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’

Trucking takeaways from Trimble: volume down, driver population sliding

NEW ORLEANS–The overview of the freight market at Trimble’s Insight conference here for customers and partners had the feel of FreightWaves/SONAR’s monthly State of Freight webinar, as experts in the field tried to peel back the reasons for the persistence of the freight recession and when the market might turn.

The panel, entitled “Transportation 2025-2026: A look back, a look ahead” even had FreightWaves and SONAR CEO Craig Fuller as a member, as he and colleague Zach Strickland comprise the featured analysts at the State of Freight webinars.

At the Trimble conference, Fuller was joined by Lee Klaskow of Bloomberg Intelligence and Angela Acocella of MIT’s Center for Transportation & Logistics to discuss a market outlook that found the panelists uncertain whether to describe it as a glass half full or half empty.

As FreightWaves does in its coverage of the State of Freight webinars, here are five takeaways from the Trimble (NASDAQ: TRMB) panel held here.

Markets reacting to the whipsaw of tariff policy

Klaskow said a word to describe what has happened to the market so far this year is “chaos.” “Going into the year, we were pretty excited after the election that the Trump administration would get us lower taxes and lower regulation,” he said. “Business behind it was going to be great.”

Markets expected there would be tariffs on China, according to Klaskow. “And then all of a sudden, tariffs were against everybody and that created a lot of uncertainty in the supply chain. We’re still dealing with that.”

“Chaos is the one thing I wasn’t expecting.”

Acocella discussed the impact of that chaos. Announcements of potential tariffs were greeted with uncertainty, she said. “Did it go through?” she said of the reaction. “Was it backtracked? How much was it going to be? And that caused a lot of uncertainty.” The result would be shippers ordering larger than usual quantities of a good, Acocella said, “but then decreasing it because now we have all this inventory but we don’t have the demand for it.”

The problem with demand

With so much focus on capacity and the possible impact on it from a crackdown on various categories of drivers, the question of volume can get lost in the shuffle. Fuller, who had made public predictions about the end of the freight recession a year ago only to see that forecast fizzle, said a key reason for that was a collapse in demand.

Enough capacity had been removed from the market that a forecast of the end to the freight recession was justified, he said. “What we did anticipate was that volume had to stay up,” he added.

But based on the SONAR Outbound Tender Volume Index (OTVI) which measures volume on a national basis, “what we’ve seen is probably the largest drop in volume, certainly since we’ve been tracking data since 2016,” Fuller said. Other indices, such as the Cass Index, are showing the same, he added.

The issue primarily is what Fuller said was a “pretty significant industrial recession.” “The question now is how long are we going to be in this pretty abysmal freight market that is not capacity-driven,” he said.

Acocella noted that previous freight recessions ended through one-off occurrences, such as the introduction of ELDs in 2017 which tightened capacity, or the freight boom set off by COVID. But for the current freight recession, she said, “we haven’t seen something big enough to really rock the entire market that increases activity.”

Trucking as a front in the immigration wars

Taking drivers off the road through enforcement of various regulations is an issue and a goal unto itself. But Fuller said it is part of a bigger picture that pushes back against immigrants and immigration on several fronts, with trucking having a key role in the discussion.

“Trucking is the sort of epicenter and ground zero for the immigration story of this administration,” Fuller said. “This administration believes immigrants are a challenge and a problem, and trucking affords the administration a safe place to have this conversation with the American public.”

The core feature of that conversation is the question of safety and immigrant drivers. An average American watching a news segment on an immigrant father “being dragged out of their homes with young children around just feels an enormous empathy with these people.”

But if the issue is whether foreign-born drivers are piloting an 18-wheeler through lax enforcement of various licensing and other laws, the conversation shifts.

“So whenever there’s a (truck) accident involving an immigrant, you’re going to have a situation where the administration is going to focus on,” Fuller said. Statististically, according to Fuller, there are about 10 accidents per week involving an immigrant driver.

The coming slide in driver numbers

There was extensive discussion about the crackdown on foreign-born drivers, whether it was through enforcement of an English language requirement or pressuring states to withdraw non-domiciled CDLs, which overwhelmingly are issued to non-American born drivers.

To get into the numbers, Fuller turned to a recent report by well-known freight economist Noel Perry that was commissioned by J.B. Hunt (NASDAQ: JBHT).

The paper written by Perry starts with an estimate that 25% of workers in trucking are immigrants, “reasoning that the difficulties of trucking work attracts immigrants, similar to those in construction and agriculture.” He then estimated that about 8% of workers in trucking are undocumented.

If the Trump administration’s efforts to remove undocumented drivers from the roads is successful, “it would reduce the driver population by almost 16%, or 614,000 drivers,” Perry wrote.

The threats to that population of drivers, Perry wrote, are withdrawal of a CDL due to a lack of English proficiency; removal of drivers for lack of documentation of legal immigration status; and ending CDLs granted to non-domiciled drivers.

Fuller noted a possible impact to removing that many drivers from the roads: an end to the parking crisis. “If we actually eliminate 600,000 drivers, how much of the truck parking problem goes away?” he said. “I think it is going to be interesting to see whether that is a persistent problem to the degree that it has been.”

Is losing drivers the catalyst toward a stronger freight market?

Kaslow, who has experience as a sell-side analyst in the freight sector, said this past summer he was “probably as pessimistic as I ever was.” But he said he is “getting incrementally more positive” and the looming contraction in capacity because of drivers being taken off the road is a key reason for that.

That has made Kaslow more confident about trucking but his views on the economy were decidedly bearish. He said many retailers have been eating at least a portion of tariffs. But that short term phenomenon may be coming to an end, he said, resulting in “more inflation and price pressures in the coming months. It will be very interesting to see how consumers react to that.”

But his pessimism was not so overwhelming that it stopped him from predicting “I think the second half next year won’t be as bad.”

More articles by John Kingston

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Harbinger lands $160M Series C, inks initial FedEx deal for 53 electric trucks

A white FedEx electric delivery truck manufactured by Harbinger, branded with green electric plug icons and "FedEx Earth Electric Vehicle" lettering, parked on a suburban street with autumn foliage and blue sky.

Medium-duty EV truck and hybrid vehicle maker Harbinger recently announced it has raised a $160 million Series C funding round. With this Series C, Harbinger has raised $358 million to date. In addition to the investment, FedEx placed an initial order for 53 Harbinger EVs.

By the end of the calendar year, Harbinger expects to deliver the chassis, which will be ready for upfit. The vehicles will be a mix of Class 5 and Class 6 models. These trucks are larger-capacity pickup and delivery vehicles, part of a larger network transformation effort by FedEx.

Harbinger notes its proprietary electric platform features acquisition costs competitive with traditional combustion engines. It offers modular battery configurations ranging from 140 to over 200 miles, and driver-centric design improvements. The vehicles include advanced safety features uncommon in medium-duty trucks, such as backup cameras with dynamic trajectory and acoustic vehicle alerting systems.

“Any vehicle that holds up to our rigorous on-road testing and offers state-of-the-art safety features with lower total cost of ownership is win-win for drivers and for our business,” said Paul Melander, senior vice president of safety and transportation, FedEx, in the release. “As we work toward a goal to electrify the entire FedEx pickup and delivery fleet by 2040, this trifecta of performance, price, and operational resilience is what we need to be able to continue to scale,” added Melander.

The investment round featured significant participation from Ridgeline, a longtime Harbinger investor backed by FedEx, along with Tiger Global; Leitmotif, a U.S. venture capital firm backed by Volkswagen; and several other venture capital firms including Maniv Mobility, Schematic Ventures, Overture Climate, Ironspring Ventures, ArcTern Ventures, Litquidity Ventures, and The Coca-Cola System Sustainability Fund, managed by Greycroft.

The focus on mass adoption and large initial order for Harbinger’s platform is notable. “Over the last two decades, medium-duty truck fleets have generally deployed small volumes of demonstration electric trucks. The industry is now ready to move to mass adoption, with Harbinger leading that scale up,” said Dipender Saluja, managing partner of Capricorn Investment Group’s Technology Impact Fund, in the release.

Harbinger’s chassis and momentum go beyond the medium-duty space. Earlier in September, THOR Industries’ operating company Entegra Coach unveiled the Embark, the world’s first range-extended electric Class A motorhome built on Harbinger’s platform. The RV integrates Harbinger’s advanced EV chassis with a low-emissions gasoline range extender, offering up to 450 miles of range.

Rail merger could raise prices, hurt US ability to compete, say GOP legislators

Dozens of Republican state legislators warned regulators that the proposed rail mega-merger of Union Pacific and Norfolk Southern threatens to raise the cost of products on everything from steel and autos to food, and hinder the ability of U.S. companies to compete on the world market.

While stating that they were committed to economic opportunity, free enterprise, and fair competition, “[T]his merger raises serious questions about its long-term impact on competition, service reliability, and the cost of doing business in America,” said legislators in the letter addressed to Surface Transportation Board Chairman Patrick Fuchs, Vice Chair Michelle Schultz and member Karen Hedlund. “If approved, the combined UP (NYSE: UNP)-NS (NYSE: NSC) system would control nearly 45% of all U.S. rail tonnage and hold dominant market share in critical commodity sectors. These commodities directly affect the cost of consumer goods, housing, energy, and food – core expenses for American families and small businesses.

“Reduced competition in these areas will inevitably lead to higher prices and fewer choices. This merger could negatively affect America’s ability to compete with China, and it has the potential to pose significant risks for the industrial and agricultural production that powers state economies and the broader American manufacturing base.”

The letter was signed by 54 GOP state senators and representatives, and comes just days after a similar letter from nine Republican state attorneys general said the merger effects could affect national security. It also follows a dominant performance by Democrats in the recent elections amid plunging voter approvals over how the Trump administration is handling the economy and concern over rising prices for groceries, energy and consumer goods.

Union Pacific Chief Executive Jim Vena this past week told a media gathering in Chicago that he was “99.999%” certain the merger would be approved. He has touted the benefits of seamless coast-to-coast service that would reduce costs, speed up freight and stimulate economic development.

“We look forward to filing our application with the STB to detail how this combination is good for America, meets the threshold of advancing public interest and enhances competition,” UP said in a statement, noting that its filing will include more than 1,900 letters of support from stakeholders, three of its unions, as well as customers and community members, “who understand how we are transforming the industry and helping ensure rail is not left behind.”

The co-signers claimed the merger would create a new generation of captive shippers, to the detriment of U.S. competitiveness.

“This loss of routing flexibility and competitive pressure would be especially harmful to smaller communities and businesses that depend on reliable rail access to stay competitive in national and global markets,” the legislators stated. “Past mergers have shown that integration challenges can lead to widespread service disruptions, with ripple effects across the entire rail network.”

The letter noted that the merger would encompass 50,000 track route- miles across 43 states, and termed “real and significant” the risks of operational breakdowns and supply chain instability.

It urged the STB to fully consider how the merger will affect workers, manufacturers, farmers and consumers, “so that increased monopolistic power does not stifle innovation and productivity in industry, put inflationary pressure on household budgets, or otherwise burden the economy as a whole with the costs of this merger.”

“We urge the Board to carefully evaluate this merger and ensure that any approved transaction clearly enhances freight rail competition, protects service quality, strengthens supply chains, improves safety, and supports a resilient freight rail system that works for all Americans.”

This article was updated Nov. 18 to include a statement from Union Pacific.
This article was updated Nov. 18 to indicate that the letter was signed by state legislators.

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Find more articles by Stuart Chirls here.

Related coverage:

Red state AGs: Rail merger could threaten national security

UP, NS shareholders overwhelmingly approve $85 billion rail merger

Latest US railfreight in the red

Rail freight faces a mixed economic signal

Truck driver coercion fear looms over sleeper berth test

WASHINGTON — Owner-operators, trucking companies, and truck safety groups are alerting the Federal Motor Carrier Safety Administration of the potential for driver coercion during testing of potential new sleeper-berth rules.

FMCSA announced in September a “flexible sleeper berth” pilot program to allow additional flexibility in how truckers split up their required rest period time in their sleeper berth.

The pilot will test sleeper berth split options beyond the current 8-hour/2-hour and 7-hour/3-hour rest-time configurations by allowing drivers to further divide their 10-hour off-duty requirement into 6/4- and 5/5- split periods.

The Owner-Operator Independent Drivers Association and the Truckload Carriers Association are both pushing for strict measures to prevent motor carriers, shippers, and receivers from forcing drivers participating in the pilot to use the provision inappropriately.

“FMCSA should clearly emphasize that discretion of split sleeper flexibility belongs to the driver and any attempts made by shippers, receivers, or carriers to coerce drivers into using the provision in an inappropriate manner will be considered unlawful,” said OOIDA President Todd Spencer in comments filed on the proposal.

“We encourage FMCSA to include a specific method within the phone apps where participating drivers can anonymously report if carriers, shippers, or receivers are abusing the provision.

TCA suggested that FMCSA maintain strict confidentiality of driver participation to minimize opportunities for coercion.

“Unfortunately, this issue is not new to the trucking industry and continues to create challenges for drivers,” wrote TCA President Jim Ward in comments to FMCSA. “We recommend that enrollment in the program remain confidential between the driver, the employing carrier, and FMCSA, with shippers, receivers, and brokers having no access to participation information to minimize opportunities for coercion.”

Ward recommended that FMCSA closely monitor its National Consumer Complaint Database to detect signs of coercion or “undue pressure on drivers” taking part in the pilot.

“It’s also important for the FMCSA to share guidelines on coercion to avoid confusion,” he stated. “Furthermore, participating carriers should take the initiative to inform their drivers of their rights and guide them through the steps to report any improper pressure they encounter.”

The Truck Safety Coalition asserted that FMCSA should create specifically for the project a way for drivers to report coercion or abuse of split-sleeper berth flexibility by their employers.

“Each driver needs the ability to report to FMCSA staff anytime this occurs,” the group stated in its comments. “Pilot program drivers must receive orientation by FMCSA staff on how to report such allegations, that they are encouraged to report, and that action will be taken in response. FMCSA must include random driver interviews, permit anonymous reporting, and utilize telematics-based coercion flags to ensure vigilance in identifying potential coercion.”

Advocates for Highway and Auto Safety, another truck safety group, is skeptical of FMCSA’s ability to monitor the pilot for evidence of driver coercion.

“The agency has been unable to address this pervasive issue throughout segments of the [trucking] industry for years despite repeated requests by driver groups and others to do so,” the group commented.

“In addition, this monitoring would cease if permanent changes to the sleeper berth requirements were implemented.”

Click for more FreightWaves articles by John Gallagher.

The AI advantage: Motive and GEICO’s fleet safety plan

Motive and GEICO are joining forces in a new partnership aimed at changing how commercial fleets approach safety and insurance costs. The collaboration pairs Motive’s AI-powered Driver Safety and Fleet Management technology with GEICO’s expanding commercial auto insurance offerings, giving businesses the opportunity to improve safety performance while earning meaningful premium savings.

The partnership arrives at a time when the economics of operating commercial vehicles are becoming increasingly challenging. Rising premiums, limited insurer competition, and the growing frequency of nuclear verdicts have driven insurance costs sharply upward across transportation, logistics, construction, field service, energy, and other sectors of the physical economy.

In 2024 alone, jury awards exceeding $10 million hit new highs, and verdicts surpassing $100 million nearly doubled. These financial pressures are compounded by persistently high roadway fatalities, with more than 44,000 preventable deaths occurring nationwide. GEICO’s expansion into the commercial market marks a commitment to reversing these trends, and Motive’s technology plays a central role in that strategy.

As a preferred partner in GEICO’s DriveEasy Pro telematics program, Motive enables new policyholders who install its AI Dashcams, Driver Safety suite, and electronic logging device tools to qualify for up to 10% savings on premiums.

The offering provides a tangible financial incentive for fleets to adopt technology that can reduce accidents, lower operational risk, and streamline claims resolution. The program is currently available to new GEICO commercial customers in select states, with plans to expand nationwide throughout 2026.

For Motive, the partnership reinforces the company’s broader mission to use AI to make frontline workforces safer and more productive. Ian White, Motive’s Head of Insurance Partnerships, emphasized the urgency behind the effort: “Driver safety is central to Motive’s mission to build AI-powered tools that make work safer, more productive, and more profitable. With distracted driving at an all-time high, organizations need AI-powered Driver Safety technology they can trust. Partnering with GEICO turns safety into a business advantage, unlocking risk insights, lowering costs, and most importantly, preventing accidents on the road.”

GEICO, which has traditionally been known for its dominance in personal auto, continues to deepen its foothold in the commercial sector. Rishi Arora, the company’s Head of Commercial Product & Pricing, said that, “As we expand our commercial trucking insurance offerings nationwide, partnerships like this with Motive are essential to delivering the comprehensive protection and value that trucking professionals deserve. Incentivizing GEICO policyholders to install Motive’s safety and fleet management technologies underscores our shared mission for improving road safety.”

Motive’s platform, already used by nearly 100,000 customers ranging from small businesses to major global enterprises, brings together driver behavior insights, vehicle health monitoring, fuel and maintenance management, compliance tools, and operational data into a unified system.

For insurers and fleet operators alike, this creates an ecosystem that supports faster claims processing, more accurate assessments, and enhanced visibility across assets and workflows. The benefits extend to exonerating drivers through clear video evidence, preventing accidents by identifying risky behaviors before they become incidents, and automating driver coaching through AI-generated feedback.

Reelables has Series A at $10.4 million to upgrade supply chain tracking with smart labels

Reelables is stepping into its next chapter with fresh capital and a clearer mandate: scale fast and redefine how the supply chain sees itself. The London-based company, known for pioneering a fully printable active smart label, announced a $10.4 million Series A round that positions it to accelerate manufacturing, deepen engineering resources, and bring its thin-film tracking technology to global scale. It caps off a year in which the company grew more than 200%

The company’s smart labels stand out in a crowded tracking market because they challenge the long-held assumption that active tracking requires bulky hardware, battery swaps, or hands-on scanning.

Reelables has reached mass production of a new class of ultra-thin, wireless labels built on flexible batteries and designed to run through the same printers supply chain operators already rely on. The result is a Bluetooth and 5G label that’s as thin as paper, disposable after use, and capable of delivering item-level visibility with complete accuracy. For logistics providers, retailers, and manufacturers, especially those handling sensitive or high-value goods, the promise is a step change in transparency, theft reduction, and operational control.

The company argues that many tracking platforms today still demand too much friction. Traditional cellular trackers often require pairing, charging, or additional steps that simply don’t fit workflows moving thousands of parcels an hour. Reelables’ 5G label sidesteps those constraints by doubling as the shipping label itself.

For freight forwarders, 3PLs, and other operators with their own infrastructure, this keeps costs and labor overhead low while making high-volume smart labeling actually feasible. For manufacturers and consumer brands that need precision without building or managing that infrastructure, the label offers an accuracy level designed to ensure deliveries land exactly where they’re supposed to.

As Reelables prepares to scale production toward its goal of 100 million labels per year, the company has also added new leadership to guide its next phase. Tom Carter, an industry veteran with experience across IoT, SaaS, telecom, and AI, has joined as Chief Operating Officer. Carter has a track record of growing technology organizations through product complexity and market expansion, bringing experience from roles at AskPorter, Ostmodern, and Drayson Technologies.

Co-founder David Stanton says, “The advanced manufacturing process of our active smart labels enables us to deliver scalable and cost-effective tracking solutions, empowering our customers to achieve real-time supply chain visibility. The new round of funding and support, combined with Carter’s expertise, will allow us to expand our production, improve partner engagement, and introduce new solutions for our customers currently under development.”

Reelables’ investors share the conviction that the market is shifting toward lighter, simpler, data-rich tracking solutions. Ross Sabolcik, Senior Vice President of Product Lines at Silicon Labs, notes that smart label technology is beginning to reshape how companies understand product movement: “Smart label technology is transforming supply chain transparency and empowering businesses with better data. Reelables’ innovations have the potential to not only improve product tracking and efficiency but also foster greater trust and reliability across vital sectors like retail and pharma. Reelables has honed in on an exciting asset tracking market, which is expected to reach $88B by 2033.”

Why Demand — Not Truck Attrition — May Decide the Fate of Small Carriers in 2026

For the past year, there’s been a steady belief floating around the industry that once enough capacity leaves the market, rates will finally rise. It sounds reassuring. It sounds straightforward. But it’s also dangerously incomplete. Because the reality small carriers deal with every single day tells a different story: capacity exits are temporary, but demand is structural. And only one of those truly has the power to fix the market in any lasting way.

Capacity Exits Give You Sugar Highs — Not Sustained Market Strength

When small carriers shut down, the spot market sometimes tightens. Maybe rates bump. Maybe they don’t. But even when they do, it doesn’t necessarily hold long term.

Why?

Because capacity exits are emotional events.

Carriers quit when rates are low.
Carriers return when rates rise — even slightly.
Fleets park trucks… then redeploy them when they smell opportunity.
New MCs open the second they see a lane improve by 20 cents.
Mega carriers shift trucks across regions instantly.

And spot-market carriers, especially, react to short-lived windows. That’s why every “capacity-driven rate strengthening” since deregulation has burned out.

Capacity moves fast. Demand moves slow.

When fast meets slow, fast loses.

Demand Is the Only Force That Creates Long-Term Market Health

Demand isn’t emotional — it doesn’t solely react to fear, frustration, or short-term rate swings. Demand is structural. It’s rooted in the deeper forces that actually move freight across the country. Those forces include retail inventory investment, which determines how aggressively stores and distribution centers reorder product. Manufacturing output and industrial production create a steady stream of raw materials and finished goods that must move across regional networks. Consumer goods spending influences how busy warehouses and parcel hubs become. Housing starts drive lumber, shingles, appliances, and fixtures. Import and export volume shifts freight flow across ports, rail networks, and long-haul lanes. Government infrastructure cycles produce multi-year boosts in construction freight. E-commerce seasonality shapes regional surges. And wholesale replenishment behavior determines whether DCs are drawing down inventory or restocking aggressively.

These are the true engines of freight. When they pick up, freight volume rises in ways that endure. And when freight grows, that growth spills into the spot market in a way that’s sustainable — not fleeting. Capacity exits might amplify that strength by tightening the truck-to-load ratio, but they can never create demand on their own. Removing trucks doesn’t make shippers order more, doesn’t make retailers restock sooner, and doesn’t make factories increase output.

Why the COVID Freight Boom Proved Capacity Exits Aren’t the Savior

Let’s revisit COVID — but from a look back this time, with the nuance the industry tends to skip.

Phase 1 — Demand Shock

People stayed home, stimulus money hit, E-commerce skyrocketed and retailers panic-shipped everything they could get. Demand didn’t just rise it exploded.

Phase 2 — Inventory Overbuild

Retailers ordered too much, warehouses stuffed to the rafters, DCs couldn’t breathe, and this created huge sustained freight volumes.

Phase 3 — Temporary Capacity Tightening

Some carriers parked early in the pandemic and this amplified the initial rate surge. But it wasn’t the cause.

Phase 4 — Capacity Flooded Back In

Rates were too attractive, many saw an opportunity, and tens of thousands of new authorities hit the market each month at times.

Non-domiciled CDL holders entered at scale, adding even more available drivers into an already frothy capacity pool.

Phase 5 — Demand Normalized

People stopped buying pallets of goods, retailers corrected inventory and supply chains finally stabilized.

Phase 6 — Oversupply Crushed Rates

It wasn’t the capacity exits that drove the COVID boom —It was demand.

And when demand faded, the capacity flood erased the lift entirely.

If COVID taught us anything, it’s this:

Rate spikes created by demand sustain themselves while rate spikes created by capacity vanished.

The Non-Domiciled CDL Factor — And Why It Matters to This Conversation

From 2018–2024, the U.S. saw a massive influx of non-domiciled CDL holders.

This is not an opinion — this is a statistical reality. These drivers entered the workforce primarily through:

State-level licensing in high-volume issuance states
Employment Authorization Document (EAD) pathways
Large fleet recruiting pipelines
School-to-carrier direct entry systems

This influx effectively added thousands of additional drivers into the capacity pool — often at a time when domestic trucking was already oversupplied.

Now, with the FMCSA’s non-domiciled CDL rule under legal challenge, and the potential future removal of many existing non-domiciled CDL holders from eligibility, we are staring at what could be a major forced capacity exit overnight.

Here’s how it ties to the core argument:

If these drivers suddenly exit the market while demand is still flat or lagging, we’ll get a temporary tightening —but NOT a sustainable recovery. Why?

Because fleets will simply:

Shift existing domestic drivers
Recruit aggressively
Raise sign-on bonuses
Push productivity
Add capacity through lease-purchase
Reopen sitting trucks
Pull experienced drivers from gig or local work back into OTR

Just like every other capacity-driven event, the market will correct itself long before demand builds.

In other words: Removing 50,000–150,000 non-domiciled CDL drivers does not fix the trucking market long term unless demand rises at the same time.

It may feel like it helps but may only temporarily lift rates. And that it is not a long-term solution.

Why Capacity Exits + Flat Demand = Long-Term Pain for the Spot Market

Let’s discuss what really happens when capacity exits but demand is stagnant.

Scenario 1 — The “Rate Tease”

When capacity shrinks, rates usually bump just enough to give truckers a spark of hope. The problem is that the moment those rates inch upward, people return back into the market—parked trucks are put back into service, sidelined drivers return, and big fleets redeploy equipment to chase the uptick. But because demand hasn’t actually improved, the total amount of freight in the system hasn’t grown. It’s the same pie, just sliced thinner. With more trucks once again fighting for the same amount of freight, the brief rate lift collapses, and we’re right back where we started. It’s a cycle this industry has lived through dozens of times, and it always ends the same way.

Scenario 2 — Big Fleets Take the Slack Before Small Carriers Can Benefit

When small carriers exit the market, it’s easy to assume that tightening capacity will finally create breathing room for the spot market. But that’s not what happens. The moment those trucks disappear, the larger carriers move fast: they swoop in to capture mini-bids, lock down contract freight, absorb the volumes once handled by defunct carriers, and negotiate long-term deals. By the time spot carriers start to feel like “the market is tightening,” the large asset carriers have already stepped in and absorbed a big portion of oxygen in the room.

Scenario 3 — How Returning Capacity Undercuts the Market

When carriers who previously shut down re-enter the market, they often do so under financial pressure. That pressure leads many of them to accept cheaper rates, fight aggressively for every posted load, and underbid carriers who have remained stable. They’ll take freight that would normally be refused, including low-margin loads, bad backhauls, and lanes that don’t cover operating costs—simply because they need immediate cash flow. This behavior pushes lane pricing downward, undermining any temporary rate lift caused by earlier capacity exits. And in a weak-demand environment, the market cannot absorb this returning capacity, which causes rates to fall back almost as quickly as they rose.

Scenario 4 — The Freight Desert Problem

Pulling capacity out of a dead zone doesn’t magically create freight. It doesn’t spur demand. It doesn’t bring shippers back. A market without customer activity stays dry regardless of how many trucks leave.

Only rising demand — from consumers, industry, trade, or seasonal cycles — brings life back to a region. Until that happens, pulling trucks out simply means fewer carriers fighting over the same handful of bad options.

What Will Actually Trigger a Real Recovery?

Here’s the truth: the freight market only recovers for the long haul when freight actually needs to move — not simply when trucks leave the road. Capacity can tighten the market for a moment, but without real freight volume behind it, nothing meaningful sticks. The only time the spot market genuinely strengthens is when the broader economy creates enough freight to shift the balance.

So instead of watching how many MCs are shutting down, the real signal for small carriers is whether the underlying drivers of freight demand are climbing. That means keeping an eye on whether retail is beginning to restock after a long period of inventory reduction. It means watching if housing and construction are picking back up, because building materials and fixtures feed flatbed, van, and regional freight all at once. It means tracking any signs of a manufacturing rebound, since factories generate some of the most consistent and diverse freight in the country. Rising import activity is another major indicator — more containers coming through the ports eventually translate to more truckloads moving inland.

Final Thought — You Can’t Build a Future on Temporary Lifts

Capacity exits happen fast because they’re driven by emotion — fear, frustration, debt pressure, and survival instincts. Demand doesn’t work like that. Demand is structural. It builds slowly, shifts gradually, and reflects deeper economic forces. Capacity behaves like waves, rising and falling with every rate swing. But demand is the tide. And small carriers don’t need more waves beating them up. They need the tide to finally turn back in their favor.

Federal actions may soon shrink the driver pool. Economic pressure may push more carriers out. Regulatory shifts might tighten capacity around the edges. Those events can bring short-term relief, and you might feel it on the load board for a little while. But none of that creates a sustainable recovery on its own. Because sustainability only comes when there’s more freight to haul — not when there are fewer trucks available to haul it.

You don’t build a future in trucking by hoping other carriers fail. That’s not a strategy. The carriers that survive these cycles are the ones positioning themselves now — building relationships, tightening expenses, choosing the right lanes, and staying operationally sharp — so they’re ready when demand finally returns. And demand will return. It always does. But the real turning point won’t happen because trucks left the market. It’ll happen because freight came back into it.

Lineage announces Texas cold-storage facility amid tariff turbulence

Temperature-controlled warehouse operator Lineage Inc. has begun construction of an automated cold-storage facility near Dallas — an expansion that comes as the company scales its U.S. footprint while navigating a softer financial outlook tied to tariff pressures.

The facility, located in Hutchins, Texas, is the first of two next-generation automated warehouses Lineage plans to design, build and operate for a long-time customer. The site will feature advanced automation and is expected to open in late 2027, according to a news release.

“Dallas has long been a key market for Lineage, serving as a critical connecting point between food producers and the global food supply chain,” Tim Smith, chief commercial officer at Lineage, said in a statement.

The facility is located in the Prime Pointe Park, adjacent to Union Pacific’s Dallas Intermodal Terminal — positioning Lineage to serve both domestic and cross-border markets. The facility will extend its reach in a region that can access most of the U.S. population — and major export corridors into Mexico — within one to two days, the company said.

The Dallas project follows another major expansion just weeks earlier at Lineage’s cold-storage campus in Hobart, Indiana — now the company’s largest facility in North America after adding 188,000 square feet and 58,000 pallet positions.

In August, Lineage also expanded capabilities at a Port of New Orleans facility allowing it to act as both a customs bonded warehouse, as well as a USDA-approved import house.

Lineage (NASDAQ: LINE) operates more than 485 temperature-controlled facilities globally, with 3.1 billion cubic feet of space. It also provides freight forwarding, customs brokerage, drayage and truck transportation.

The company’s expansion push comes as its near-term outlook has softened. Earlier this month, Lineage trimmed the high end of its full-year 2025 guidance, citing persistent tariff uncertainty and elevated food prices that are prompting many customers to hold less inventory.

Lineage posted a third-quarter net loss of $112 million, though consolidated revenue climbed 3% year over year to $1.38 billion. Physical occupancy remained at 75.2%, slightly below last year but improving sequentially. With seafood importers and other food customers trimming stock levels into year end, pallet throughput declined 2% year over year.

“In spite of continued pressure from tariffs, consumer price inflation and other headwinds, consumer demand for the products that flow through our network has been and continues to grow,” Rob Crisci, chief financial officer of Lineage, said during the company’s third-quarter earnings call with analysts on Nov. 5.

The Load Board Goes Down, Now What?

When you’re a one-truck owner-operator or a small 3–5 truck fleet, your morning rhythm is clockwork: coffee, pre-trip, open the load board, refresh, refresh again, stare at the rates, call brokers, negotiate, roll.

But all it takes is one outage—DAT glitches, Truckstop freezes, the phone app crashes, or the entire system goes offline—and you’re stuck. Not moving, not booking, not earning.

The worst part? It always seems to happen at the exact wrong time:

End of your reset
You’re empty in a major market
You’re trying to get home
You’ve already turned down two loads because something better “should be coming”

A load board outage makes you feel powerless. Like your business disappeared in a single update. But this article is your map out of that panic. It’ll walk you through what to do in the moment, and then show you—step-by-step—how to build a freight pipeline where outages stop being emergencies.

Because the truth is simple:

If you rely on a load board for 100% of your freight, your business is always one outage away from a crisis.

Let’s fix that.

Part 1 — What To Do Immediately When the Load Board Goes Down

This is the survival section. The “what do I do right now?” moment.

Here’s your playbook.

1. Stop refreshing. Start calling.

You already know the brokers you’ve worked with in the last 60–90 days. Pull those rate cons up. Those email addresses. Those phone numbers. Those signatures at the bottom.

Pick up the phone and say:

“Hey, this is Adam from ABC Freight. Load boards are down and I’m in [CITY/STATE]. Do you have anything coming out of here today?”

No fancy speech. No script. Just direct, honest, and familiar.

Brokers are dealing with the outage too. They still have freight. They still need trucks moved. Some of them are in full panic mode because they can’t post their loads.

You calling them = you being early.

You’d be shocked how often you can snag a load before it ever hits the board because you’re the one who called.

2. Hit your “regular lanes first.”

Think of your most common routes:

Chicago to Atlanta
Dallas to Houston
Charlotte to Philly
Indy to Columbus

If you know those lanes well, start with the brokers who typically book you there.

Run through them in order:

The reliable ones
The ones who pay decently
The ones who know your MC by heart

This keeps your search tight, fast, and realistic.

3. Use your email as a second load board.

Search these words in your email inbox:

“Rate con”
“Load Confirmation”
“Attention Carrier”
“Carrier Packet”
“Previously Booked”
“Shipment ID”
“Tendered”

You’ll instantly surface every broker you’ve worked with that is in your inbox/deleted box.

These are the people who already know you’re real, that your insurance clears, that you built some sort of rapport with.

Those relationships are more valuable during an outage than any load board.

4. Call the broker’s carrier rep, not the main number.

If you have saved contacts on your phone—dial direct.

Some carrier reps may panic during outages because their whole job depends on moving freight.

When you call them directly, without going through the operator, you jump the line.

5. If you’re near a popular shipper or DC—physically go there.

I know this feels “old school,” and is a very last resort, but old school still works in some instances:

Big distribution centers
Major food warehouses
Beverage depots
Paper mills
Construction materials hubs

Park, walk in (if allowed), and ask which brokers typically handle outbound loads.

Old-school networking works when the digital world breaks. Nothing like a real carrier talking to a real shipper about freight.

Part 2 — After the Outage: Fix the Real Problem

Load board dependence.

Many small carriers never build a predictable freight pipeline. They “survive the day,” but they never build a system that protects them from:

Load board outages
Slow freight days
Predatory brokers
Oversupply markets
Post-holiday collapses

This is where your business either matures—or stays stuck.

Let’s build you a Broker Book of Business, step by step. This is for those who don’t feel comfortable going direct to shipper, but still want a sense of consistency.

Part 3 — How to Build a Broker Book of Business (With Scripts & Examples)

A broker book of business is simply:

A list of brokers who know you, trust you, and offer you freight consistently—even when the load board is down.

For some small carriers, four things keep them from building this:

They don’t follow up.
They don’t keep contact info organized.
They think one load = relationship.
They think brokers won’t care.

Wrong on all counts. Let’s fix it.

Step 1 — Build your Broker Master List (90 Days Look-Back)

Pull every rate confirmation from the last 90 days.

Record:

Broker name
Direct carrier rep
Direct phone
Email
Freight type
Lane/region
Notes on load

This becomes your gold mine.

When the load board drops—you’ll use this list to survive. Organize this in a Google Sheet with formatted tabs so it is easy to sort.

Step 2 — After Every “Good Load,” Send This Email

This is how you plant seeds.

Subject: Great working with you on Load ###, here’s my info

Email body:

Thanks again for the smooth load yesterday from [Pickup] to [Delivery].

If you get freight in this lane or region again, please keep me in mind.

We run:

[Regions you run]
[Equipment type]
[Preferred miles]
[Availability windows]

Here’s all my info for quick booking:

MC
Office number
Email
Preferred lanes

Good working with you again.

Let’s do more business.

— [Your Name]

This email turns a one-off into a future.

Step 3 — After a “Hiccup Load,” Send THIS Email

This is where many small carriers get it wrong.

They disappear. Or get defensive. Or blame. Don’t.

You show professionalism. Brokers love professionalism. Be accountable, as things happen.

Subject: Thanks for yesterday — here’s a recap and how we’ll prevent future delays

Email body:

I appreciate you working with us on Load ### yesterday.

We did run into an issue with [brief explanation—50% shorter than you think].

Here’s what we’ve already done to avoid repeat issues:

[Action you took]
[New communication step you’ll take]
[How you’ll handle this lane going forward]

We value the relationship.

If you get more freight in this area, please keep us on the list.

Thanks again.

— [Your Name]

This email instantly puts you in the “maturity” category with good brokers.

Step 4 — Monthly Touch-Base Message (Never Skip)

Every 30 days, send a simple note to your top 20 brokers.

“Hey [Name], just checking in. We’re running [Region] this month. If anything opens up, call me direct.”

Brokers love fast carriers. Be present. Be easy to reach. They’ll reward you for it when you need it most.

Step 5 — Become the “Go-To” Carrier in 2–3 Regions

You can’t be the favorite everywhere.

But you can be the favorite somewhere.

Pick 2–3 regions where:

You know the market
You know the backhauls
Your equipment matches the lanes
You know the dock rhythms

Then tell every broker:

“We specialize in the Midwest. If you get these lanes, send them direct before posting.”

If you think brokers won’t do that— You’re wrong. They love going direct to trusted carriers in their network.

It saves time.

Step 6 — Only Build Relationships with the Good Ones

Not every broker is worth your time.

Look for:

Clear communication
Fast rate cons
No surprise add-ons
Timely detention
Consistent loads

If a broker constantly:

lies,
ghost rates,
changes times,
nickel-and-dimes,

—they don’t belong in your book. Cut them. Fast. Simply move on.

Part 4 — The Long-Term Goal: Load Board Optional, Not Load Board Dependent

You’re not trying to “get off” the load board.

You’re trying to get to a point where:

You use the board as a backup
You don’t panic during outages
Brokers know your name
You have 5–7 consistent sources
Your truck is moving even when the digital world glitches

Load boards are tools—nothing more. They were never meant to be your entire business.

Final Thought

When the load board goes down, some small carriers panic. But the ones who are prepared? They pick up the phone, call their people, and keep rolling. This business rewards preparedness, not panic. Build your broker book. Build your pipeline. Build your identity beyond a commodity truck on a board filled with thousands.

Because when you stop being “whoever calls first” and start being “the carrier they call,”

load board outages stop being emergencies…

…and start being opportunities.

What Home Depot’s Q3-2025 Earnings May Tell Truckers About Freight in Q1

The moment Home Depot dropped its Q3-2025 earnings (along with updated guidance), it wasn’t just Wall Street that took notice. If you’re running a one-truck or five-truck fleet, you should’ve been watching too. Because what Home Depot does in its stores and warehouses eventually shows up on the load board, in your balance sheet, and on your trailers.

Here’s why: When big retailers like Home Depot, Lowe’s and Walmart buy less inventory or slow distribution-center shipments, smaller trucking companies feel it first. The freight that used to move and “fill in” two weeks ago disappears. Deadhead creeps up. Rates soften. And the really savvy carriers prep accordingly.

Let’s unpack what Home Depot’s recent results say, how that ties into the broader retail‐freight ecosystem, and what you should be doing heading into Q1.

What Home Depot’s Numbers Are Saying

In Q3 2025 Home Depot reported comparable-sales growth (comparison store to store sales/same period) that disappointed expectations. They cited a slowdown in big-ticket home improvement projects, consumer caution, and an outlook that trimmed full-year forecasts. On the investor calls, supply-chain executives flagged that store inventories are elevated relative to demand—meaning less restocking and fewer truckloads destined for those big DCs or store replenishment systems.

Home Depot’s guidance reduction isn’t just about stores. It’s about warehouse throughput, about how much the distribution network needs to haul. If they expect fewer projects (which drive product sales), they buy and ship less.

Analysts noted the stock fell partially because earnings missed and guidance was weak, but also because the margin of safety for inventory investment just got smaller. Fewer loads today can mean less demand tomorrow.

For smaller carriers, the key takeaway is this: when a major retailer says they’re scaling back inventory or cutting back restocking, the freight corridors that support them contract—especially on the outbound side of product to distribution, and the inbound side of merchandise to stores. This will hit the contract side first and then spot right afterwards as the load count declines.

Why Inventory Matters

Think of inventory like the fuel behind freight. If stores and DCs are full of product already, why ship more? If they expect sales to slow, why order ahead? The answers matter for trucks.

When Home Depot mentions elevated inventory levels, it means their warehouses and stores may reduce future orders until they clear current stock. That leads to fewer truckloads hitting the boards from vendors, fewer warehouse-to-store moves, fewer returns and reposition loads.

Lowe’s and Walmart show the same kind of signals when they report that stock turns are slower or build stops. Smaller trucking firms don’t often work direct for these giants, but you ride the ripple. Your brokers and connections who run national retail chains will feel the softening and either reduce options or rate when they still need to haul.

For example: A vendor for Home Depot who used to schedule 200 loads a month to five regional DCs may cut to 120 loads. That’s 80 fewer chances for a smaller carrier to line up into that network, maybe cutting out some opportunities that you have hauled before as well as lowering rates.

What To Expect in Q1 For Freight Demand

If we map Home Depot’s signals to the trucking calendar, here’s what to watch:

Late Q4 / Early Q1 Slowdown: Inventory echoes from Q3 typically hit in Q4 into Q1. If Home Depot is slowing down now, Q1 will feel it in load counts.
Better opportunity in service or seasonal freight: Even when big‐box retail slows, maintenance, rebuilds and servicing shipments may still run. Smaller fleets that pivot to those niches can capture freight others abandon, but only if you don’t sit on your hands. You have to get to cold calling and building relationships without tunnel vision.
Regional variation matters: Home Depot’s national numbers hide regional strength or weakness. If your region has high housing starts or natural-disaster rebuild demand, you might see a micro-lift even if national numbers are flat. So don’t assume this means for everywhere. You will still see some regions shine and they won’t fall in the same bucket as the chain-wide sentiments.
Backhaul becomes harder: If outbound shipments slow from DCs, the return leg empties out. Expect more deadhead unless you proactively book repositions. We know you may hate that word, but especially lumber for flatbedders, typically is a reliable backhaul option.
Rate pressure possible: As load count softens and competition stays high, spot market rates may lag. Small carriers that rely on lost-and-found load board freight will need to fight harder for every dime.

The good news? While Home Depot isn’t predicting a crash, their outlook signals flat to modest growth—meaning survival and efficiency will matter more than chasing big jumps.

How Small Carriers Can Shift Their Focus

Here’s how you should adjust your playbook:

Track load board wins by segment

Don’t let “any freight will do” be your habit. Start tracking what kind of loads you win, the paying lanes, the return loads. If home improvement product is your bread-and-butter and the market shows weakness, diversify now. Use the “Blue to Blue” app to be sure you are positioned!

Get serious about backhaul planning

If you pick up outbound big loads to DCs now, book your return before you leave the shipper. Don’t presume you’ll find freight on the board. We like to say, “Book a Load, From A Load”.

Cost control is the safety net

Since volume may flatten, your profit comes from how little you spend when you haul. Fuel discipline, tire management, idle reduction, choose loads where accessorials and detention are reasonable. Remember how important it is to calculate your operating ratio and breakeven points. Also remember that they are very different..

Have a plan B ready early

If Q1 starts slow, you don’t want to scramble. Have a list of alternative freight types you can pivot into—regional, equipment parts hauling, short term contracts, government contracts, etc.

A Neutral Stance—but Not a Flipped Market

Let’s be upfront: Home Depot’s earnings and the signals from Lowe’s and Walmart do not necessarily mean “boom time” for truckers in Q1. They also don’t mean “collapse.” What they mean is:

The freight world is indicative of how people are using their wallets, not explosive without demand.
The risk of steeper decline may be less than feared, but the chance of big upside is also modest.
Truckers who prepare now will win; those who assume “business as usual” may get squeezed.

So yes: Keep your eyes open.

Expected outcome for many smaller carriers: Flat to slightly improved volumes, with capacity exits, however you need demand increases to really be to our favor long term.

Final Thought

Home Depot’s big earnings day becomes a somewhat crystal ball for you—but only if you read the story behind the numbers. When they say inventory is heavy, when they say consumer spending is cautious, you should hear: Less freight ahead in certain lanes. When they say guidance is trimmed, you should hear: Rates may stagnate or fall before they rise. Lowe’s will drop their earnings tomorrow and Walmart the day after.

You didn’t get into the trucking business to chase illusions. You’re here because you haul hard, manage tight, and make margins under pressure. As you head into Q1, let Home Depot’s report be a heads-up, not a hope. Plan your realities, pick your lanes, safeguard your margin.

Because when the big retailers move slower, the trucks that move smarter survive. And when things finally lift? You’ll be ready.

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

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

A convenient time for a vacation, indeed

How a truck driver gets stopped for inspection

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

Time to start inspecting in the winter

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

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

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

The ‘everything shortage’ endures

Watch: Central Freight Lines’ impact on the LTL market

Central Freight Lines statement

Brief history of Central Freight Lines

Markets reacting to the whipsaw of tariff policy

The problem with demand

Trucking as a front in the immigration wars

The coming slide in driver numbers

Is losing drivers the catalyst toward a stronger freight market?

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