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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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Project44 expands real-time visibility into China

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

‘Project44’s vision has always been global’

They’re Selling You a Feeling – What the Trucking Industry’s Marketing Machine Doesn’t Want You to Know

Small carriers and owner operators are not just fighting market conditions. They’re fighting the messaging. Every week, from the moment a DOT number gets applied for to the day a carrier tries to scale beyond their first truck, there is a constant stream of outreach, advertising, promises, and pitches flooding in from every direction. Fuel cards, load boards, dispatch services, factoring companies, compliance tools, insurance products – the list is as long as the road itself. And most of that messaging was not built with the small carrier’s success in mind.

John Landrum has spent nearly a decade inside that messaging machine. He joined OTR Capital in 2017 as an inside sales rep, spending his first two years in direct daily conversations with carriers before building the company’s entire marketing function from the ground up and eventually growing into his current role as Vice President of Marketing. He has watched the industry shift through COVID boom, freight recession, regulatory disruption, and everything in between – and he has seen what the messaging got right, what it got wrong, and what it has been doing to small carriers who didn’t know enough yet to protect themselves from it.

This is a conversation about influence, illusion, and what it actually takes to make clear-headed business decisions in an industry that profits when you don’t.

The Moment You’re Most Vulnerable Is the Moment They Come Hardest

The most dangerous window for a new carrier is not the first difficult month of operation. It is the first 48 hours after a DOT number gets applied for.

Landrum is direct about it: the day that number goes into the system, the outreach begins. Companies across the industry – factoring companies, fuel card providers, compliance services, load boards – are all monitoring new authority applications as a lead source. There is nothing inherently wrong with that. It is standard practice and Landrum acknowledges that OTR does it too. But the cumulative effect of every company in the industry contacting a new carrier simultaneously creates a psychological environment that feels urgent even when it isn’t.

“You start getting bombarded with all these communications, it can make you feel like you need to make a decision right then,” Landrum said. “Nobody’s really meaning to give that feeling. But if you get a whole bunch of text messages from somebody, you assume that it’s urgent and that you need to take action and do something, or they wouldn’t be communicating with you as much as they are.”

The problem is that most of the decisions carriers feel pressured to make in those first few days are not actually time-sensitive. Factoring relationships, fuel card programs, and load board subscriptions are long-term commitments designed to work alongside a business over time. A carrier who selects a factoring company under pressure at day one – before they have run a single load, before they understand how their cash flow actually works, before they know what they need from a financial partner – may be locking themselves into terms that don’t serve them well for months or years.

“A lot of these things are not short-term decisions,” Landrum said. “They’re long-term decisions that are designed to work with your business and grow with your business. And if you don’t have all the details and you make a decision super early, you might inadvertently lock yourself in.”

His advice is straightforward: slow down. The urgency you feel in that window is manufactured by volume of outreach, not by any real operational deadline. Take time to evaluate options side by side. Understand what you’re committing to and for how long. The right partners will still be there in two weeks.

The Message Is Selling You Freedom – But the Fine Print Sells Something Else

One of the most consistent patterns Landrum identified across his years in sales and marketing is the gap between what carriers are sold and what they actually receive – not because companies are lying outright, but because the messaging is calibrated to resonate with a feeling rather than describe a reality.

New owner operators are entrepreneurs. They are stepping into something genuinely exciting – ownership, autonomy, the chance to build something on their own terms. The messaging that performs best in this space taps directly into that emotional state. You are your own boss. Keep all your margin. Build real wealth. The emotional case for entering trucking is easy to make because the underlying aspiration is real and legitimate.

But there is a specific form of misleading messaging that Landrum finds particularly damaging, and it centers on freight availability. “Making it appear as though all you need to do is get a truck and you’re gonna get loaded – it’s not gonna cut it,” he said. “That’s the biggest thing that I see carriers misled by specifically in the early days. Oh, you get this truck, you set up your authority this way, you stand up an LLC, and you’re gonna make it. It’s not gonna work that way. It’s not that simple.”

This brand of messaging exploded during COVID when new authority applications were, in Landrum’s words, “astronomical.” The freight market was genuinely exceptional during that period. Loads were abundant. Rates were historically high. Any carrier who got started in 2020 or 2021 found freight without much difficulty, and that created a feedback loop where the companies profiting from new authority sign-ups had every incentive to keep telling the same story even after the market shifted. Their business model was built on authority activations, not carrier longevity. A carrier who churned out of the market in six months still generated the same revenue for certain service providers as a carrier who thrived for five years.

“Those businesses who were working with carriers to get their authority started were only benefiting from authorities getting started,” Landrum said. “And so it was in their best interest to continue saying that the market was really good and getting carriers through the point by which they would make their money – and then not have invested interest in that carrier’s long-term success.”

That is the critical accountability test for any company trying to earn business from a small carrier. Does their business model require your success, or just your activation?

Landrum is candid about where factoring companies sit on that question. “A factoring company cannot make money unless their clients make money. It’s not possible. We strictly generate revenue off of your business activity. If we’re doing anything to hinder your business from operating, we’re shooting ourselves in the foot. We’re cutting ourselves out of any opportunity.” That structural alignment doesn’t make every factoring company trustworthy, but it is a meaningful filter when evaluating which partners are genuinely invested in your operation’s survival.

What Companies Get Wrong About Talking to Small Carriers

The marketing technology available to companies reaching trucking audiences has grown dramatically. New software startups enter the space with sophisticated digital marketing capabilities, sharp creative, and platforms that look impressive. The visuals are clean. The messaging is polished. The features list is long.

And much of it misses the mark entirely with the audience it is trying to reach.

“Particularly these days, there’s a whole lot of new tech out there,” Landrum said. “A lot of software comes out of new startups that come in full force. They’ve got the full world of marketing experience behind them, and they put out some really nice flashy-looking stuff. But it’s just technology, and I think people are looking for people still in this space. We’re still very person to person, not just person to screen.”

The one to five truck carrier is not making decisions about financial services and operational tools the way a corporate procurement manager does. They are building a business on trust and relationship, the same way they build freight relationships. A slick interface is not a substitute for knowing that when something goes wrong – a broker dispute, a payment problem, a compliance question – there is a real person on the other end who understands their business and will respond.

Large companies also tend to lead with features before establishing foundations. They show every capability and integration and add-on before explaining what the core service actually does, how it works daily, and what a carrier can reliably expect as a baseline. “What’s the normal baseline that I can expect?” Landrum framed it. “And then what are all the cherries on top? And that’s really what does sway a decision a lot of times – but is the core offering solid? Is it logically described? Does it make sense to them? People jump to the end too much and show all the flashy stuff without educating the consumer on what you’re offering, what it does for them, and how it makes their business better.”

The Most Self-Destructive Habit in the Industry

Of everything Landrum has observed over nearly a decade of working with carriers at every stage of the business, one pattern stands above the rest as the single most reliable predictor of failure.

Not running the wrong loads. Not choosing the wrong factoring company. Not failing to negotiate rates.

Not having a business plan.

“Specifically back in my sales days – people would sign up with us, they’d get their authority activated, they’d have the stickers on the truck, everything ready to go, and they’d call and say, ‘Alright, I’m ready for my first load.’ And I’m like – you’re calling the wrong person for that.”

The story captures the gap between what people think they are buying when they set up a trucking business and what they actually need to know before they can operate one. Getting a DOT number and purchasing authority is not the same as building a company. Understanding how to find freight, how to set rates that cover operating costs, how cash flow works across the lifecycle of a load, how to build broker relationships over time – these are the actual operational foundations that determine whether a business survives its first year.

The excitement of entrepreneurship is real and it is not something to dismiss. Landrum is careful about that. “They’re entrepreneurs. They’re starting a business. That’s an exciting thing.” But excitement without structure is what produces the carrier who calls their factoring company looking for loads. It is what produces the carrier who hits month four with no cash reserve because nobody explained how the gap between fuel cost and payment receipt works. The plan doesn’t have to be formal or elaborate. But the thinking has to happen before the truck rolls, not while it’s parked waiting for a solution.

You Are a Business, Not a Truck Driver

One of the most important reframes Landrum offered is one that a lot of carriers resist hearing, especially early on. When you hold your own authority, you are not a truck driver who happens to have a business. You are a business owner who happens to drive a truck. That is not a subtle distinction. It changes how you present yourself, how you communicate, how you negotiate, and ultimately how much access to quality freight you earn over time.

“You’re working with net payables. You’re working with companies. The speed at which you communicate with them, with the brokers, the professionalism in those communications, the way that you present your business – all of those things help make the people who are going to give you freight trust you more and look to you more. That’s how you get your foot in the door for ongoing freight relationships.”

This is where something as seemingly minor as an email address matters. A professional domain email – your name at your company name dot com – signals to a broker that you are serious about being easy to work with, that you are organized, and that dealing with you is going to feel like dealing with a business rather than chasing down an individual. It is a small thing that carries disproportionate weight in a first impression. Brokers who give recurring freight to carriers are doing so because they trust the relationship. You build that trust in dozens of small ways long before the rates ever come up.

How to Cut Through the Noise

When everything is competing for your attention and every platform is full of people claiming expertise, the question becomes how to identify the signal worth paying attention to. Landrum’s framework is simpler than most people expect.

Look for consistency across platforms. If you’re seeing the same companies and the same voices show up whether you’re on Facebook, searching Google, reading FreightWaves, or scrolling Reddit, that consistency is not an accident. It means those companies have been present and credible across multiple channels over time. Size and reach in this industry are typically earned, not manufactured overnight. A company that has built a reputation across the entire trucking community likely got there because carriers had real experiences worth sharing.

Lean into the community. This is where trucking is genuinely unusual as an industry. Small carriers who should theoretically view each other as competitors tend to treat each other as a community instead. There are Facebook groups, Discord servers, and forums where carriers openly share experiences, warn each other about problematic brokers or service providers, and ask questions without judgment. The knowledge inside those communities is boots-on-the-ground real in a way that no company’s marketing will ever be.

“Don’t be afraid to lean into the communities,” Landrum said. “In any other industry, all of these small businesses would be viewing themselves as competitors. But for one reason or the other, the trucking space does not view it that way. They view themselves as a community sharing knowledge, helping out their counterparts.”

That community is one of the few places where you can get an honest answer about what it is actually like to work with a specific company, because the people answering have real money and real miles on the line.

The Straight Truth for Anyone Starting Out

If you are new to running your own authority, or if you are in your first year and starting to realize the gap between what you were told to expect and what you are actually experiencing, here is the unfiltered version of what Landrum spent nearly an hour saying in different ways.

It is still possible to build a successful trucking business. The market is harder than it was in 2021, but carriers who enter with the right structure, the right partners, and a clear understanding of their numbers can and do make it work. That part of the messaging is not a lie.

What is not true is that success is simple, that freight finds you automatically, or that signing up for the right services handles the hard parts for you. You have to go find the freight. You have to build the relationships. You have to know your cost per mile before you accept the first load. You have to understand what you are signing when you enter a factoring agreement, including how long the contract runs, what it looks like to exit, and how that company represents itself to the brokers you are going to depend on.

The companies associated with your business are a reflection of your business. The factoring company that processes your invoices is dealing with your brokers after every load. If they are slow, difficult, or unprofessional, that reputation attaches to you. Choose partners the way you would choose who represents your company – because they are.

Slow down when the pressure to decide feels urgent. Ask questions you’re afraid sound naive. Read what you’re signing. Find people who have been operating for three years and ask them what they wish they had known on day one.

The noise is loud. It is designed to be. The carriers who build something real are the ones who learned to hear past it.

*John Landrum is Vice President of Marketing at OTR Solutions, where he oversees brand strategy, carrier partnerships, and product development. He joined the company in 2017 as an inside sales representative and has spent nearly a decade studying how carriers make decisions and how companies communicate with them.

The Recovery Was Finally Within Reach – Rising Fuel Costs May Have Just Pushed It Back Out

Cars and trucks in traffic

For the first time in three years, the trucking industry was starting to believe it again. Not celebrating – this industry is too battle-tested for that – but believing. The numbers were moving in the right direction. Spot rates were climbing. Excess capacity had bled out of the market through years of carrier exits, ELP enforcement and suppressed fleet investment. Sentiment surveys were turning positive. Analysts who had spent 2023 and 2024 delivering bad news were finally starting to use words like “inflection point” and “rebalancing.” The freight recession that began in April 2022 appeared to be, at long last, losing its grip.

That was two weeks ago.

Chart: SONAR (NTI.USA). Spot rates over the past 3 months have looked more like a roller coaster than a gradual climb out.

Today, crude oil is trading between $100 and $111 per barrel. Diesel is at $4.60 nationally and heading toward $5. The war between U.S.-Israeli forces and Iran has threatened closure of the Strait of Hormuz – the chokepoint through which roughly a third of global seaborne crude flows daily. The Federal Reserve, which had been positioning to cut rates and give the broader economy some breathing room, is now staring at an oil-driven inflation spike that makes rate cuts politically and mathematically difficult to justify. And the fragile, hard-won recovery sentiment that small carriers were just beginning to lean on has been put squarely back in question.

This is a cash and capital story. And if you run a small trucking operation, you need to read it like one.

What the Recovery Was Actually Built On

Before you can understand what is at risk, you have to be honest about how thin the recovery foundation was. The trucking industry did not recover in 2025. It survived. There is a meaningful difference.

What actually happened was a supply-side correction. Carrier exits accelerated through 2023 and 2024, with the FMCSA recording more than 6,400 authority revocations in December 2025 alone after reinstatements. Weak profitability, high insurance costs, elevated financing expenses, and three years of rates that didn’t cover operating costs pushed the least-capitalized operators out of the market. Class 8 truck sales hit their lowest January total since 2011. Fleet investment was replacement-driven at best. The trucking industry was shrinking itself toward balance with demand rather than growing into it.

The demand side of the equation never really showed up. Consumer spending shifted toward services after the pandemic and never fully rotated back to the goods economy that trucking lives on. Manufacturing remained soft. ISM New Orders, specifically identified as the leading indicator for any meaningful trucking expansion – never convincingly crossed the 55 threshold that has historically preceded every major expansionary cycle in trucking. FTR Transportation Intelligence called it “the most favorable operating environment for carriers since February 2022” heading into 2026, but the specific language was careful: favorable operating environment, not demand surge.

A Bloomberg Intelligence survey of more than 600 motor carriers published in February 2026 found that sentiment was turning positive, but 68 percent of carriers had no plans to purchase additional equipment in the first half of 2026. More than a third of carriers said they were uncertain about where they’d be professionally in six months. Recovery optimism was real, but it was the cautious optimism of people who had been punished enough to not get ahead of themselves.

What the industry needed – what it was positioned for if things had stayed calm – was a demand catalyst. A spark on the freight side to meet the tightened capacity picture and finally generate the rate environment that would let carriers rebuild margins and cash positions. FTR went as far as saying that “something close to the 2021 market no longer seems inconceivable” if demand materialized. That was significant language from a firm not known for optimism.

Then oil broke $100.

What a Sustained Oil Shock Does to an Economy – And Therefore to Freight

The connection between fuel prices and freight demand is not always direct or immediate, but it is real and it compounds over time in ways that small carriers feel before large shippers acknowledge.

Here is how the transmission mechanism works. When oil prices spike sharply, the first impact is at the consumer level. Higher gas prices act as what economists call a “stealth tax” on household budgets – money that was going to discretionary purchases now goes to the fuel tank. Consumer confidence drops. Spending on goods – exactly the category that generates trucking demand – contracts in favor of essentials. The rough rule of thumb economists use is that a $10 per barrel increase in crude translates to roughly a 25-cent per gallon increase in gasoline at the pump. Crude went from $63 to $111 in a month. Work that math.

The second-order effect hits business investment and manufacturing. Producers face higher input costs – fuel, lubricants, plastics, fertilizers, and hundreds of other petroleum-derived products all cost more. Companies that were already being cautious about inventory building and capital commitment become more cautious. Orders slow. Production slows. Less manufacturing means less freight.

The third layer is monetary policy, and this one matters enormously to small carriers’ cash positions right now. The Federal Reserve had been on a path toward rate relief heading into 2026. Lower rates would have eased equipment financing costs, made truck purchases more affordable, and reduced the cost of the operating lines of credit that small carriers rely on to bridge cash flow gaps between load completion and payment receipt. That path is now disrupted. Analysts tracking the Iran conflict noted that the oil surge has reintroduced stagflation – rising inflation alongside slowing economic growth – as a primary concern for central banks. The Fed has signaled a pause in its easing cycle. Markets are pricing in a “higher-for-longer” rate environment through the end of 2026. Every small carrier who was waiting for rates to drop before refinancing equipment or establishing credit capacity just had that timeline extended indefinitely.

Estimates from economic analysts suggest a sustained $90 per barrel price point would add at least 0.6 percentage points to U.S. headline inflation. We are currently well above $90. That number will grow, and it will land in an economy where consumer demand was already growing at a modest 1.5 percent annualized rate earlier in 2026. A freight market that needed a demand catalyst to realize its recovery is now staring at demand headwinds instead.

The Cash Position Problem for Small Carriers

This is where the cash and capital reality of this moment has to be spoken plainly, because the industry press tends to cover freight markets in aggregate terms that obscure what is actually happening at the ground level for a carrier running three trucks out of Charlotte or a hotshot operator working the Southeast on a load-board-dependent model.

Small carriers entered this period already carrying the weight of three years of compressed margins. The carriers who survived 2023, 2024, and 2025 did so by cutting costs to the bone, deferring equipment purchases, running older trucks longer, and accepting rates that left almost nothing for savings or reserve.

Fuel is trucking’s largest variable operating cost. At $4.60 diesel, a truck averaging 6 miles per gallon is spending $0.77 per mile in fuel alone. At $5.00 – that number rises to $0.83 per mile. ATRI’s operational cost benchmarks put the fully-loaded cost of running a truck at approximately $2.27 per mile in 2024 and 2025. Fuel cost increases of six to eight cents per mile on top of an already-thin margin structure don’t just reduce profit. They eliminate it. In some cases they invert it, turning every loaded mile into a cash draw rather than a cash contribution.

The problem is compounded by payment timing. Fuel is paid at the pump, today, in cash or on a fuel card that bills weekly. Freight revenue without factoring comes in up to 30 to 45 days later for carriers, or three to five days later with a factoring fee deducted. The cash flow gap that always exists in trucking gets wider when fuel costs spike. A carrier who ran five loads this week spent $1,500 to $2,000 more in fuel than they budgeted for when they accepted those loads. That money is gone from the operating account now. The revenue from those loads arrives in three to five weeks. Something has to bridge that gap. For carriers with healthy cash reserves, that is a manageable inconvenience. For carriers who entered this fuel shock already running week to week – which describes a significant portion of the small carrier market after three years of freight recession – that gap is a genuine solvency risk.

What You Need to Do With Your Capital Right Now

Understanding the big picture is useful. Knowing what to do with that information inside your own operation is where it actually matters.

First, your fuel surcharge structure needs to be documented, communicated, and enforced starting this week. Not next week. This week. The EIA national average diesel price is your benchmark. Your baseline should reflect what diesel was when you last set your rates. If you built your cost model at $3.50 diesel and you’re running at $4.60, that is a 110-cent gap. At the industry-standard formula of one cent per mile per six-cent fuel increase, you are looking at roughly 18 cents per mile in surcharge exposure on every loaded mile. On a carrier running 8,000 miles a week, that is $1,440 per week walking out the door unrecovered if you haven’t updated your surcharge communication.

Second, look hard at your cash position and what you have available in credit. If you have an operating line you haven’t drawn on, now is the time to understand exactly what is available and at what cost. Not to use it recklessly – to know it is there. A carrier who understands their liquidity options is a carrier who can make decisions from a position of choice rather than desperation. Desperation is when you accept loads below your breakeven because you need cash and you don’t know what else to do.

Third, review your load selection criteria using current fuel prices, not historical ones. Run your cost-per-mile calculation today, with diesel at $4.60, and identify the minimum rate per mile below which you are losing money on every load. Write that number down. Post it somewhere visible. Do not accept loads below that number out of habit or anxiety. A load that doesn’t cover your operating costs is not revenue. It is a financing event. You are lending your truck, your time, and your cash to a shipper who will pay you back in 30 days – and charging less than it cost you to do it.

Fourth, if you don’t have a factoring relationship and you’re concerned about cash flow, now is the time to evaluate one seriously. The carrying cost of a factoring fee is real, but it is frequently smaller than the cost of the operational disruptions caused by cash flow gaps – loads you can’t take because you can’t fuel the truck, maintenance you defer because the account is thin, opportunities you miss because you can’t afford to deadhead to the better freight lane.

The Bigger Picture – Recovery Delayed, Not Destroyed

The recovery that the trucking industry could see clearly as recently as February 2026 has not evaporated. The capacity corrections that created the favorable supply environment are still in place. The carriers who exited the market are not coming back. The Class 8 fleet is still contracting. The structural conditions that were finally aligning for carriers are still structurally present.

What the oil shock has done is delay the demand catalyst that was needed to translate those supply-side gains into actual rate recovery and margin rebuilding. If oil stabilizes or retreats as the Iran conflict de-escalates – and there are early signals of back-channel diplomatic activity even as this is being written – the macro damage to consumer spending and freight demand may be manageable. The most optimistic scenario is a sharp spike followed by partial stabilization, similar in shape if not magnitude to the early days of the Ukraine conflict in 2022.

The pessimistic scenario – and carriers need to plan for it even if they don’t believe it is likely – is that the Strait of Hormuz disruption persists for weeks rather than days, and the oil price environment stays elevated through the second quarter of 2026. In that case, the demand slowdown that flows from $5 diesel and $4.00 gasoline will compress freight volumes at exactly the moment the market was positioned to absorb stronger demand. Recovery gets pushed from Q2 2026 into late 2026 at best, and possibly into 2027. The carriers who survive to see the other side of that are the ones who protect their cash position aggressively right now, enforce their fuel surcharges without apology, and don’t let the load board bully them into rates that destroy their own business.

Crude Just Hit $110 – What the War in Iran Means for Every Small Carrier Running Today

A truck driver cleaning windows while fueling

This is not a drill, and this is not a market correction. What is happening to oil prices right now is a full-scale geopolitical energy shock, and if you operate a small trucking company – a fleet of one to twenty trucks, an owner-operator running solo, a box truck or hotshot operator trying to hold your margins together – you need to understand exactly what is driving this spike, how fast it is moving, and what it is about to do to your operation if you are not already making adjustments.

One month ago, crude oil was trading at $63 a barrel. As of today, March 8, 2026, West Texas Intermediate futures opened above $100 and have been reported trading as high as $111. That is a 75-plus percent increase in crude prices in 30 days. Diesel, which was already climbing off winter lows, has surged 22 cents more than gasoline over just the past week alone, sitting at $4.60 per gallon nationally as of Sunday’s readings – and GasBuddy’s Patrick De Haan is now putting an 85 percent probability on diesel hitting $5 a gallon within the next month.

You have never seen prices move this fast in your operating lifetime unless you were in business in 2022 when Russia invaded Ukraine. What you are looking at right now is potentially worse.

What Is Actually Happening – The Short Answer

On February 28, 2026, Iranian Supreme Leader Ayatollah Ali Khamenei died. Days later, U.S. and Israeli forces launched a coordinated wave of airstrikes targeting Iran’s nuclear facilities and military command structure, killing Khamenei and other senior officials in the Islamic Republic. The military operation, referred to in some reporting as “Operation Epic Fury,” fundamentally destabilized the most critical maritime chokepoint on the planet.

Iran’s Revolutionary Guard responded by declaring the Strait of Hormuz closed and threatening to set on fire any vessel that attempted to pass. The Strait of Hormuz is not just a body of water on a map. It is the single most important energy corridor in the world. In 2025, more than 14 million barrels of crude per day moved through that strait on average – representing roughly a third of the world’s total seaborne crude exports. The conflict has already led to the suspension of approximately a fifth of global crude oil and natural gas supply. Saudi Aramco’s Ras Tanura refinery and crude export terminal, one of the largest in the world, has closed due to attacks with damage still being assessed. Iran also launched missile strikes targeting broader regional energy infrastructure, including attacks linked to vessels in the Gulf.

Goldman Sachs raised its Q2 2026 Brent forecast by $10 a barrel almost immediately after the conflict began. Barclays warned clients that $100 Brent was not only possible but that prices above $120 were conceivable if disruptions deepened. UBS flagged that attacks on regional infrastructure like Qatar’s LNG facilities could push Brent well past $90. The market didn’t wait for analyst notes to catch up – it moved on its own.

JP Morgan framed the shift clearly: the market had moved from pricing in a theoretical geopolitical risk premium to dealing with tangible, operational supply disruptions – refinery shutdowns, export constraints, and shipping routes in active conflict zones.

Why Diesel Is the Real Story for Trucking

Here is what shippers and the general public don’t fully understand, and what every carrier in this industry needs to internalize right now. Diesel is not just rising because crude is rising. It is rising faster than crude, and faster than gasoline, because of a structural supply problem that existed before a single missile was fired.

The brutal winter of early 2026 created massive demand for heating oil across the Northeast. Home heating oil and diesel are essentially the same product – they come from the same refining stream. The heavy draw on heating oil stocks heading into this conflict meant diesel inventories were already thinner than normal when the price shock hit. You do not absorb a supply disruption of this magnitude from a healthy inventory position. You absorb it from a depleted one, and that is exactly what is happening.

Since the Iran conflict began, gasoline at the pump is up 47 cents nationally. Diesel is up 84 cents over the same period. That is nearly double the rate of increase. Diesel at $4.60 today, with $5 now the base case projection within the month, means carriers are staring down a fuel environment they have not seen since the 2022 Ukraine war shock – and that one also did not come with a strait closure threatening a third of global seaborne oil supply.

The diesel versus WTI crack spread – meaning the premium refiners can charge for finished diesel fuel over the cost of the crude they use to make it – has risen to approximately $70 per barrel. That is not a normal refinery margin. That is a distressed market screaming that supply of refined product is critically tight relative to demand.

What This Does to a Small Carrier – Truck by Truck

Large carriers have systematic fuel surcharge schedules that automatically adjust with EIA published diesel prices every Monday. They built those schedules after 2008, after 2022, and they know exactly how to pass fuel cost increases through to shippers – often within days. UPS has already increased its weekly fuel surcharge and is expected to do so again. Mega-carriers have fuel hedges, bulk purchasing agreements, and the contract muscle to force surcharge adjustments quickly.

Small carriers – especially the one to five truck operations, the owner-operators, the guys running regional flatbed or dry van off the spot market – do not have those protections in place. They absorb the increase in real time, at the pump, before they figure out how to recover it from their loads. And in a market that has already been soft on spot rates for much of 2025 and early 2026, trying to raise rates suddenly on a shipper relationship you’ve worked months to build is a conversation nobody wants to have.

Let’s talk math because this is where the damage lives. A standard Class 8 truck gets roughly 6.5 miles per gallon loaded. At $4.60 diesel, you are spending $0.79 per mile in fuel. If diesel reaches $5.00, that number goes to $0.85 per mile. That is a six-cent increase per mile on every load you run. On a 1,000-mile load, you just lost $60 more in fuel cost than you planned for when you accepted that rate. On a 2,500-mile round trip – say, Southeast to Northeast and back – that is $150 in unplanned fuel expense per truck per cycle. Multiply that across three trucks, five trucks, ten trucks, and you are talking real money disappearing from operating cash before the month closes.

For box truck operators and hotshot runners, the math is different but the problem is the same. Box trucks running 8 to 12 miles per gallon diesel are somewhat more insulated per mile, but those operators typically run on thinner margins to begin with and are often serving final-mile or partial lanes where rate increases are harder to negotiate quickly. And hotshot operators in the oil and gas sector face a strange paradox right now – crude prices rising could eventually mean more oilfield activity and freight, but in the short run, the shock is moving faster than the work.

The breakeven impact deserves honest attention. If you have not calculated your cost per mile recently, this week is the week to do it. Fuel alone is not your only exposure here. Tire prices, lubricants, and certain parts are petroleum-derived products. When crude spikes, those costs follow with a lag. The first-order impact hits your fuel card. The second-order impact hits your maintenance budget 60 to 90 days later. You need to be planning for both.

Fuel Surcharges – What Small Carriers Need to Do Right Now

If you are operating without a fuel surcharge clause in your contracts or rate agreements, that oversight is costing you money every time fuel moves. A fuel surcharge is not a favor you ask a shipper for during a crisis. It is a standard industry mechanism that exists specifically because fuel is a volatile input cost that neither carrier nor shipper can control. The EIA publishes national average diesel prices every Monday. That number is your reference point.

The standard industry approach is to build a baseline fuel price into your cost-per-mile calculation – typically whatever diesel was when you set your rates – and then add one cent per mile for every six cent increase in the EIA national average above that baseline. If you built your rates when diesel was $3.80 and it is now $4.60, that is an 80-cent gap, which works out to roughly 13 cents per mile in surcharge owed on every loaded mile.

The conversation with shippers and brokers needs to happen now, not after diesel hits five dollars. Once you are in a rate environment where everyone is having that conversation at the same time, you are competing for surcharge recovery against every other carrier in the market simultaneously. Get ahead of it. Send written notice to your regular shippers and brokers this week. Be factual. Cite the EIA numbers. Cite the geopolitical situation. Be professional, not desperate. Frame it as a shared cost reality, not a personal financial crisis.

If you are running exclusively off load boards with no direct shipper relationships, this is the moment the load board can work against you. Brokers will be under pressure from shippers to keep rates contained even as fuel climbs. Some will hold. Others won’t. You need to know your floor – the rate below which you are physically losing money on the load after fuel – and you need to hold it. A load that doesn’t cover your costs is not a revenue event. It is a debt event.

The Freight Rate Response – What to Watch

There is a version of this story where spot rates rise to meet the fuel increase, particularly as diesel surcharges flow through to shipper costs and shippers begin negotiating for more reliable coverage from carriers who are still willing to move. That dynamic does eventually happen in sustained fuel shocks. It happened in 2022 after the Ukraine invasion.

Photo: SONAR. Spot rates over the past 4 days have cooled off and have dropped from the 2/6/2026 high NTI of $2.82. Today’s spot rate average sits at $2.77.

But it does not happen immediately, and it does not happen uniformly. In the first weeks of a fuel spike, brokers absorb pressure from both sides. Carriers need higher rates. Shippers need cost containment. Spot rates lag. The carriers who survive the gap period are the ones who manage their cash closely, don’t take loads below their breakeven, and have enough financial cushion to keep the trucks rolling while the market catches up.

The geopolitical situation adds an additional variable that makes this shock different from a domestic demand surge. If the Strait of Hormuz remains functionally disrupted even partially, and if the Iran conflict extends rather than de-escalates quickly, this is not a two-week spike that normalizes. It is a multi-month structural shift in energy costs. Some early reporting suggests de-escalation signals are beginning to emerge in diplomatic back-channels, and crude retreated toward $72-$75 on some of those reports earlier this week before surging again. That kind of volatility – $63 to $111 and then to $75 and back above $100 in the span of days – is itself a warning about how unstable the situation remains.

Plan for persistence, not a quick recovery.

What’s going on at the Louisiana staged truck accident trial?

While FreightWaves has been covering the Louisiana staged accident scheme for several years, we were not in a New Orleans courtroom this past week to follow the first criminal trial arising from the various indictments in the scheme. The jury trial is expected to run a total of three to four weeks.

But the NBC New Orleans affiliate WDSU is there and reporting on it extensively. 

As a service to our readers, and with a tip of the hat to the reporting team at WDSU, here are some of the highlights of the first few days of testimony, drawn from the television station’s reporting and background coverage from FreightWaves from the start of this bizarre saga.

Who’s on trial? On trial are attorneys Jason Giles of the King Law Firm and Vanessa Motta of her own firm who are charged with helping to orchestrate the staged accidents where a car full of people would crash into a truck in the New Orleans area and then hope to collect a big payout. Federal prosecutors dubbed their investigation “Operation Sideswipe.” The King Law Firm is also a defendant.

Keating speaks: Among the most notable testimony this week came over two days from Danny Keating, the one attorney who pleaded guilty all the way back in 2021 and whose sentencing has been postponed numerous times.

Keating said his involvement in the staged accidents scheme began in 2017 and ended in 2020. That latter year is when the fraud began to unravel and indictments started to come out of the U.S. Attorney’s office for the Eastern District of Louisiana. It also is the year when in September, Cornelius Garrison, a so-called “slammer” who would plow a car into a truck, pleaded guilty and began to cooperate with prosecutors. Soon after that, Garrison was  was gunned down in his home. Motta and Giles are not charged in that death, but Motta’s fiance  Sean Alfortish is a defendant in that case that has yet to go to trial. (The WDSU coverage reports the two are still engaged, though Alfortish, being charged with a murder, remains in federal custody.)

Keating said Giles introduced him to Damien Labeaud, one of the on-the-ground organizers of the scheme who was behind the wheel for some of the collisions. The drivers would then flee the scene and other people in the car would move their places so that a different person was sitting in the driver’s seat. 

Labeaud also pleaded guilty several years ago and like Keating has had his sentencing postponed several times. They are both now scheduled to be sentenced next month, Labeaud on April 2 and Keating on April 9. 

Keating said at the start of the scheme, he was approached by Lebeaud and Giles. Keating said he was “short on cash” after going through a divorce.

As WDSU described Keating’s testimony, “Keating testified that he had known Giles since 2015, and said some of the staged wrecks cases he was a part of came from Giles’ office. Communications surrounding the wrecks happened mostly with in-person meetings, phone calls, and text messages. According to Keating, he kept $100,000 to $150,000 in cash at his home for payments, and admitted to having involvement in at least 120 wrecks.”

The number of wrecks he cited is staggering. If all of the incidents in the various indictments of the passengers and “slammers” indicted in the case are counted up, it would not reach 120. The U.S. Attorney’s office currently lists indictments of 49 persons. While some of the indictments described multiple collisions per indictment, the math would  suggest fewer than 120 wrecks being described in the indictments. 

No other persons charged in Operation Sideswipe have gone to trial. The others pleaded guilty usually to one or a series of mail fraud charges. Some of the persons indicted have yet to have their case resolved.

There was this testimony from Keating, which WSDU doesn’t say elicited laughter in the courtroom, but could have: “Keating testified that he would wrap payments in a newspaper that he’d then toss into Labeaud’s truck while he said, ‘Did you read the paper today?’”

Motta attorney’s opening statement: There is little doubt that on a personal level, the most intriguing relationship in the case is between Alfortish, now accused of murder, and Motta, a former stuntwoman who advertised her own law firm with her personal appearance as an obvious selling point.

Sean Toomey, her attorney, said in his opening statements that it was Alfortish who was fully at fault. “”She foolishly thought she was the hottest new lawyer in town, all the while Sean Alfortish is working behind the scenes, in the darkness, to make sure she was successful and get all the benefits of that because he’s sleeping with her,” Toomey was quoted as saying. The referrals she was getting from Alfortish were coming to him because of his relationship with the larger scheme. As WDSU described Motta, she was a “’baby naive lawyer’ with ‘terrible taste in men’ but not a criminal.”

Vanessa Motta and Sean Alfortish in an undated photo from the GoneSouthPodcast Instagram feed.

Giles’ attorney opening statement: Lynda Van Davis, who represents Giles, said in her opening statement that “once suspicions were raised within the firm, Giles acted accordingly.” 

“My client made no agreement, my client had no knowledge, and my client was not a part of this staged collision conspiracy,” Van Davis said in the opening statement.

King Law Firm opening arguments: The King Law Firm, where Giles worked, is also a criminal defendant in the case against Giles and Motta. Rick Simmons is defending the firm, and he said in his opening statements that, as WDSU described, “the King Firm obtained good results from cases and that referrals came from the success of the firm and advertising. He then pressed the jury to find a distinction between legitimate crashes and staged crashes, saying he would present that Giles and the firm did their due diligence when the allegations of suspicious activity were raised.”

Simmons said there was no relationship between the King Firm and Labeaud and Ryan Harris, another “slammer” who already has pleaded guilty.

More dollar figures: Roxanne Galliano, a CPA and tax preparer for Alfortish–who is not on trial along with Motta and Giles–testified that while preparing Alfortish’s taxes, she recorded payments to murdered potential witness Garrison totaling $119,000. She said she did not know what the payments were for, with them listed as “professional fees.”

More articles by John Kingston

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Borderlands Mexico: Authorities move to cancel permits for 350 Mexican steel importers

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: Authorities move to cancel permits for 350 Mexican steel importers; Serviacero USA buys rail-served site at Gulf Inland Logistics Park; and Phoenix-area men sentenced in $4.5M Amazon logistics fraud scheme.

Authorities move to cancel permits for 350 Mexican steel importers

Mexican authorities have suspended import activities and begun canceling permits for 350 companies involved in steel imports.

The move arrives after the government identified alleged irregularities in importer operations as part of a nationwide crackdown on smuggling and misuse of government trade programs.

Mexico’s Ministry of Economy said the companies were among 750 firms flagged for suspicious activities related to the manufacture and sale of steel products following inspections coordinated with multiple federal agencies. 

The investigation is part of a government enforcement effort known as “Operation Clean-Up,” which involves the Ministry of Economy, Mexico’s Tax Administration Service (SAT), the National Customs Agency of Mexico (ANAM), and the Digital Transformation and Telecommunications Agency.

The probe was launched after industry group CANACERO, Mexico’s National Chamber of the Iron and Steel Industry, identified companies suspected of irregular trading practices. 

Authorities said procedures have begun to cancel the companies’ participation in Mexico’s Manufacturing, Maquiladora and Export Services Industry Program (IMMEX) — a key government program that allows manufacturers to temporarily import raw materials and components duty-free for export-oriented production.

Steel is a critical input for industries driving North America’s nearshoring boom — including automotive, appliances, construction materials and heavy equipment manufacturing across the country

Mexico’s crackdown on allegedly irregular steel imports could tighten oversight of raw material flows used by export manufacturers operating under the IMMEX program, potentially creating short-term disruptions for factories that rely on imported steel.

While 350 companies have already had their import activities suspended, another 400 firms remain under investigation and are being required to provide additional documentation before regulators decide whether to open formal administrative cases. 

Among the companies cited by authorities was Bremsa Regiomontana, whose activities were suspended after investigators alleged it worked with another company, Elegant Fashion, to triangulate steel imports totaling 76,761 tons during 2025.

Officials did not specify the exact nature of the alleged irregularities, but said the enforcement actions are aimed at protecting supply chains and preventing smuggling or abuse of economic development programs.

Serviacero USA buys rail-served site at Gulf Inland Logistics Park

Serviacero USA has purchased a rail-served site at Gulf Inland Logistics Park in Dayton, Texas, where the Mexico-based steel solutions provider plans to establish its first U.S. manufacturing operation, according to a news release. 

The industrial site is located within the Gulf Inland Logistics Park, a large-scale development managed by Liberty Development Partners that offers direct access to both Union Pacific and BNSF rail networks, along with proximity to the greater Houston area and Port Houston. 

Serviacero, which has operated in Mexico for more than 60 years, said the new facility will strengthen its ability to supply customers in the U.S. through local production and expanded manufacturing capabilities. 

Gulf Inland Logistics Park is rapidly expanding as a logistics and industrial hub. Phase 1 of the development — covering about 200 acres — was completed in late 2025, and additional phases are underway with both rail-served and non-rail-served sites available for tenants. 

The park’s rail infrastructure currently includes 1,000 railcar storage spaces across two operational yards, with three additional rail yards expected to open this year, expanding total capacity to more than 2,000 railcar spots. 

Phoenix-area men sentenced in $4.5M Amazon logistics fraud scheme

Three Phoenix-area men have been sentenced to federal prison for their roles in a $4.5 million fraud scheme targeting Amazon’s logistics network, according to the U.S. Attorney’s Office for the District of Arizona.

Mughith Faisal, 29, and his brother Basheer Faisal, 28, both of Glendale, Arizona, were each sentenced to 18 months in prison.

Abdullah Alwan, 28, of Surprise, Arizona, received a six-month prison sentence. All three defendants previously pleaded guilty to wire fraud and were ordered to pay $1.5 million each in restitution to Amazon. 

According to prosecutors, Alwan previously worked in Amazon’s logistics division and used knowledge of the company’s internal transportation management system after leaving the company in 2021. 

Authorities said he manipulated delivery rate data for shipments handled by third-party carriers, inflating transportation payments within Amazon’s system. 

Basheer and Mughith Faisal operated Blue Line Transport, an Arizona-based trucking company approved as an Amazon third-party carrier. Prosecutors said the company knowingly accepted the fraudulently inflated transportation payments, helping defraud Amazon of approximately $4.5 million. 

Rapid fuel price jump hits transportation hard

Chart of the Week:  Diesel Truck Stop Price per Gallon, Dept of Energy average weekly price of diesel, Utlra-low Sulpur Diesel Rack Price, Retail to Wholesale Fuel Spread – USA SONAR: DTS.USA, DOE.USA, ULSDR.USA, FUELS.USA

Wholesale diesel prices (ULSDR, light green) jumped more than 30% last week, while retail prices (DTS daily in white and DOE weekly in yellow) increased by more than 14%. The velocity of these price changes may be more impactful than the absolute cost, which as of Friday remained below historical highs. While shippers will undoubtedly feel the pain of rising transportation costs, carriers will also face pressure from the underlying wholesale, or rack, price increases.

Fuel typically accounts for roughly 20–25% of the total cost of truckload transportation, though this share can fluctuate depending on how expensive or cheap fuel becomes. From a shipper’s perspective, rapid increases in fuel prices can wreak havoc on budgets. For carriers, fuel is a critical component of operating expenses that must be actively managed.

The latest disruption in the oil market is the most significant since Russia’s invasion of Ukraine in early 2022. It is also the first large-scale disruption since OPEC voluntarily constrained supply in the summer of 2023. That event proved relatively short-lived, as prices moderated later that fall.

For most trucking carriers, fuel is largely a pass-through cost, typically recovered through a fuel surcharge tied to the weekly average diesel price published each Monday by the DOE. Most fuel surcharge tables assume a fuel efficiency of roughly 6.5 to 7 miles per gallon. There is also usually a fixed amount of fuel embedded in the base transportation rate, which generally covers the cost of fuel up to about $1.00 to $1.50 per gallon. As a result, most surcharge tables begin around this level and increase incrementally as diesel prices rise.

Many large fleets have purchasing agreements with fuel suppliers that allow them to buy fuel in bulk at or slightly above the wholesale price. While this may appear to be an arbitrage opportunity on the surface, many carriers use this spread to offer more competitive pricing when the market is balanced and capacity is relatively loose—as has largely been the case over the past three years.

When wholesale prices rise faster than the average retail price, it compresses the buffer created by the spread between retail and wholesale diesel—labeled FUELS in orange on the chart. The smaller this spread becomes, the less flexibility carriers have to pass fuel costs through effectively. When prices ease, the opposite occurs. Recently, this spread has shrunk from around $1.02 to $0.68 per gallon.

The speed of the change is particularly important, as pricing teams typically adjust rates based on historical data. Many contract rates were likely structured assuming a spread closer to $1.20 per gallon. This means that although rates are increasing through the fuel surcharge mechanism, they may not be improving profitability and could actually be reducing it.

Spot rates tell a different story. Many smaller fleets and owner-operators do not have the volume needed to secure fuel purchasing agreements. Their costs are tied more closely to retail fuel prices, which are passed through to customers more directly and often more quickly.

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Meanwhile, the trucking market appears to be transitioning toward a tighter environment following a strong holiday season and the disruption caused by Winter Storm Fern. Spot rates (NTI) have been reluctant to decline after the late-January storm crippled transportation networks. Although it is difficult to isolate the direct effect of fuel prices from underlying market dynamics, rising fuel costs appear to have contributed to the recent increase in spot rates. As carriers continue to refuel at higher prices, these pressures could persist.

The trucking industry is no stranger to fuel price volatility, but the timing and magnitude of the current increase present potential challenges for both shippers and carriers. For shippers, the concern is straightforward: higher transportation costs. For carriers, the impact is more nuanced, as margin pressure and operational costs must be balanced against changing market rates.

There are also broader economic considerations. Rising energy costs can eventually inhibit demand if they increase too sharply. Some level of higher fuel prices can support domestic economic activity, as the U.S. is one of the world’s largest oil producers. However, if prices rise too quickly, the resulting inflation and volatility can erode demand in other areas of the economy. As of last week, conditions have not reached that level, but many economists believe the duration of the conflict will be the key factor determining how disruptive this latest geopolitical shock ultimately becomes for supply chains and the broader economy.

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.

Glyn Hughes to resign as head of TIACA

Panelists sitting on a stage at an industry conference.

Glyn Hughes will step down as executive director of The International Air Cargo Association at the end of the year, the organization announced this week.

TIACA represents the spectrum of air cargo stakeholders: shippers, forwarders, ground handlers, airports, airlines, manufacturers and IT providers. Hughes has led the group for five years, taking over during the height of the pandemic after six years as head of cargo at the International Air Transport Association, which represents airlines.

TIACA said it has launched a search for a new director general. Hughes was given more power by the board to set the organization’s strategy, personnel and finances than predecessors had.

Under his tenure, the professional development and advocacy organization surpassed 500 members; created awards programs to recognize industry leaders in sustainability; partnered to form Pharma.aero, which works to encourage collaboration and sharing of best-practices between parties in the pharmaceutical supply chain; built an online training library; appointed regional representatives in Latin America, India, China and the Middle East; and increased the number of industry events. 

Instead of a biannual trade show, TIACA now holds events in Miami and Abu Dhabi on a rotating basis. The next Air Cargo Forum is Oct. 26-29 in Miami.

Hughes has directed TIACA to focus more on outreach programs in areas such as safety, security, digitalization and innovation, and less on trying to shape national and international regulations.

Hughes is the second head of an air cargo trade association to announce his departure this year. Last month, Brandon Fried tendered his resignation as executive director of the U.S.-based Airforwarders Association, effective at the end of the year.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

Air cargo shippers scramble to mitigate Iran war impacts

Airforwarders Association chief Fried calls it quits after 21 years

Here’s where container rates will go in extended Iran war

As the U.S. threatens to escalate attacks against Iran, the shutdown of a key Persian Gulf shipping lane is causing congestion at regional ports that threatens to spread to the global supply chain.

Now entering its second week, the undeclared war has hampered ports and vessel movements in the region as Iran effectively shuts down the Strait of Hormuz, the narrow passage to the Persian Gulf.

“The U.S.-Israel strikes on Iran and subsequent Iranian retaliation targeting multiple countries in the area since the weekend are driving significant logistics disruptions in the region which could start to be felt more broadly if the conflict stretches on,” said Judah Levine, head of research for ocean and air analyst Freightos (NASDAQ: CRGO).

Six tanker vessels in or near the Strait of Hormuz came under attack early this week, Levine said in a note to clients. But President Donald  Trump posted on social media that the U.S. would facilitate insurance and naval escorts to keep oil tankers moving through the strait, “though experts are skeptical of the feasibility of and speed at which these could be provided.”

About 20% of the world’s crude oil moves through the waterway; 80% of Iran’s output goes to China. While that would seem to put a crimp in Beijing’s supply, Tehran has a new freight-only rail line to China that opened regular operations in 2025 as a bypass to the Strait of Hormuz. It’s unknown what capacity the route can support but plans envision hundreds of trains per year. 

DP World briefly suspended operations at the container port of Jebel Ali in Dubai, Levine said, after an aerial interception caused a fire there Saturday night but reopened on Monday. 

While regional ports remain operational, Levine said major carriers are managing security risks by diverting vessels, cancelling sailings and suspending new bookings.

“Hapag-Lloyd and MSC suspended bookings out of Persian Gulf ports and from all origins to these ports – including Oman and United Arab Emirates ports on the Gulf of Oman side of the strait because of their proximity,” he said. “CMA CGM stopped accepting all bookings to and from Persian Gulf ports only. Maersk suspended all new reefer bookings to the entire region, and bookings out of India to the gulf because of the short lead time.”

For now Maersk (MAERSK-B.CO) is still accepting general bookings from the Far East, “possibly reflecting optimism that the Strait of Hormuz could reopen relatively soon.”

But the canceled sailings mean gulf-bound containers are starting to pile up and threaten congestion in India. “They could likewise lead to some backlogs at Far East origins that may start to be felt by other shippers out of those ports if the shutdown lengthens,” Levine said.

Carriers still sailing to the region are diverting containers already in transit to alternative destinations in the area with most volumes likely to be offloaded at the major Far East transshipment hubs in Singapore, Malaysia and Sri Lanka. 

“A similar shift to transshipment in the early months of the Red Sea crisis led to significant congestion at these ports in 2024, but with lower volumes and more port capacity this time, congestion should not be as severe,” Levine predicted.

Annual container traffic through the strait totals 2% to 3% of global volumes. Estimates of capacity from approximately 100 container vessels stranded in the Persian Gulf range from 1% to as much as 10% of effective capacity. 

“The longer these vessels and equipment are out of circulation, the more likely that reduction will be felt in terms of available capacity and equipment out of the Far East,” Levine wrote. “When traffic through the strait resumes, there will likely be some vessel bunching at these ports too, as ships arrive off schedule. Taken together with climbing fuel costs, these factors could start pushing rates up on non-gulf lanes.”

CMA CGM introduced an emergency surcharge of $3,000 per forty foot equivalent unit (FEU) for containers heading to the gulf, Levine noted, and other carriers are also applying fees for diverted bookings. Freightos rates for Shanghai to Jebel Ali spiked from $1,800 per 40-foot container on March 1 to more than $4,000 per FEU by March 3, likely reflecting these surcharges.

On the main east-west trades, the approaching end of the Lunar New Year holiday saw stable rates. Asia-U.S. West Coast prices were unchanged at $1,843 per FEU, and Asia-U.S. East Coast prices stayed level at $3,022 per FEU.

Maersk and CMA CGM retreated from their abortive return to the Red Sea after Houthi rebels in Yemen threatened to resume attacks in support of Iran. Major liner operators have diverted away from the Suez Canal route and around the tip of Africa since late 2023 for services connecting Asia with the Mediterranean, Europe and the United States. The Iran situation will possibly push a full Red Sea return farther off again, Levine said.

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Businesses are rushing to secure alternative airlift for cargo shipments and bracing for higher freight rates and surcharges from airlines as continued airspace and airport closures in the Middle East due to the Iran war constrain aircraft availability and force lengthy detours, effectively reducing available capacity.

Even if the bombing were to end this weekend it would take several days to eliminate shipment backlogs at various hubs and for airlines to restore normal network activity, according to logistics experts.

“And on routes which actually have high load factors, the cargo that’s stranded will take several weeks to be cleared throughout the global network. If it’s perishable or time-sensitive cargo, it could be unsalvageable,” said Glyn Hughes, director general of The International Air Cargo Association during a media conference call on Wednesday.

The crisis could prove a boon for airlines and logistics companies as shippers look to avoid ocean shipping delays and shipping lines jettison Middle East-bound cargo in India, Sri Lanka and other locations.There could be a shift from ocean shipping to air to bypass ocean bottlenecks, which could benefit air freight pricing, said Kuehne+Nagel CEO Stefan Paul during an earnings presentation.

Air cargo volumes grew 4% year over year in 2025 and started strong this year, with demand up about 6% in the first two months and outpacing capacity growth of 4%, according to freight intelligence firm Xeneta.  

Airports in Dubai, Abu Dhabi and Qatar, which are major freight transshipment hubs for trade moving between Europe and Asia, are closed to commercial traffic — with some emergency flights now allowed.

Global air cargo capacity has fallen 18% week-over-week, with 13% directly tied to large Middle East carriers like Emirates, Qatar Airways and Etihad Airways, according to air logistics consultancy Rotate.

Freighter and passenger-belly capacity has dropped nearly 40% on the Asia-Middle East/South Asia-Europe corridor, pulling global cargo capacity 21% below the pre-Chinese New Year level in mid-February, when airlines park some cargo jets because factories are closed and not exporting, said Aevean, an air logistics consulting firm.

Passenger and cargo airlines have paused service to Israel and other Middle East nations, or rerouted flights until hostilities calm down. FedEx has suspended all flights in, and around, the Arabian Gulf. Jumbo jet freighter operator Cargolux has cancelled all Middle East flights, with the exception of Muscat, Oman. 

Qatar Airways Cargo, the largest non-express cargo airline in the world by traffic, said operations remain suspended because Qatari airspace remains closed. Some limited Qatar Airways Cargo freighters continue to operate on routes that don’t go through Doha. Emirates said it has begun operating sporadic passenger and freighter flights on select routes.

“About 80% of the India-Europe cargo goes through the Middle East, which means that a lot of vaccines and pharmaceuticals are not able to make their way through to Europe. If this lasts a few weeks we can anticipate drug shortages,” Hughes said.

The closure of major container shipping ports in the United Arab Emirates, Saudi Arabia and other Gulf countries could also contribute to extended lead times, particularly for sea-air shipments, integrated shipping giant Maersk said in a customer notice. Dubai, in particular, is a major connection point for shipments that move from Asia by vessel and are then transferred to aircraft for transport to destinations in Europe or the United States. The sea-air mode is used by companies looking to save money on air cargo, which can cost six-to-eight times more than ocean freight, but get faster transit times than shipping by sea.

Freight forwarders are already chartering flights to compensate for the lost capacity. Kuehne+Nagel, the world’s largest forwarder by volume, warned that backlogs of Europe and U.S.-bound cargo in Asia could begin building up by the beginning of next week. 

Air cargo to the Gulf is mostly available via Riyadh, Saudi Arabia, and Oman with onward distribution via truck. 

Other options for Asia exports to Europe are sea-air transload services via the Maldives, truck-air service with ground transport from Xi’an, China, to Tashkent, Uzbekistan, where shipments are reloaded on freighter aircraft, and sea-air service from China and Vietnam to Los Angeles.

Upward pressure on rates, fees

Meanwhile, air freight rates are rising sharply due to rerouting of aircraft, reduced payloads and rising fuel costs. And the effects extend far beyond the Middle East. 

On the Asia-Europe trade lane there are only two routing options — north via Afghanistan then the Caucasus, or south via Oman, Saudi Arabia and Egypt — because the four-year-old Ukraine war has shut off Russian airspace for most airlines. 

Long detours require aircraft to carry more fuel, limiting payload capacity and the amount of cargo that can be carried, or make time-consuming and costly refueling stops. 

Carriers tend to prioritize humanitarian aid, military cargo, perishable produce, pharmaceuticals, premium shipments and contract customers over general cargo booked at the last minute, Seko Logistics reminded customers in a bulletin.

Southeast Asia-Europe shipping rates were up more than 6% to $3.82/kilogram since Friday, according to Freightos, a price benchmarking agency and freight marketplace. Freightos also showed South Asia rates to Europe up 3% and 5% to the United States; Middle East-Europe rates jumped 8% and China-U.S. rates were up 15%, although the transpacific increase more likely reflects the return of shipping demand following the two-week Lunar New Year holiday in China. 

Airlines are introducing, or considering, war risk surcharges on shipments routed through or near the conflict zone, integrated shipping giant Maersk said in a customer notice. DHL Group said during its earnings call on Wednesday that its forwarding unit could impose emergency surcharges this week.

Airlines are also expected to hike fuel surcharges as the price of jet fuel goes up.  

At a macro level, the war could also slow global economic growth and increase inflation, which could decrease demand for goods shipped by air. 

Crude oil prices are surging, with tanker access through the Strait of Hormuz effectively cut off and Gulf energy facilities being struck by Iranian missiles raising worries of supply shortages. Brent oil, the international benchmark, rose to $88 on Thursday, up from $61 at the end of last year. Some experts are predicting oil prices to reach $100 per barrel or more. Economists say the impact of high oil prices on the economy could be short-lived if the war ends soon.

Global aviation fuel rose 3.6% last week to $99.40 per barrel, while U.S. jet fuel increased from $2.50 to $2.83 per gallon. 

Investment bank Goldman Sachs estimates that each $10 per barrel increase in oil prices would reduce U.S. economic growth this year by about 0.1 points if prices stabilize at a higher level and weigh on households’ disposable income, limiting their spending. Goldman Sachs research finds that a sustained 10% increase in oil prices boosts U.S. headline inflation by 28 basis points (0.28%). If oil prices increase by $10 and remain elevated for three months, inflation would likely rise from 2.4% in January to 3% in May, according to the bank.

The U.S. Supreme Court’s ruling against President Donald Trump’s use of sweeping emergency tariffs was expected to slightly help increase consumption and imports this year, albeit at lower levels than in 2025, but the Middle East conflict is likely to weaken imports more than gain from lower tariffs, said Paul Bingham, director of transportation consulting, economics and country risk at S&P Global Market Intelligence, on the “Freight Buyers’ Club” podcast this week.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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