through V3.5 skidded charging solutions.

“Bottom line is we’ve been test driving the vehicle,” Gioupis said. “These are the second-generation vehicles. We ended up buying one of those and operating it with our fleet since December.”

Tesla’s rapid iteration stands in stark contrast to traditional original equipment manufacturer (OEM) development cycles. When drivers complained about bump-out windows that prevented handing paperwork to port officials and toll booth attendants, Tesla responded quickly.

“They came back very, very quickly, made that repair, and put in an automatic roll-down window,” Gioupis said. “I know how minimal that may sound, but for fleets it matters.”

Gioupis, who watched Tesla’s automotive division overcome early doubts as an investment banker, sees history repeating itself. He recalls when the company’s market cap fell below $1 billion and critics predicted the vehicles wouldn’t last a year.

“I feel like I’m watching that in slow motion right now with the Tesla Semi truck,” he said. “So while all the doubters—those OEMs—are coming out and saying, ‘They’re not going to build that truck, it’s not going to have that range,’ I think a lot of it was fear.”

The Power of Skids and Modernizing Infrastructure

Zeem has developed a skidded EV charging solution designed around 2.5-megawatt building blocks. These scalable, modular systems avoid the extensive ground excavation and traditional construction requirements.

“We took all that experience, all those learnings, we’ve come back and just simplified the build and modernized EV infrastructure,” Gioupis said.

This addresses a fundamental disconnect between utilities and charging depot operators. When Zeem contacts utilities in new territories, representatives often request building plans that don’t exist.

“I tell them, ‘I don’t have a building. I’m going to put in a bathroom and a lounge, but I have parking lots and I have a parking layout that I can send you,’” Gioupis said. “They don’t even know how to carry on the conversation, and they tell you, ‘I don’t even know how to get to the next level.’”

The problem stems from outdated regulatory frameworks. Utility equipment was never modernized with parking-lot charging hubs in mind.

“I simply came and said, if I’m in the middle of a parking lot, why do I have to build something that complies with being three feet away from a building?” Gioupis said. “So I have to pay all this extra money to comply with building codes, but I’m not building a building. I’m going into a parking lot.”

Predictive Power Management and Utility Partnerships

Managing power draws predictably has become central to Zeem’s operational model. The company designs sites around an “8,760 map”—understanding exactly what load profiles look like for every hour of the year.

“Take a depot like the one at LAX—we’re constantly drawing at least one megawatt, and then during peaks while we’re charging everything up we’re up there at four to five megawatts,” Gioupis said. “These fleets operate methodically on the clock. So what happens is you can understand exactly what your loads are on a site.”

That predictability creates leverage with utilities. The current rate structure penalizes operators for peak demand—even if that peak occurs only once annually.

“If you pull a megawatt and the remainder of the time you’re only pulling one hundred kilowatts, you’re pegged to a megawatt, and that’s how they tie your rate,” Gioupis said. “So what happens now is you have this nine hundred kilowatts of room you’re never using—you’re only using it one time a year.”

Night-time charging, when grid demand drops, positions fleet operators as beneficial grid participants rather than problematic peak-load drivers.

“I’m a good citizen of the grid if I’m doing that,” Gioupis said. “What I foresee is turning to the utility and saying, ‘This is what I’m going to draw, and I want you to give me special rates because I know at night, while nobody’s using it, that’s when I’m using my power the most.’”

Utilities are beginning to offer “flexible interconnection” arrangements that account for predictable usage patterns rather than worst-case scenarios.

The Role of Trucks as Distributed Energy Resources

Truck batteries represent untapped capacity for grid support and facility operations. Ten Volvo trucks at 565 kilowatt-hours each provide 5.5 megawatt-hours of available power—a substantial distributed energy resource.

“That’s a lot of power,” Gioupis said. “So if you could use that responsibly, I think that’s what you’re going to see in the future.”

Food haulers pulling $100,000 to $350,000 monthly electricity bills for cold storage represent an immediate application for peak shaving.

“If you have the trucks positioned and plugged in—and by the way, it’s always done at night—what happens is when you’re ramping up and you’re getting your HVAC systems going to cool, you go to the battery,” Gioupis said. “It’s just very intermittent. It’s not drawing the full thing. You could put the system right in place where it’s cutting right at a half a megawatt. So now your electricity bills go down significantly.”

Gioupis noted that Tom Gage, who pioneered the AC propulsion motor with Tesla and developed bi-directional charging technology, has joined Zeem’s team. Gage created a mobile battery solution that charges at Zeem depot sites and deploys to third-party locations for large-scale charging operations.

“It’s that kind of distributed energy resource—we’re going to see companies get a lot more creative,” Gioupis said. “So it’s not just charging and leasing of vehicles—that’s just the beginning of it.”

Grid resilience applications extend beyond commercial benefits. Fleets providing power back to the grid during emergencies could earn compensation—though Gioupis emphasized those arrangements require further development.

“To me, that’s the future, but that fleet should be very well compensated for doing that,” he said.

Shifting Service Models: Shared Depots vs. On-Site Infrastructure

Shared depots like the LAX facility remain essential for small and medium-sized fleets that cannot justify dedicated infrastructure.

“A lot of the small- to medium-sized fleets will never be able to build their own infrastructure—they’re always going to need that shared depot,” Gioupis said.

Larger fleets, however, are pursuing a different model entirely.

“The very large fleets, or even the medium-sized investment-grade fleets, are saying the time is here now and they want to bring that infrastructure directly on site,” Gioupis said.

The emerging approach bundles vehicles, charging infrastructure and long-term service agreements into unified contracts.

“This bundle—give me a truck or an OEM contract, wrap that up into a ten-year bow—that’s going to be the way forward, in my opinion, and that’s going to change the way logistics is done forever,” Gioupis said.

From Texas to Tennessee, manufacturers ramp up US production

A fresh wave of manufacturing and supply chain investments is sweeping across the U.S.

Over the past several weeks companies announced more than $3.6 billion in new projects ranging from automotive assembly lines and steel processing centers to dairy production plants and electric bicycle factories.

The announcements underscore continued momentum in domestic manufacturing as companies seek to strengthen supply chains, expand production capacity and move operations closer to customers.

Among the largest investments is Toyota’s proposed $2 billion expansion at its manufacturing complex in San Antonio, Texas. According to filings cited by Reuters, the automaker is seeking approval to build a new vehicle assembly line known internally as “Project Orca.”

Construction on the Toyota expansion could begin later this year, with production slated to start in 2030. The project is expected to create approximately 2,000 jobs.

MISUMI launches Americas division backed by $1 billion investment vision

Japanese industrial supplier MISUMI Group announced the launch of MISUMI Americas, a new manufacturing and supply chain organization.

The investment combines the company’s industrial components business with the AI-powered digital manufacturing capabilities of Fictiv. The move is supported by a broader $1 billion global investment initiative aimed at accelerating growth and expanding operations in North America.

MISUMI Americas will provide engineers and manufacturers access to standard, configurable and custom-fabricated parts through a unified sourcing platform designed to shorten production cycles and reduce supply chain complexity.

The company said it will leverage manufacturing hubs across the U.S., Mexico, China, India and Japan while increasing investments in advanced manufacturing and artificial intelligence.

Dave Evans, the first American appointed CEO of MISUMI Americas, said the company intends to transform traditional supply chains into “self-optimizing production systems” powered by AI and digital manufacturing tools.

Walmart opens $350 million milk processing plant in Texas

Retail giant Walmart (Nasdaq: WMT) celebrated the opening of its third company-owned milk processing facility in Robinson, Texas, representing an investment of more than $350 million and creating over 400 jobs.

The 300,000-square-foot facility will process milk sourced from regional dairy farms and supply more than 650 Walmart and Sam’s Club locations across the South Central U.S.

Walmart said the facility will strengthen supply chain resiliency while reducing the time between dairy farms and store shelves. The investment also supports the company’s broader commitment to invest $350 billion in products made, grown or assembled in the U.S. by 2031.

XPEL expands San Antonio footprint with $110 million investment

San Antonio-based XPEL announced approximately $110 million in manufacturing and supply chain investments.

The investment includes the purchase of a four-building campus totaling roughly 435,000 square feet that will serve as the company’s North American manufacturing and operations hub.

XPEL (Nasdaq: XPEL) is a global provider of protective films and coatings

The company plans to consolidate operations into the facility over the next two years while expanding in-house manufacturing capabilities. XPEL also announced the acquisition of a manufacturing facility in China to support growth in international markets.

Arkansas lands energy and steel manufacturing projects

Arkansas secured two notable industrial projects during the past month.

Italian-based CEP USA opened its first U.S. manufacturing facility in North Little Rock, investing nearly $1 million in a plant that will produce prefabricated electrical substations. The facility is expected to create approximately 27 jobs over the next five years.

Meanwhile, steel processor Ferrosource is nearing completion of a $70 million processing facility located directly on U.S. Steel’s Big River Steel Works campus in Osceola.

New York-based Ferrosource said operations are expected to begin in August and support more than 40 direct jobs and over 100 total jobs statewide. The facility will provide steel processing services for manufacturers across the Midwest and central U.S. while eliminating inbound freight costs through its mill-campus model.

Tennessee wins electric bicycle manufacturing hub

LEV Manufacturing announced plans to establish its first Tennessee operation in Algood, creating 288 jobs and investing $7 million in a 100,000-square-foot assembly, logistics and distribution facility.

The plant will serve as a central hub for production and distribution of Rad Power Bikes, Serial 1 and Life EV electric bicycles.

Company executives said the project supports a broader strategy to expand U.S.-based manufacturing while collaborating with Tennessee research institutions on battery technology, product innovation and workforce development.

U.S. factories lose over 2,000 jobs in April

Despite the flurry of new manufacturing investments, federal employment data suggests the sector remains under pressure.

The U.S. manufacturing industry lost 2,000 jobs in April, according to the Bureau of Labor Statistics, even as total nonfarm payrolls increased by 115,000 positions nationwide.

Within manufacturing, the motor vehicles and parts sector—which includes vehicle assembly plants, trailer manufacturers and motor vehicle body and parts producers—shed 3,000 jobs during the month after adding 2,000 jobs in March and 5,100 jobs in February.

At the same time, the Institute for Supply Management’s Manufacturing PMI remained in expansion territory at 52.7%, marking the fourth consecutive month of growth, with transportation equipment among the largest manufacturing industries reporting expansion.

However, ISM’s employment index fell to 46.4%, signaling continued contraction in factory hiring, while survey respondents cited geopolitical uncertainty, tariffs and rising fuel costs as headwinds.

“Demand for manufactured goods is trending higher versus last year; however, geopolitical uncertainty and rising oil and diesel prices continue to weigh on demand,” one transportation equipment manufacturer told ISM.

The mixed signals prompted concern from manufacturing advocates.

“I continue to be bullish on the future of American factory jobs with so much investment and construction underway in the sector, but the shocks caused by the conflict with Iran and efforts to accommodate China present significant headwinds,” Alliance for American Manufacturing President Scott Paul said in a news release.

Investment Snapshot

Company	Location	Investment	Jobs Created
MISUMI Americas	U.S. expansion	$1 billion	N/A
Toyota	San Antonio, Texas	$2 billion	2,000
Walmart	Robinson, Texas	$350 million	400+
XPEL	San Antonio, Texas	$110 million	Not disclosed
Ferrosource	Osceola, Arkansas	$70 million	40 direct; 100+ total
LEV Manufacturing	Algood, Tennessee	$7 million	288
CEP USA	North Little Rock, Arkansas	Nearly $1 million	27

Total announced investments included more than $3.5 billion and 4,700 jobs. (excluding projects where employment figures were not disclosed).

Torc Robotics and Mila team up on physical AI for autonomous trucks

Row of Freightliner Cascadia trucks in Torc Robotics autonomous trucking fleet

Torc Robotics announced Tuesday a new partnership with Mila — the Quebec Artificial Intelligence Institute — becoming the only autonomous trucking company to join the institute. Torc is a subsidiary of Daimler Truck AG and, as part of the partnership, will gain access to one of the world’s leading centers advancing machine learning research.

The collaboration also opens access to top-tier academic talent, including students, researchers and faculty. The partnership includes dedicated research space on site and is designed to build on Torc’s existing AI and autonomy research.

“We are excited to welcome Torc as an industry partner, as it becomes an even stronger component of Mila’s ecosystem,” said Christopher Pal, core academic member at Mila, scientific co-director of IVADO and professor at Polytechnique Montréal. “This partnership brings together academic excellence and real-world deployment, creating opportunities for our students and researchers to work on impactful challenges in physical AI while advancing the state of the art in autonomous systems.”

Mila has an alumni network of AI talent who have gone on to leadership roles at companies like Google and OpenAI. Torc will deepen its research into areas including generative world models, multi-agent behavior modeling, reinforcement learning, and foundation models for physical AI systems, the company said.

“Torc is focused on building safe, scalable autonomous trucks, and advancing the next generation of physical AI is central to that mission,” said Felix Heide, head of artificial intelligence at Torc. “As a long-time Mila collaborator, I can definitively say that partnering enables deeper collaboration at the intersection of research and real-world deployment, collaboration that supports continued progress toward commercializing autonomous trucking at scale.”

Torc is not new to Montreal and Canada, having had an affiliation with Mila since 2020.

“As autonomous vehicle technology becomes closer to a reality, it is exciting and important to see new collaborations between academic labs and top tier companies that are bringing the technology to market,” said Liam Paull, core academic member at Mila, a Canada CIFAR AI chair and associate professor at Université de Montréal, where he co-leads the Montréal Robotics and Embodied AI Lab (REAL).