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

truck fallen over

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:

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.

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

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

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Another aspect of Montgomery: it might make human brokers more valuable

Naperville, Illinois–In a day-long conference devoted to the business of logistics mergers and acquisitions, and the markets those companies serve, a guest that wasn’t on the attendee list or the agenda showed up unexpectedly: Montgomery vs. Caribe Transport II.

That recent Supreme Court decision opening the door to greater broker liability could always be seen as having the potential to spur M&A activity in 3PLs, as smaller companies that might be faced with higher insurance premiums and other costs necessary to protect themselves in an uncertain legal atmosphere look to be folded into a bigger parent with greater resources.

But that is not how it came up in discussions at the Logisyn Advisors M&A Club conference here. Logisyn is a leading M&A advisor in logistics.

Instead, its significance was raised in a discussion by Beth Carroll, CEO of the Prosperio Group. She was on a panel focused on developing and keeping talent. .

What she said should be good news to brokers who see the possibility of AI taking their jobs, as already has been evidenced by the company earnings released by C.H. Robinson (NASDAQ: CHRW) that for several years and still ongoing have shown a steady decline in the brokerage’s head count even as its volume and profits have risen.

Carroll, whose book “Taming the Compensation Monster” on broker freight compensation was distributed to all the attendees at the Logisyn conference, described the impact of Montgomery as “another whole layer on top of everything.”

Montgomery vs. Caribe Transport II, in a unanimous Supreme Court decision in May, stripped away a key defense brokers have used to protect themselves from liability and negligence claims for many years.

Carroll said in studying AI, she had developed concern for the future of the down-in-the-trenches broker. “I thought, is there really going to be a future for the traditional carrier sales type role?” she said. “Is that something that’s going to be completely automated?”

But post-Montgomery, Carroll said her conclusion is “I don’t think so.”

Do you want to testify to this?

“You’re not going to stand up in court and say, well, how did this truck get booked that you know ended up killing people?” Carroll said, envisioning testimony in a lawsuit. The answer brokers are not going to want to give, she said, is “well, AI made the choice.”

“No, you’re going to need to have human beings that are behind that decision, and lots of controls and compliance around the rules that are being used to make that decision,” Carroll said. 

And it can extend to other areas, she added. For example, “do you want to have that same conversation in front of a jury and tell them that your carrier sales rep is on a 100% commission plan?” Carroll said. 

While Carroll did not go into detail on that observation, the inference was clear: a compensation package that is fully dependent on volume does not necessarily incentivize safe behavior. And with Montgomery now a firmly-established legal precedent, that could be a significant problem in a lawsuit. 

Volume as a pay basis going to create some issues

But while Carroll said the combination of AI and Montgomery could be viewed as more of a “pro-human” incentive at a 3PL, it can create all sorts of problems for compensation packages.

Carroll said most brokers think in terms of loads per day. “That’s a common metric that is used,” she said. 

But with AI at 3PLs raising the prospect of loads per day rising sharply for those who master its capabilities, that could create issues with compensation, Carroll said, calling it “a problem that is coming fast for them.”

“Productivity is going to increase, and on straight commission plans, that means pay is going to increase at the exact same rate, unless something is done to change it,” Carroll said.

What will be needed, she said, is an “adjustment factor,” because a company is going to need to tell its brokers on straight commission that “we’re not going to be able to pay you for your gross  margin, because now you’re actually doing 50% more with the same amount of effort.”

Carroll wondered how many brokers have had a discussion with their employees where they needed to say “Look, we’re going to have to cut your commission rate.”

“How many of you have had that conversation?” Carroll said. “It doesn’t go well, does it?”

AI not impacting CEO searches

But that’s in the rank and file. Mike Knox, senior managing partner of recruiting firm GESG who was on the panel with Carroll, said he has yet to have an executive search where AI knowledge and experience has been part of the process. 

But Knox followed that up with a comparison of traditional pay packages for 3PL leaders that implicitly acknowledges the importance of technology. 

For companies awarding equity, a standard structure might have been a five-year or three-year vesting for that equity, Knox said. But now, he added, “if you’re not performing in 18 months, there’s pressure with what your competitors are doing, all driven by technology.”

Sarah Barnes-Humphrey, the owner of Let’s Talk Supply Chain, who moderated the panel, expressed concern about where the next generation of C-suite executives is going to come from if AI does reduce the number of so many lower-level employees.

“What does that mean for leadership in the future when we don’t really have the critical thinking skills that we develop from having that experience, and how do we have a human in the loop that doesn’t have the knowledge and experience that we get from an entry-level job?” Barnes-Humphrey said.

Has it been a good year for M&A?

There are similarities between the Logisyn conference and the Benesch law firm conference on private equity in logistics held in New York each December. Many of the topics overlap.

At the end of 2025 at the Benesch conference, a banner year for logistics M&A in 2026 was predicted by among others, Ron Lentz, the managing director at Logisyn. 

So how’s it going?

Logisyn each month publishes a report on the prior month’s total of logistics deals from around the world. It had not been showing a significant upturn in the number of deals done until recent months.

A shift in methodology led the August numbers to soar. Logisyn and transportation research firm Ti-Insight said they had adopted “an improved tracking system that will provide a more comprehensive logistics M&A transaction database month over month.”

The data from the new methodology showed August deals around the world at more than double what has been reported in recent months, though with a new methodology the comparison is not apples to apples.

But in its report for August, Logisyn said the market was strong. “Rapid investment across data centers, energy, renewables and infrastructure is creating a new growth cycle for project logistics and specialized transportation,” the report said. “These capital-intensive industries require moving increasingly large, heavy, and complex components, driving demand for heavy-haul transportation, specialized lifting equipment, project forwarding, and engineering expertise.”

In other highlights from the Logisyn M&A Club conference:

  • A deal was actually announced from the stage. As the first session was wrapping up, Kendra Tanner, president and CEO of AllStates World Cargo, announced the company was being acquired by Eve Partners. And to confirm the deal, J.J. Schickel, a partner at Eve, was sitting next to Tanner when the announcement was made.
  • Cameron Roberts, managing partner of Roberts & Kehagiaras LLP, on a panel entitled “Resilience in the face of global geopolitical crises,” offered perspective on dealing with U.S. Customs and Border Protection (CBP). The resources that CBP is bringing to its enforcement efforts is “at an all-time high,” Roberts said. At a recent trade summit, Roberts said, officials from CBP told the audience that its message is “prove to me that you’re a good broker. Prove to me that you’re a good importer.” Roberts added that the “concept of facilitation,” where the CPB would mostly look to ease the path of an importer, has disappeared.”The concept is enforcement and the presumption of people doing things the wrong way,” he said.

Why it’s important: AI appears to be a force for job destruction in 3PLs. But at a leading conference, the value of humans in the new fight over broker liability was touted by a speaker. It was seen as helping a broker’s defense in litigation after a crash or other incident.

More articles by John Kingston

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Borderlands Mexico: Tesla plans massive Texas distribution center 

Borderlands Mexico is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week in Borderlands Mexico: Tesla plans massive distribution center near Austin and Danfoss launches new production line in Mexico for North American market.

Tesla plans massive Texas distribution center 

Tesla is planning a more than 538,000-square-foot distribution center near Austin, Texas, adding another logistics facility to the electric vehicle maker’s growing manufacturing and supply chain footprint in the region.

The Austin-based automaker is planning a lease-space build-out at the Mustang Ridge Distribution Center I, located at 6925 FM Road 1327 in Mustang Ridge, according to a filing with the Texas Department of Licensing and Regulation.

The project covers 538,720 square feet and carries an estimated construction cost of $1.44 million. Work is scheduled to begin Dec. 7 and be completed Dec. 4, 2028, according to the state filing.

The filing describes the project as a “new lease space build-out for Tesla in the existing Office/WHSE building.” The privately funded project was registered with the state Sept. 1.

The filing does not specify what products or materials Tesla will handle at the distribution center or how many employees will work there.

The project represents another expansion of Tesla’s operations in Central Texas, where the company has established Austin as its corporate headquarters and operates its massive Gigafactory Texas manufacturing complex.

Tesla’s (Nasdaq: TSLA) growing logistics footprint comes as the company ramps production and invests heavily in manufacturing capacity. Tesla reported second-quarter revenue of $28.24 billion, a 26% increase from a year earlier, while delivering a record 480,126 vehicles worldwide during the quarter.

Tesla said capital expenditures more than doubled sequentially to $5.8 billion during the quarter, with management expecting spending to exceed $25 billion this year as the company expands manufacturing capacity. 

Executives have also said battery availability and electronic components remain constraints on increasing vehicle production.

The company is also preparing to ramp production of its Class 8 Tesla Semi at its Nevada manufacturing facility. Tesla said in July that the Semi factory remained on schedule, with production expected to begin later this year.

The Mustang Ridge distribution project could also strengthen Tesla’s position along the Texas-Mexico automotive corridor, although the state filing does not identify the facility’s suppliers, customers or freight lanes.

Tesla already draws components from an extensive supplier network in Mexico. Tecma has reported that Tesla suppliers operate in Nuevo León, Coahuila, Tamaulipas, Chihuahua, the Bajío region and the state of Mexico, shipping automotive components north to Tesla’s Texas factory.

That supplier network gives the Austin region an important role not only in Tesla’s manufacturing operation but also in the cross-border movement of automotive parts and components between Mexico and Texas.

The new distribution center is scheduled for completion in December 2028.

Danfoss launches new production line in Mexico for North American market

Danfoss Climate Solutions has launched a new production line at its manufacturing complex in Apodaca, Nuevo León.

The Danish company is expanding production in Mexico to serve growing demand from North American data centers, according to Milenio and Mexico Industry.

The new line produces oil-free check and block valves used with Danfoss Turbocor centrifugal compressors in chillers and heat pumps. 

Danfoss said the expansion is aimed at shortening delivery times and strengthening supply chains for customers in the U.S. The company did not disclose the investment associated with the new production line.

The Apodaca operation will manufacture 12 valve models for North American original equipment manufacturers.

While initial production is delivered to customers operating in Mexico, about 80% of the finished products are ultimately exported to international markets, primarily the U.S., after being incorporated into chillers and commercial air-conditioning systems.

Danfoss has also doubled the physical footprint of its Apodaca complex over the past two years, increasing it from about 366,000 square feet to 721,000 square feet, in 2026.

Employment at the facility increased from 800 to 1,300 workers over the same period.

Danfoss said approximately 90% of the products manufactured at the Apodaca plant already comply with requirements under the United States-Mexico-Canada Agreement.

Denmark-based Danfoss has 100 factories worldwide (including 11 in the U.S. and siz in Mexico). The company has a global workforce of around 42,000.

Why it matters: Tesla’s new distribution center will add significant distribution capacity near its Austin manufacturing operations and the cross-border supply chains connecting its Texas production footprint with automotive suppliers in Mexico.

Fuel cost spike hits carrier margins

Chart of the Week: Daily Retail Diesel Price, Wholesale Diesel Price, Retail-Wholesale Fuel Spread – USA  SONAR: DTS.USA, ULSDR.USA, FUELS.USA

Last week, J.B. Hunt issued a rare warning of a 5% to 10% earnings headwind in the third quarter, driven by rising fuel and driver costs. Retail diesel prices (DTS) rose roughly 31% from July 5 to September 17, while wholesale prices (ULSDR) climbed at more than twice that pace, narrowing the retail-wholesale spread by about 48% over the same period. When that spread shrinks, larger carriers that buy fuel at wholesale levels take the hit — though they typically make it back when fuel prices decline. The market punished J.B. Hunt for what looks like giveback in Q3 from a potentially bloated Q2, not necessarily a long-term threat.

The first thing to understand is how fuel spikes affect larger fleets. Many large fleets have the scale to negotiate fuel purchases at a discount to the retail price. Most of these “discounts,” though, are actually premiums to the wholesale — commonly called “rack” — price: something like rack plus 2%. So when the rack price is $3.89, the rate the carrier pays is $3.97.

Most carriers pass some portion of fuel costs to customers through a fuel surcharge, to avoid getting caught out when diesel prices swing sharply. Because most fuel surcharges are based on the retail price, this leaves the carrier some buffer to work with when fuel costs fluctuate.

This buffer varies with how competitive the pricing environment is and how stable fuel costs have been. When the market is competitive and fuel is stable, carriers tend to lower their base rates, exposing themselves to more fuel price volatility. When the market is tight, they can raise base rates, reducing their long-run exposure to fuel price swings.

This is the core problem J.B. Hunt is running into in its dedicated and intermodal businesses. These rates are negotiated over a much longer term and don’t get renegotiated intra-cycle. Most of these contracts were set before the recent market flip, which occurred in late 2025 and early 2026.

Because those rates were priced competitively to win business in a tight-margin market, J.B. Hunt carries more exposure to swings in operating-cost inflation. The fuel spread (FUELS) between retail and wholesale diesel is a good data point that illustrates this.

Wholesale diesel prices, as with most commodities, are far more volatile than their retail counterparts, as the chart above shows. Retailers buy in bulk and can hold prices steadier over time, whereas wholesale is more of a free market that’s negotiated daily.

In an inflationary market, wholesale diesel costs rise faster than retail prices. That means carriers are buying fuel at a higher cost than what their fuel surcharge — based on the slower-moving retail figure — has caught up to yet. This shows up as a lower fuel spread, which has averaged just above $1 per gallon since early July. Compare that to the roughly $1.25 average spread from 2022 through March of this year, and you can see the margin erosion if fuel surcharge tables and base rates held steady.

The spread from April to July averaged above $1.50 per gallon, meaning carriers largely benefited. So while the market may have overly celebrated J.B. Hunt in Q2, there’s some giveback in Q3 — but over the long run, it’s relatively meaningless.

What about smaller fleets?

Small fleets that don’t buy fuel at wholesale prices face a different problem: rising retail prices are hard to pass through on the spot market, especially in a competitive environment. Today’s market isn’t quite that competitive, but it still isn’t allowing much further rate inflation, as the chart below illustrates. As with any commodity, the end consumer will only absorb added cost if they have no other option. 

The retail diesel price (yellow) — what many smaller fleets without purchasing power pay — is up roughly 24% over the past three months, while spot rates are down about 6%. That’s not necessarily a sign of losing money, but it does suggest margin erosion.

The hard part for small carriers is that there’s no guarantee they’ll recoup that margin loss later — it’s entirely market-dependent.

About the Chart of the Week

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

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

The FreightWaves data science and product teams are releasing new datasets each week and enhancing the client experience.

To request a SONAR demo, click here.

Fake FedEx drivers steal $680K electronics load from New Castle, DE, warehouse

Delaware State Police arrested a California man after a $680,000 electronics shipment disappeared from a New Castle, DE, warehouse. Troopers recovered the trailer at a Newark, DE, parking area with every item inside. Investigators connected the scheme to fraudulent identification, shipping records and a false registration plate. The case began with a pickup near Wilmington, DE.

Police took Dushatdaman Parihar, 35, of Manteca, CA, into custody Sept. 15. Troopers encountered him near the parked tractor-trailer at University Plaza. Authorities transported him to Troop 2 following the contact. A Justice of the Peace Court arraigned him and set a $66,550 secured bond.

Documents cleared the pickup

Two suspects arrived at a River Road business in New Castle at 9:15 a.m. Sept. 14. They used a tractor-trailer cab and identified themselves as FedEx employees. The pair showed driver’s licenses and documents for electronics valued above $680,000. They attached the cargo trailer to their cab and left.

The business later learned the paperwork was fraudulent. Its caller located the equipment at University Plaza in Newark and called 911. While officers spoke with the caller, Parihar walked toward the tractor-trailer. They found false credentials and a fraudulent plate.

Charges follow recovery

Delaware State Police charged Parihar with felony theft involving property valued at $100,000 or more. He also faces first-degree forgery, second-degree forgery and second-degree conspiracy charges. Authorities added one count for a fictitious registration plate. Investigators returned the trailer and goods to the business.

Detectives with the Criminal Investigations Unit continue to investigate the case. The official announcement names a second participant but gives no identity. The Delaware State Police Public Information Office told FreightWaves it has no additional details to release. Detective S. Marioni accepts information at 302-365-8388.

Why it matters

Cargo thieves can exploit routine pickup procedures, identification checks and shipment documentation. Transportation professionals need controls that verify drivers, equipment and dispatch records before releasing high-value freight.

Click here for more articles on cargo theft and freight fraud by Phil Brink.

Truck driver accused of trading $110K chicken load to pay drug debt – FreightWaves

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FleetCor, CEO Agree to Pay $100 Million Over Hidden Fuel-Card Fees – FreightWaves

YardFlow lands over 200-site yard automation deal

A busy truck yard with terminal tractors and trailers in parking spots Primary focus keyword: yard automation

The most challenging areas in freight are not the highways but the yards and docks across multitudes of shippers and receivers. The battle against utilization entropy is fought on the loading and unloading docks. It mostly happens inside a warehouse fence line, where a driver sits in a line of 10 trucks waiting to talk to one person behind a pane of glass.

YardFlow is expanding its yard automation software to all 200+ facilities of a beverage giant after a 26-site deployment. The shipper moved nearly 5% more freight with the same headcount according to a YardFlow analysis.

“That’s tens of millions of dollars of incremental profit,” Jake Koppinger, founder of YardFlow, told FreightWaves.

The customer is expanding the rollout from its largest facilities down to its smallest. “They’re pushing us into all of their 200+ facilities, including their smallest, so biggest to smallest, because they want to see that standardization,” Koppinger said.

YardFlow has processed close to 2 million shipments across the 26 sites. The system runs at three-nines or 99.9% uptime.

The Box in the Back of the Warehouse

The problem YardFlow originally tackled began with paper. Specifically, the bill of lading handoff that still runs through a printer, a stapler and a slot in a window at thousands of U.S. distribution centers.

Koppinger walked through the analog process with a hypothetical example. A dock coordinator prints three copies, collates them, passes them through the glass, takes back a signature, then files the shipper’s copy.

“They build up this big pile of paper, rubber band it, put a date on it, and put the pile in the box,” he said. Once the box fills, it goes into storage for seven years to satisfy the statute of limitations.

That box becomes a cash problem roughly 60 days later. If a shipper invoices a retailer for 24 pallets and the retailer says it received 23, the dispute surfaces inside a lump-sum payment.

“You have like 50 invoices that get paid at once and it comes back in a lump sum of like $1.2 million. Well, I was expecting through those invoices $1.3 million. Now I’ve got to figure out why a hundred thousand’s missing,” Koppinger said. “So now there’s a cash attribution issue.”

Resolving it sends a dock coordinator into the warehouse to find the right box and dig out a two-month-old signature. That coordinator is the same person orchestrating forklift drivers, assigning yard spotters, dealing with truck drivers and replacing printer ink.

“What I like to equate that process to is like the old airport check-in process,” Koppinger said. Drivers waiting in that line are accruing detention and risking on-time, in-full penalties on the delivery ahead.

Why Yard Automation Starts With the Driver, Not the Robot

YardFlow’s core product is what Koppinger calls the driver journey: a digitized path from gate check-in through dock assignment to check-out and signed documentation. The system has processed close to 2 million shipments and runs at 99.9% uptime. Drivers need no app download, and QR code check-in is optional.

It’s a design choice that reflects a constraint Koppinger calls non-negotiable. “If you have any issues where truck drivers are asked to download an app to get a digital bill of lading or something, they don’t have it and then they’re stuck there trying to download this app, they don’t have connectivity,” he said. “That causes problems with your operations.”

The harder obstacle remains organizational. Warehouses run on tribal knowledge, and each one has its own unique operational peculiarities.

“You have people that have worked there for 20, 30 years and they’re the ones that keep the lights on,” Koppinger said. “Each warehouse can tend to operate its own silo because they’re big operations.” A single facility at a large retailer or consumer packaged goods company can generate hundreds of millions in revenue, which buys it the autonomy to do things its own way.

That level of autonomy makes reporting challenging. Facilities held to the same KPIs collect the data differently, leaving executives comparing the warehouse equivalent of apples to oranges.

Koppinger’s counterargument is that every yard shares a few common denominators. Drivers arrive, check in, go somewhere, sign something and leave. “There’s one common theme, one lowest common denominator that exists from an operational perspective that is sort of the heartbeat for how they ship products and generate revenue,” he said.

An Eye in the Sky Over the Yard

With the driver journey deployed, the customer asked for a yard management system. YardFlow built one and is now deploying it, extending the same standardization to yard spotters, jockeys and trailer inventory.

The newer layer leverages machine vision, mounted at the gate and on the spotters themselves.

“If I tell a yard spotter to go take something from dock three and put it in spot four, the system has to trust that that’s what they did,” Koppinger said. “But if you can have an eye in the sky to actually validate the fact that they took it from dock three and put it in spot four, now we have something to cross-check that.”

Cameras on moving spotters build what Koppinger describes as a digital twin of the yard. Gate cameras read arriving and departing trucks and trailers, validating carrier identity against DOT and MC numbers. That has direct implications for cargo theft and identity fraud, both of which have pushed shippers toward tighter gate controls.

The Steak Before the Sizzle

Koppinger’s pitch to shippers is deliberately unglamorous. He notes that is the point.

“There’s a lot of AI pilot fatigue. You pilot something, it never goes anywhere. It’s hard to scale,” he said. Digital documentation and check-in workflows are “what I call sort of the steak relative to the sizzle.”

He calls the sequencing an order of operations. “Let’s get the operations fixed. Let’s standardize your processes and protocols across your yards. Let’s get everything digitized so that you can then be in a position to start layering in these other layers of automation,” he said, rather than dropping an autonomous yard jockey into a facility where drivers still check in on clipboards.

Deployment speed reinforces the order. The driver journey and the yard management system go live in 30 minutes remotely. Machine vision requires on-site hardware installation and can take longer.

“We’ve seen companies take on yard modernization projects that take years to optimize one facility and then they struggle to get the next one on and scale across the pilot network, because there’s a gap between theory and operational reality or just require too much change management at once,” Koppinger said.

The endgame is a yard that can dispatch machines as easily as people, and Koppinger says the paperwork problem is what stands in the way.

“You’re not going to be handing paperwork to an autonomous truck, right? You’ve got to be able to orchestrate an autonomous truck in through the gate, through the yard, tell them where to go in whatever the language that autonomous truck speaks,” he said. “You’ve got to deal with both human spotters and autonomous spotters probably for the next 15 years. And so our system is kind of the brain that sits in the middle and orchestrates all of these different things to facilitate that autonomous yard.”

Truck driver accused of trading $110K chicken load to pay drug debt

A Memphis police affidavit says truck driver Robert Wilson offered a $110,000 chicken shipment to settle a drug debt. Officers interrupted the reported exchange behind an Economy Inn on Sept. 15. Several people unloaded frozen cargo from his semi-trailer nearby. The discovery led to 12 arrests, three recovered firearms and multiple drug charges.

Wilson operated as an independent contractor under Armada Freight’s authority, the company told FreightWaves. Armada assigned him to transport the Koch Foods shipment. Wilson told police he owed a drug debt to an orange-shirted man driving a blue SUV. The complaint states he was “trading his load to pay off a drug debt.”

Unrelated warrant reveals cargo exchange

Memphis Police Department’s Fugitive Unit reached 3896 Lamar Avenue around 9 a.m. Officers sought Javunte Johnson on an aggravated robbery warrant unrelated to the shipment. Detectives saw several people moving boxes from a white semi-trailer into multiple vehicles. Several participants fled after noticing law enforcement, according to court records.

Officer Smith saw Johnson move from the blue SUV toward a maroon Cadillac, according to his affidavit. Johnson crouched behind a rear tire before attempting to flee. Investigators detained him and found a Glock 42 beside that vehicle. The filing identifies Johnson as orange-shirted but never explicitly calls him Wilson’s creditor.

Detectives found Wilson inside the truck and arrested him. Armada confirmed that he lacked permission to distribute any merchandise. The shipment originated in Morton, Mississippi, and should have reached Swedesboro, New Jersey. Koch Foods valued the chicken at $110,000.

Chicken, guns and drugs found in three vehicles

Quantrivious Shavers ran toward the blue SUV before throwing a handgun and marijuana inside, according to his complaint. Detectives later found two pills inside a folded dollar bill in his pocket. A handwritten correction identifies fentanyl through a presumptive reagent test. Police also found 30 cases of assorted frozen chicken inside that vehicle.

Marcellous McKinney attempted to leave the parking lot in a 2009 Nissan Armada, his affidavit states. Detectives activated their lights and sirens, but McKinney continued through the property. Officers stopped him and found 50 boxes of frozen chicken inside. Investigators reported that those packages matched merchandise removed from Wilson’s trailer.

Another affidavit links Robert Dishmon to a 2009 Cadillac DTS. Dishmon told investigators that the vehicle belonged to him. A subsequent search produced 41 boxes matching the same shipment. Across three vehicles, court records describe 121 recovered boxes or cases.

Armada owned the tractor and trailer involved in the shipment. Police alerted the company after discovering its equipment at the Memphis hotel. Armada immediately terminated Wilson’s contracting relationship after learning about the incident. The company later recovered its equipment and disposed of the remaining cargo.

Armada filed a claim and contacted the shipment’s broker and its insurance provider. The carrier uses GPS and electronic logging devices to monitor equipment and driver activity. “Armada Freight Inc. takes the allegations surrounding this incident very seriously,” the company told FreightWaves. It pledged to cooperate with law enforcement and other investigators upon request.

Armada stated that the reported conduct violated its policies and shipment instructions. The company declined to speculate further while criminal charges remain pending. Koch Foods did not respond to FreightWaves’ request for comment before publication.

Charges announced against 12 people

Memphis police announced charges against 12 people following the Sept. 15 investigation at 3896 Lamar Avenue. All charges remain accusations. (Photo: Memphis Police Department)

MPD identified 12 defendants following the discovery at the Memphis hotel. Ten received felony charges involving property valued between $60,000 and $250,000. Several also face firearm, drug or evasion accusations. The department announced the following charges:

  • Javunte Johnson: Aggravated robbery, theft between $60,000 and $250,000, and convicted felon possessing a handgun.
  • Robert Wilson: Theft between $60,000 and $250,000, plus evading arrest in a vehicle.
  • Quantrivious Shavers: High-value theft, convicted felon possessing a handgun, and fentanyl possession with intent to sell.
  • Samuel Jackson: High-value theft and cocaine possession with intent to sell.
  • John Shipp: Theft of property valued between $60,000 and $250,000.
  • Rico Jackson: Theft of property valued between $60,000 and $250,000.
  • Devean Hoyle: Theft of property valued between $60,000 and $250,000.
  • Trashawn Featherson: Theft of property valued between $60,000 and $250,000.
  • Robert Dishmon: Theft of property valued between $60,000 and $250,000.
  • Marcellous McKinney: High-value theft and evading arrest in a vehicle.
  • Jessie Moore: Convicted felon possessing a handgun and evading officers on foot.
  • Alexis Pike: Evading officers on foot and two theft counts involving property worth less than $1,000.

Courts presume every defendant innocent unless prosecutors prove guilt. MPD counted Johnson among the 12 people named in its announcement. The U.S. Marshals Service described Johnson alongside 12 others, indicating 13 arrests. Neither agency has identified the additional person reflected in that federal total.

The Marshals Service valued the chicken at $250,000. MPD instead reported recovering approximately $110,000 in stolen merchandise. The Memphis Police Department later confirmed to FreightWaves that the entire shipment carried a $110,000 value. Koch Foods and Armada Freight did not respond to FreightWaves’ requests for comment before publication.

Why it matters

Motor carriers face substantial exposure when trusted drivers divert legitimate loads without a roadside hijacking. This case highlights the importance of insider controls, route monitoring and rapid exception reporting throughout cold-chain operations.

Click here for more articles on cargo theft and freight fraud by Phil Brink.

FleetCor, CEO Agree to Pay $100 Million Over Hidden Fuel-Card Fees – FreightWaves

Trucker flees after Nebraska troopers find $250K in stolen speakers – FreightWaves

Nebraska troopers seize record $50M drug load from semi on Interstate 80 – FreightWaves

Burglary hits moving BNSF train as container catches fire in Riverside

A BNSF train carrying mixed freight caught fire during a burglary in Riverside, California, Thursday morning. The train was traveling from Los Angeles to Chicago, BNSF told FreightWaves. Firefighters found an open upper container burning on the moving double-stack train. Officials have not identified the items inside or reported any stolen cargo.

Riverside dispatchers received the first report at 4:40 a.m. near Chicago Avenue. Early information placed the train heading west from downtown. Crews later located it moving east between Spruce and Columbia streets. Riverside Fire Department deployed 19 firefighters, four engines, one truck and a chief officer.

Crews move train for access

Access problems prevented crews from reaching the flames at their first location. Incident commanders directed railroad personnel to reposition the equipment farther east. Once crews gained access, firefighters extinguished the blaze and recorded control at 5:30 a.m. The department identified the event as incident RIV #26-34784.

BNSF told FreightWaves that Colton Fire Department also responded to the incident. Firefighters later returned the railcar to a BNSF representative and company police. Railroad investigators took charge of removal and examination. Officials reported no deaths, injuries, evacuations or displaced residents.

Investigation continues

BNSF Police now lead the investigation into the burglary and fire. The railroad did not identify suspects, arrests, vehicles, losses or service disruptions. It also did not explain how the burglary unfolded or whether suspects caused the fire. “These are not victimless crimes,” BNSF told FreightWaves.

Freight can include medicine, food and other critical supplies, the company noted. BNSF described its network security protocols as robust. Company officials also cited coordination with federal, state, local and tribal law enforcement. Investigators have not announced when they expect to complete the case.

Why it matters

Cargo theft can interrupt freight movements while complicating loss assessments and customer communication. Confirmed facts help supply chain professionals manage risk without overstating an ongoing investigation.

Click here for more articles on cargo theft and freight fraud by Phil Brink.

FleetCor, CEO Agree to Pay $100 Million Over Hidden Fuel-Card Fees – FreightWaves

Trucker flees after Nebraska troopers find $250K in stolen speakers – FreightWaves

Nebraska troopers seize record $50M drug load from semi on Interstate 80 – FreightWaves

Federal probe into diversion of F-35 parts to Hong Kong

U.S. lawmakers and the Pentagon are investigating the diversion of a shipment of unserviceable F-35 Lightning II fighter jet components from Australia to Hong Kong, an incident that has raised concerns about potential exposure of sensitive U.S. stealth-aircraft technology.

The shipment was intended to travel from Australia to the United States for repair but was rerouted while crossing the Pacific, Politico reported Friday, citing three people familiar with the matter. The components were being transported by an intermediary for F-35 prime contractor Lockheed Martin, but it remains unclear why the shipment was diverted, whether it was a mistake or an unauthorized act, and who now possesses the parts.

The mode of shipment was not immediately identified.

Fighter parts are typically shipped as controlled aerospace cargo, often by military or contracted commercial airlift for urgent items, and by truck, sea freight or a combination of modes for less time-sensitive components. F-35 supply movements, for example, have used both military airlift and commercial carriers under U.S. Transportation Command arrangements, according to the Defense Logistics Agency.

The Pentagon’s F-35 Joint Program Office confirmed that it was aware of what it characterized as “a shipment issue of unserviceable F-35 Lightning II components.” The office said it is working with U.S. authorities and industry partners to recover the components, investigate the incident and establish safeguards against another occurrence.

Canopy raises stakes

Among the diverted equipment was reportedly an F-35 canopy, the cockpit enclosure that incorporates technology associated with the aircraft’s low-observable design. That detail elevates the security implications beyond a routine loss of repairable spares, because adversaries could potentially examine physical components for clues to the F-35’s stealth characteristics and manufacturing methods.

Hong Kong’s status as a Chinese special administrative region has amplified congressional concern that Beijing could gain access to the equipment. There is no public indication that Chinese authorities or the Chinese military have obtained the parts, and the current location and custody of the shipment were not known Friday.

State Department and Pentagon officials began briefing congressional staff working on key national-security committees in June, according to Politico, with additional briefings expected in coming weeks. The incident was not previously public.

Supply-chain controls in focus

The apparent breakdown is likely to renew scrutiny of the F-35 program’s global sustainment and repair network. The fighter is operated by the United States and numerous allied customers, making the movement of repairable components across borders a routine part of fleet support. But the program’s reliance on outside logistics providers and multinational maintenance flows also creates a demanding chain-of-custody challenge for hardware tied to highly classified aircraft capabilities.

The issue comes against the backdrop of earlier criticism of the Pentagon’s F-35 spare-parts inventory controls. A 2023 Government Accountability Office review found that the Defense Department had not established sufficient accountable-property records to track real-time changes in F-35 spare-parts inventory. GAO said the program had reported more than 1 million parts missing over the preceding five years. The watchdog also said the department could not review losses valued in the tens of millions of dollars because Lockheed Martin controlled relevant data.

The disclosure also arrives as Washington weighs additional international F-35 business. The State Department this week approved a potential $24.3 billion sale of 48 F-35 aircraft, dozens of Pratt & Whitney engines, spare parts and support equipment to Saudi Arabia, subject to congressional approval.

Read more articles by Stuart Chirls here.

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Container shipping fuel prices remain elevated as supply fears ease

OXEA taps Uber Freight to manage North American, European logistics

DHL acquires freight forwarder in Uruguay 

FleetCor, CEO agree to pay $100 million over hidden fuel-card fees

FleetCor and CEO Ronald Clarke agreed to a $100 million payment resolving Federal Trade Commission litigation. The settlement follows years of court action over hidden charges involving commercial fuel cards. Harm reached tens of thousands among small-business customers seeking lower operating costs. Regulators say promised savings disappeared beneath undisclosed billing practices.

Federal regulators accused FleetCor, which now operates as Corpay, of imposing unauthorized fees totaling hundreds of millions. Investigators found improper late penalties despite timely remittance or company barriers that prevented payment. Officials cited misleading claims about gas savings, fraud controls, plus card-related expenses. Those practices harmed operators across the United States, according to a 2019 complaint.

Hidden Fees Emerged Later

Regulators found FleetCor often waited several billing cycles before adding many charges. Delayed timing made extra costs harder for customers to notice. Invoices omitted fee disclosures, pushing account holders toward separate management reports. Even those documents obscured some amounts among unrelated details or excluded them entirely.

“FleetCor deceived its small business customers by promising fuel savings that never materialized,” Christopher Mufarrige said. He directs FTC’s Bureau of Consumer Protection. Agency officials also criticized hidden and unauthorized charges. Settlement terms channel restitution toward harmed account holders.

In 2023, one federal district court granted summary judgment to the FTC on every count. Its ruling found hidden charges and false representations involving savings, fees, plus fraud-control features. Permanent injunction terms barred FleetCor from billing without informed consent alongside clear disclosures. That order also prohibited deceptive fuel-card claims or hiding material information behind hyperlinks.

Court Decisions Set the Terms

During 2026, a federal appeals court upheld every judgment against FleetCor and affirmed its permanent injunction. Judges sustained all but one count involving Clarke. The panel vacated restrictions concerning him. Under proposed settlement terms, both respondents agreed not to oppose renewed limits covering that executive.

Consent provisions require FleetCor and Clarke to provide $100 million for business customer redress. FTC commissioners accepted this package by a 1-0-1 vote. Chairman Andrew N. Ferguson recused himself. Officials plan Federal Register publication before opening a 30-day public comment period.

After comments close, commissioners will decide whether to finalize the order. Agency officials have not announced individual eligibility requirements, payment amounts, or distribution dates. Future violations could trigger civil penalties reaching $53,088 each. Customers awaiting restitution details should watch official FTC updates.

Why It Matters

Fuel-card fees directly affect carrier margins, cash flow, and trust in essential payment tools. This case offers transportation professionals lessons for invoice reviews, vendor oversight, plus contract controls.

Click here for more articles on cargo theft and freight fraud by Phil Brink.

Trucker flees after Nebraska troopers find $250K in stolen speakers – FreightWaves

Nebraska troopers seize record $50M drug load from semi on Interstate 80 – FreightWaves

Police recovered $586K stolen copper load within 8 hours after suspected carrier impersonation – FreightWaves

Costco expands ultra-fast delivery through DoorDash, Uber

Close up view of a Costco Wholesale logo on the side of a warehouse store.

Costco is expanding its same-day delivery network as it looks to grow e-commerce sales and compete with retailers like Walmart and Target.

The retailer this week launched collaborations with DoorDash (NASDAQ: DASH) and Uber (NYSE: UBER) to pick up online orders at U.S. stores and drive them to the customer’s door. The arrangements give Costco more channels to reach customers through ultra-fast delivery, made possible by gig drivers who use the platforms to select assignments.

DoorDash, best known for delivering restaurant food, announced that Costco (NASDAQ: COST) members can now order groceries, dry goods, household essentials and other products from its marketplace and then arrange fast delivery from their local store, all through the DoorDash app. The U.S. launch extends the existing relationship between the companies in Australia, New Zealand, Sweden, Iceland and Puerto Rico.

DoorDash now serves eight of the 10 largest food retailers in North America.

On Wednesday, Uber announced a major expansion of its partnership with Costco to deliver products in 47 states, up from 17 states. Nearly 600 Costco locations are now available on the Uber Eats app, where shoppers can arrange on-demand and scheduled delivery. 

Costco is also available on Uber Eats in Canada, Mexico, Japan, Taiwan, France, and Spain. 

“Costco bringing Uber Eats and DoorDash nationwide is just good business. Costco isn’t buying trucks or paying drivers to haul toilet paper across town. They’re letting delivery platforms do all the work and take on the hassle. Meanwhile, Costco keeps its main revenue stream untouched — you still have to pay for a membership to place an order,” said Dominick Miserandino, CEO of RTMNexus.com, a community for retail executives to share best practices on industry issues, in an email exchange. 

“For years, Instacart was the only real game in town for them. By bringing in Uber and DoorDash, Costco forces all three of them to fight over fees and speed. It keeps members happy, drives extra sales, and Costco doesn’t have to spend a dime running a delivery network,” he added.

Earlier this month, DoorDash began providing on-demand delivery for Skims from 17 stories across 11 states and Washington, D.C., with nine additional stores coming soon to the platform. Skims sells undergarments, loungewear and everyday clothing. DoorDash says customers, on average, can expect delivery in less than an hour. The Gap and Gap Factory joined the DoorDash marketplace.

DoorDash has continued to expand its retail delivery offering since entering the category in 2022, with tens of thousands of stores now available across a wide range of merchandise. During the summer, DoorDash linked with Shopify so independent merchants with storefronts can add their product catalog to the DoorDash marketplace and offer ultra-fast delivery. 

The expansion of food and grocery delivery platforms into retail delivery underscores the rapid evolution of the parcel delivery market, with scores of independent and regional couriers rushing to build out national networks in response to e-commerce growth and shippers’ interest in lower-cost alternatives to FedEx, UPS and the U.S. Postal Service.

Online sales now represent 16.5% of total retail sales and the segment is growing at about 10% per year, according to the U.S. Census Bureau. 

Alternative carriers now make up about 8.5% of the parcel freight market, up from handling 2.6% of parcel volume in 2021, according to The Colography Group.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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