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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convenient time for a vacation, indeed

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

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

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

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

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

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

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

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

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

How a truck driver gets stopped for inspection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Time to start inspecting in the winter

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

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

FREIGHTWAVES: That makes sense.

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

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

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

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

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

Why the Northeast is quietly running out of diesel

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s a breakdown:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ‘everything shortage’ endures

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

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

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

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

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

Exclusive: Central Freight Lines to shut down after 96 years

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

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

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

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

Kalem agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Watch: Central Freight Lines’ impact on the LTL market

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

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

Central Freight Lines statement

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

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

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

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

Brief history of Central Freight Lines

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

Source: Central Freight Lines

Warehouse cramming is about to begin — Freightonomics

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

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

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

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

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

Seasonality pushing rejections and rates higher ahead of the Fourth

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

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

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

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

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

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

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

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

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

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

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

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

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

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

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

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

Tender rejections: Absolute level and momentum positive for carriers

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

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

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

SONAR: Capacity Trend Market Score (Carriers – VAN)

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

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

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

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

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

Freight rates: Absolute level and momentum positive for carriers

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

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

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

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

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

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

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

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

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

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

SONAR: IJC.USA

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

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

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

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

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

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

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

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

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

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

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

Project44 acquires ClearMetal to strengthen predictive tools

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

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

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

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

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

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

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

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

Click here for more articles by Grace Sharkey.

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Management at fleet payments WEX faces proxy battle

An investment company is seeking to dislodge three directors at WEX, a major payments provider for fleets.

The company, Impactive Capital Master Fund LP and its affiliates, urged “no” votes last year on three candidates. But those directors ultimately won.

This year, Impactive is putting up its own slate of candidates and is targeting three incumbents including current CEO and chairwoman Melissa Smith.

In a proxy filing Friday with the Securities & Exchange Commission, Impactive Capital Master Fund LP and affiliates said it had been “significant stockholders” in WEX (NYSE: WEX) for five years.

WEX, in its 10-K report filed to the Securities and Exchange Commission this year, described its Mobility segment as a “global leader in fleet payment solutions, transaction processing, and information management.”

“We support fleets of all sizes globally through our proprietary closed-loop networks and a suite of software solutions that help manage fuel, EV charging, and operational workflows,” the annual 10-K for 2026 said.

Impactive, in its proxy, said of its relationship with WEX: “For the length of our investment, we have attempted to maintain an open and collaborative relationship with the company and its board of directors, but in recent years that relationship has been severely strained by the mounting challenges facing the Company and the Board’s apparent unwillingness to take action to hold management accountable for performance.”

Five-year shareholders

Impactive first invested in WEX in 2021, according to its proxy.

The Impactive proxy said it has sought to have WEX place more “stockholder perspectives” on the board of directors at WEX. But it has been “repeatedly rebuffed and refused,” the proxy said.

Impactive said its plan of action is to have three directors voted into office at the WEX annual meeting to be held May 5. There are six directors Impactive is not opposing but has urged shareholders not to vote for Nancy Altobello, Stephen Smith and Melissa Smith.

The Impactive proxy recaps a long history of interactions between the company and WEX management. Among the issues Impactive raised in those meetings or phone calls include criticism of WEX’ acquisition of Payzer, which it described as “an unprofitable company with a limited strategic fit that added to WEX’ complexity.”

The history of the interactions include Impactive’s request that a representative of that company be placed on the board of directors, which has not occurred.

Challenge last year failed, but still lots of ‘no’ votes

The three incumbents that Impactive targeted last year for a no vote were re-elected to the board. But the Impactive proxy said their “no” votes were anywhere from 30.6% to 37% of the vote.

The three director nominees Impactive is putting forth this year for the three open slots are Kurt P. Adams, Ellen R. Alemany, and Lauren Taylor Wolfe, who is a co-founder of Impactive.

Taylor Wolfe’s title at Impactive besides co-founder is managing partner. Adams is CEO of IPC Systems and former CEO of Optum Financial. Alemany is the vice chair at First Citizens BancShares and formerly the chair of CIT.

Taylor Wolfe comes in for hefty criticism in the WEX proxy. Among the criticisms: her husband is with a venture capital firm with a large investment in Ramp Business Corp., which also is in the payments business and is viewed by WEX as a competitor, raising conflict of interests questions. She also was described by WEX as “disruptive” as a director at another company.

Performance issues cited

In the proxy, Impactive reviewed WEX’ performance compared to the S&P 400 and what it said was WEX’ closest competitor, Corpay (NYSE: CPAY).

Among the numbers cited are a five-year total return of 20.1% for WEX, 37.6% for Corpay and 56% for the S&P 400.

WEX’ stock price per Barchart is up 27.2% in the last year. But over the last three years, the stock price has largely been lower. It closed Friday at $159.29. In early April 2023, it traded at about $180 per share.

Impactive at one point had more than a 7% share in WEX. However, in its letter to shareholders it said that number is down to 4.9%.

WEX got out in front of the Impactive proxy in its own proxy filed with the SEC earlier this week. In it, the company said “replacing these incumbent directors would jeopardize the Company’s progress.”

It described Impactive’s desires as “financial engineering” – splitting up the Company on the belief that we might achieve a higher blended multiple, buying back stock or increasing our pricing. This stands in sharp contrast to the questions and suggestions we hear from our

other investors, which tend to focus instead on the fundamentals of our business: how can WEX drive further market share, use AI to grow and to expand margins and extend into adjacent end markets?”

Among Impactive’s criticisms of WEX management is the amount of money it paid CEO Smith.

“Since combining the CEO and Chair role under Ms. Smith, WEX directors have rewarded her with $85 million,” the letter said. “WEX’s CEO compensation has consistently increased despite missing targets provided to investors, because the Board has set her compensation targets below the numbers publicly guided to investors and significantly increased the median market capitalization of the comparable proxy peers relative to WEX’s own market capitalization. How can shareholders believe the Board, particularly the Leadership Development and Compensation Committee, will advocate for shareholder interests when they pay management more and more for continuously delivering less and less?”

Melissa Smith, CEO of fleet payments company $WEX saw total comp last year rise to $13.4M from $12.6M. It was $11.7M in '23. Stock last year fell about 14.9%. (Building is HQ in Portland, ME; attended a conference there last year on mobility technology.) https://t.co/MMiDHcZND7 pic.twitter.com/84WS7Zs0rM
— John Kingston (@JohnHKingston) April 7, 2026

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For $3 billion, ocean line expands fleet by 250,000 TEUs

Evergreen Marine has finalized an order for 11 24,000-TEU container ships, a $3 billion contract split between builders in China and South Korea.

The order first announced in 2025 was confirmed in a regulatory filing by Hanwha Ocean of South Korea, according to reports, which will construct six megamax vessels, the largest in operation. It marks the shipyard’s first collaboration with Evergreen, the world’s seventh-largest liner with a 5.7% market share, which currently rosters 12 ultra large container vessels (ULCVs) in its fleet.

Guangzhou Shipyard International of China will construct the remaining five vessels, all of which will be equipped for methanol and diesel (dual fuel) power.

Evergreen (2603.TW) has 59 ships totaling 820,000 TEUs on order, most among major liners.

Despite an oversupply of tonnage amid economic uncertainty that has weakened rates, containership orders among global carriers is approaching 9 million TEUs, or 30% of the existing fleet, according to Lloyd’s List.

Read more articles by Stuart Chirls here.

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Amazon DSPs in NYC fight for survival against ‘no subcontractor’ proposal

New York–The proposed legislation before the New York City Council that would, among other things, likely force the closure of Amazon’s direct service providers (DSPs) in the city with their activities absorbed into Amazon itself was on center stage Thursday at Gotham’s City Hall, the day kicking off with loud demonstrations outside by supporters and opponents.

But inside the city council chambers, a hearing before the Committee on Worker and Consumer Protection, while exhibiting its own fair amount of bombast, could be seen in one 45-minute presentation as moving toward a possible compromise on a bill that can realistically be described as “draconian.”

Testimony kicked off at 10 a.m. It closed around 5 p.m.

But it was the panel discussion midmorning with three borough chamber of commerce presidents–Brooklyn, the Bronx and Manhattan–that turned the conversation from a litany of complaints and accusations about Amazon to a more practical topic: what happens to the workers if the DSPs disappear and their activities are directly performed by the e-commerce giant? (Zach Miller, the vice president of government affairs at the Trucking Association of New York, also was on the panel).

The stakes in New York City can’t be overstated for Amazon (NASDAQ: AMZN). The fundamental business model for Amazon and other companies that make local deliveries, like FedEX (NYSE: FDX), is that much of that task (or in the case of Amazon, all of it), are made by separate, independently-owned companies operating under a contract with the larger entity. The workers are employees of the smaller delivery company, like an Amazon DSP.

The Delivery Protection Act, as it is called, currently has just over 30 co-sponsors in a chamber of 51. The original bill introduced near the end of the session that ended December 31, 2025, had more than 40 co-sponsors. That bill died when the calendar on the year ran out and a new Council was seated, when it was reintroduced.

There are several key provisions in the act that could be the most disruptive to current economic models.

Big changes projected by the law

One is a requirement that delivery companies be licensed by the city, with the license regulated by the city’s Department of Consumer and Worker Protection (DCWP). That department would have the ability to deny or revoke a license to a company based on various standards of conduct, and the law’s backers and their recitation of various Amazon practices make clear that many Amazon policies might put the company in DCWP’s crosshairs.

Another is that the delivery companies, which are defined as those that also operate warehouse facilities, can not contract out their work to a third party. The warehouse is key; a retail store that makes a delivery out of its bricks and mortar operations would not fall under the law.

The entire Amazon DSP model rests on that subcontracting.

Teamsters and sponsor have been out demonstrating already

Most of the discussion on the bill so far has been driven by its supporters. Its sponsor is Council member Tiffany Caban, and the Teamsters is a major backer.

A rally in February on City Hall’s steps was attended by well over 100 Teamsters and DSP workers, as well as Caban. A protest against the closure of some DSPs in Queens in September featured an address by Caban, who discussed her legislation that was introduced soon after.

A similar Teamsters-driven rally was held at a small park in front of City Hall Thursday prior to the hearing. Separately, DSP workers opposing the bill lined up on either side of the park to get into their own rally on the steps of the building, but faced a limitation on attendance at the event that a long-term observer of New York City governance told FreightWaves was rare.

In the chamber itself, the anti-legislation attendance in the audience looked like it had surpassed the number of pro-legislation workers in the room. At the Teamsters rally, their speakers had an explanation for that: the DSP workers were bribed or scared, but no evidence of that was presented.

When the chamber of commerce presidents began their presentation, the subject matter shifted away from anti-Amazon criticism and to a larger question: what happens to the DSPs and their workers if Amazon needs to bring them under its roof in New York City?

(From left to right at the table: Randy Peers, Brooklyn Chamber of Commerce; Jessica Walker, Manhattan Chamber

of Commerce; Lisa Soren, Bronx Chamber of Commerce; Zach Miller, Trucking Association of New York).

Randy Peers, the president of the Brooklyn Chamber of Commerce, didn’t speak first, but his words were the most stark.

“The licensing requirement is a red herring,” Peers said. “This is not about the proliferation of these facilities in our communities, because you can address that through capping them or through proximity laws, like we do with liquor licenses.”

The proposed law, he said, is “all about the direct hire mandate. At the end of the day, this direct hire mandate puts a whole sub sector of our economy out of business. This is a fact.”

Would the rehiring provision stand up in court?

According to the Delivery Protection Act, if a facility operator needs to terminate a subcontractor because of the death of the third-party model, “the facility operator shall offer to rehire those terminated workers as employees, to perform the same work they had previously performed, before offering to hire any other workers as employees. Offers to rehire such terminated workers shall include a preservation of rights, privileges, and benefits under existing collective bargaining or other agreements and terms no lesser than those in effect at the time of the termination.”

Peere said “no court in the United States is going to force a company to hire a particular classification of workers, so I don’t think that holds water.”

“The reality is we’re cutting a full subsector of our economy, of small businesses,” Peers said. “We’re shutting them down.”

It was that point that seemed to get the attention of the Council committee members, most of whom had spoken positively of the legislation earlier.

Council member Chris Bass, who in earlier comments had roundly criticized Amazon, softened his tone during question and answers with the chamber of commerce representatives.

Banks said he wanted to “get to the middle.” “I don’t want to completely annihilate small business owners who I know very well, who have stabilized some of our local communities or local hiring,” Banks said. “At the same time there is a need for worker protection, and I think that’s the middle where we come to. So can you give or suggest some improvements to the bill where we can get to a middle point?”

Peers said the elimination of the direct hire requirement was “first and foremost.” (However, the bill’s backers might argue that move would thoroughly undermine their goal.)

Babies and bathwater

Council member Shirley Aldebol said she didn’t want to “throw away the baby with the bath water,” and asked whether there were less drastic steps that could be taken to promote various other goals like worker safety.

Aldebol conceded that a closing of a DSP in the South Bronx, with 100 to 125 employees, means “you’re losing a huge amount of people.”

Committee chair Harvey Epstein noted, however, that closing the DSPs does not eliminate the need to deliver the packages.

There was discussion of other steps that the city could take to benefit delivery drivers. For example, a city-wide training regime was mentioned.

Jessica Walker, president of the Manhattan Chamber of Commerce, fired off several suggestions including regulating worker quotas, as protesters at pro-legislation rallies have often cited the number of deliveries a DSP worker must make in a given shift as being unrealistic. (The specter of a driver being required to urinate into a plastic jug was brought up, an activity that long-distance truck drivers know all too well.)

“None of these would require decimating the business,” Walker said.

The human aspect of the bill extends beyond the drivers, as some testimony made clear.

Owner’s view is heard

Mark Facchin is a DSP owner who testified before the Council. “Owning and running a logistics company requires a lot of up front capital and access to lines of credit to make sure we keep our fleet of trucks current, safe and mechanically sound,” he said in his testimony.

Facchin said he and other DSP owners are largely in the same financial situation. “A lot of us have personal guarantees to the Small Business Administration for loans we took to start our businesses and Economic Injury Disaster Loan (EIDL) loans we took during COVID to keep our businesses afloat, bank loans and lines of credit and credit card balances to make sure our operating bills are paid,” he said. “What the City Council is proposing is to make a draconian law that will force my legal entity to be shut down.”

And where was Amazon in the hearing?

The day before the event, it released testimony it submitted to the committee.

It touched on several issues, but one key area was its response to suggestions–amplified by testimony at the hearing by representatives from the city’s comptroller office–that Amazon’s operations were a safety risk.

The Amazon statement said that was a “misconception.”

“The safety of our employees, partners, and the communities we operate in is our top priority,” the Amazon testimony said. “Since 2019, we’ve demonstrated consistent and significant safety improvement at our facilities, with our Recordable Incident Rate improving by 43% and our Lost Time Incident Rate improving by 70% across our global operations.”

The testimony also put an estimate that Amazon “supports more than 25,000 full- and part-time employees in New York City, more than 2,000 of whom work at our local delivery facilities that operate in all five boroughs.”

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Amazon to scale up drone delivery in 2025, CEO says

An Amazon worker loads a package into a light blue Prime Air delivery drone.

Amazon will significantly ramp up Prime Air drone capacity this year as part of a multi-pronged initiative to move beyond same-day delivery and deliver e-commerce orders within hours, or even minutes, CEO Andy Jassy said in an annual letter to shareholders on Thursday.

Speed is the driving force for Amazon’s (NASDAQ: AMZN) logistics operation because management says customers are more likely to complete online orders when faster delivery is promised. At the same time, there is a counter movement in retail away from ultra-fast delivery based on concerns about the unsustainable cost of service and whether consumers really expect quick fulfillment turnaround.

Jassy said Prime Air service will be able to serve communities with 30 million customers by the end of the year, with a much wider catalog of goods to choose from, and is expected to annually deliver 500 million packages by the end of the decade in under 30 minutes. The ability to scale up drone deliveries is possible now because of more than 85 same-day fulfillment centers that carry Amazon’s top 90,000 products and serve as launch pads for the autonomous delivery vehicles.

The more streamlined fulfillment centers have already enabled Amazon to deliver more than 500 million same-day packages in 2026 so far, according to the CEO.

Amazon is scheduled to begin serving customers in the south Chicago suburbs out of two fulfillment centers by late spring or early summer. Each site will have 12 to 20 drones. Prime Air’s flagship MK30 drone weighs 83 pounds and can carry items weighing up to 5 pounds. The drones cruise at about 73 mph and 200 to 300 feet high. Six vertical propellers provide lift, with staggered tandem wings supporting cruise flight. They can fly in light precipitation and winds faster than 20 mph. Parcels are stored in a shoebox-sized fuselage and dropped to the ground from about 13 feet up.

Prime Air in recent months has launched in parts of Kansas City, Kansas; San Antonio and Waco, Texas; the suburbs of Detroit, Dallas-Fort Worth; Tampa, Florida; and Tolleson, Arizona, west of Phoenix.

Ultra-fast delivery

Amazon will continue to focus on ultra-fast ground delivery within 20 minutes, which it is testing in India and the United Arab Emirates. The service, called Amazon Now, is also available in parts of Seattle and Philadelphia, and is expanding to Europe. It leverages strategically located, urban micro-fulfillment centers where on-demand workers pick up packaged groceries and household items and deliver them. In India, where Amazon has more than 360 micro-fulfillment centers (and more on the way), Amazon Now orders are increasing 25% month-over-month, with Prime members tripling their shopping frequency once they start using it, Jassy said.

Prime Air will deliver a much larger selection of items than Amazon Now, which is limited to several thousand products.

Jassy said fulfillment centers are able to rapidly churn out orders because of extensive deployment of more than 1 million robots that help stow, pick, sort and transport merchandise within facilities.

Meanwhile, Amazon is aggressively expanding its delivery network into rural areas under a $4 billion investment campaign initiated last year. The average number of monthly same-day customers in rural areas has nearly doubled in 2025 compared to the prior year. Once the expansion is complete, Amazon will be able to deliver more than 1 billion more packages each year to customers in more than 13,000 zip codes across the nation, the CEO said.

Amazon opened two small fulfillment centers in West Virginia to improve delivery times across the state, Gov. Patrick Morrisey announced on April 1. It is also opening a new facility in Reno, Nevada.

The push into rural areas is one of the key reasons behind Amazon’s decision to reduce by 20% the amount of parcels tendered to the U.S. Postal Service under a new contract agreement reached this week, according to industry analysts. Once Amazon has built out its rural delivery infrastructure there will be little need to use the Postal Service for last-mile delivery.

“Ultra-fast delivery is the new table stakes. Amazon running three parallel speed programs simultaneously means the delivery expectation floor is dropping. If you operate in grocery, pharmacy, convenience, or everyday essentials, the competitive benchmark will move from same-day to sub-hour within three years in major metros,” said Nikhil Varshney, a Wayfair supply chain manager who writes a Substack newsletter called the “Silk Road Nexus.”

Is fast shipping critical?

And yet, as the Wall Street Journal recently reported, a growing number of online retailers are increasingly reluctant to absorb the cost of fast shipping as delivery prices have risen. Many offer “no rush” shipping options that can take several days after realizing that not all customers are looking for fast delivery. And, it turns out, customers who wait are less likely to return purchases.

Same-day delivery economics typically operate at 15% to 30% lower margins than standard two-day shipping due to route density inefficiencies, higher labor costs per package, and reduced vehicle utilization rates, said Aalok Rathod, a former Amazon Web Services financial analyst, on LinkedIn.

“Amazon trained an entire generation to believe that instant gratification should cost $0. Now every retailer is trapped in a prisoner’s dilemma where not offering same-day delivery means losing customers, but offering it means destroying your contribution margin,” he wrote.

Satish Jindel, a veteran parcel shipping consultant and president of ShipMatrix Inc., said more than 90% of customers don’t need their package on the day it is scheduled for delivery.

“People have this addiction to their cell phone, they flipping around, being bombarded with advertising, can’t resist a buy, and then it sits around at the front door. They didn’t need it , they didn’t need it on that day. That’s why returns are so high,” he said in an interview. “If something is urgent, people will go to the store or pay for same-day delivery.”

“This is what I call Amazon’s Trojan Horse. They’ve got Americans believing they need it and on the same day. The only thing you need the same day is food” or something like an emergency gift, he said. “If fast delivery is offered for free without a premium price, it will be viewed as table stakes for e-commerce retailers and everyone will be offering it without having the favorable economics of Amazon.”

(Correction: An earlier version of this story incorrectly stated that local fulfillment centers enabled 500 million same-day deliveries by Amazon Prime Air this year. They have made it possible for Amazon Logistics to make that many same-day deliveries, by van and drone.)

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

Amazon takes delivery convenience to next level

Amazon overtakes US Postal Service as largest parcel carrier

How DHL tackled mail and parcel boom during peak Easter season

Jaxport adds new direct China connection

Score another win for a U.S. East Coast port opening a new direct connection to Asia.

CMA CGM and its partners in the Ocean Alliance have added a direct container service from China and Asia markets to the Port of Jacksonville, Fla.

Operated on a weekly basis, the Chesapeake Bay Express (CBX) is jointly provided by CMA CGM of France, China’s Cosco (1919.HK) and subsidiary OOCL, and Evergreen Marine (2603.TW) of Taiwan.

The inaugural sailing will arrive at Jaxport in June, the port said in an announcement.

The CBX port rotation includes Vung Tau, Vietnam; Yantian and Shanghai in China; Busan, South Korea; Kobe, Japan; transit of the Panama Canal; Norfolk; Charleston; Savannah; and Jacksonville on the U.S. East Coast; and a return to Vung Tau.

Located near Ho Chi Minh City in the busiest Cai Mep–Thi Vai Port Cluster, Vung Tau handled about 152 million metric tonnes of cargo in 2024, or roughly 34% of Vietnam’s total container volume. It is one of the few Vietnamese ports that can handle very large vessels, including ships up 14,000 TEUs or larger, which makes it strategically important for direct long-haul trade.

At Jaxport, SSA Marine will provide stevedoring services at the newly modernized SSA Jacksonville Container Terminal at Blount Island Marine Terminal.

“The addition of the Ocean Alliance further strengthens Jacksonville’s position as a strategic gateway for global trade,” said Jaxport Chief Executive Eric Green, in a statement. “This service expands routing flexibility between the southeast United States and key Asian markets and underscores how our continued infrastructure investments are delivering efficient, reliable service for global carriers.”

As the final U.S. port of call on CBX, and the busiest Florida port by volume, Jaxport will be a key center for equipment repositioning and expedited transit for U.S. export cargoes.

A project to increase the air draft at the Blount Island terminal to 205 feet remains on schedule for completion by the end of 2026.

Read more articles by Stuart Chirls here.

Related coverage:

Biggest US port getting a big check for fix-ups

Ocean rates rise as Hormuz makes fuel top concern

New tolls could add $1 a barrel to Hormuz oil

Trump budget boosts military shipbuilding spending by 242% to $65.8 billion

Meet the product managers leading project44’s AI push

At Decision44, project44’s customer event, the company showcased its new AI agents that promise to collapse the Truth-Decision-Action sequence that contributes so much to lagging and reactive supply chain and logistics operations into a singularity. Product managers spoke about the agents they were building and where they sat in the shipment lifecycle.

While the whole team includes Lauren Fitzpatrick, Ellie Crist, Aaron Kestenbaum and others, I spoke to three key product managers deep in the trenches of project44’s AI blitz.

(Nimrit Vest. Photo: JP Hampstead / FreightWaves)

Nimrit Vest: Building the AI supply chain analyst ‘Mo’

Nimrit Vest, Staff Product Manager at project44 in her fourth year with the company, previously spent four years at Flexport in operations and customer solutions. Vest is responsible for project44’s supply chain analyst chatbot Mo. When you ask Mo questions, he isn’t just scraping the web; he’s sifting through your company’s own supply chain data for the answer.

The chatbot is still in preproduction. A key ‘gold standard’ use case for Vest’s team was the ability to answer complex chargeback questions for shippers delivering to big box retailers— figuring out exactly where delays happened (origin, transit, or dwell at destination) and who was responsible (shipper, carrier, receiver), something that previously took analysts a long time. Vest’s team has also been researching off-platform data analysis to better understand customer needs.

Vest said that she manages three senior engineers who are focused on the architecture, who are themselves supervising numerous 24/7 coding agents.

The only reason project44 was able to start on a project like ‘Mo’ was because of the data normalization happening behind the scenes, Vest said, explaining how project44’s early agents worked on data quality, making inquiries to fill gaps in information about carriers and shipments.

Vest described layers of skills built into Mo: how it understands p44 data and what fields mean, giving it the ability to reason more than an out-of-the-box LLM. Then there are customizations that customers add to the platform, or what project44 calls ‘the context module,’ which includes SOPs and other business rules.

One approach is turning large text files or SOPs from Confluence into “skill files.” The context modules have to be thoughtfully chosen and attached to specific workflows and processes due to the limits of LLM context windows.

Vest said that project44 strongly encourages teams to try new tools and bring insights back. That’s led to rapid adoption of AI coding tools. “The line between what an engineer and a PM can do has blurred extremely fast,” Vest noted. PMs can now write a skill file in Claude, pull from GitHub and ask AI what the engineers did that day.

(Ilias Pagonis. Photo: JP Hampstead / FreightWaves)

Ilias Pagonis: Leading the intelligent TMS product suite

Ilias Pagonis, Senior Staff Product Manager with four years at project44 and previously in supply chain at Nike for four years, is based in Amsterdam. He leads the Intelligent TMS product suite and manages the interoperability domain, building integrations with any system of record. His dev team is mostly in Bangalore, with a product designer in Amsterdam working alongside him.

“AI has completely transformed the speed at which we get to a prototype,” Pagonis said. Gone are the days of only heavy research and lengthy product requirement documents (PRDs). Now, after customer interviews, teams can ingest transcripts and automatically create a PRD that references the conversations.

“Something that took weeks takes days if not hours,” Pagonis said. They quickly get prototypes in front of customers for feedback and iterate rapidly. About 65% of code is initially drafted by AI, with up to 90% on the front end.

Pagonis reminded me that project44 started in 2014 as a one-to-many API integrations partner focused on visibility, then expanded into different modes and packaged functionality into a full TMS with order consolidation, shipment building, freight audit and full lifecycle coverage. To some extent, Pagonis said, Intelligent TMS just bundles many of the capabilities project44 already had, filled in some gaps in the shipment cycle like payment and invoice, and called it what it is: a TMS.

Building an agent requires breaking down the total work into small ‘jobs to be done’ modules. “Procurement has 6 or 7 micro agents,” Pagonis explained. “You have to break everything down to its atomic parts.” Reducing the tasks to their component parts and simplifying the prompts was necessary for driving hallucination out of the system.

For freight procurement, users set their own criteria — for example, automatically extending an expiring contract with a high-performing carrier, but throttling the introduction of brand-new carriers. “We try to set that throttle on a use case by use case basis to make sure the customers trust the agentic solutions we’re building.”

Pagonis stressed that modularity was key for the Intelligent TMS; it’s not all-or-nothing and it doesn’t require replacing an existing TMS. It’s more an intelligence layer that sits on top.

“We meet the customers where they are,” Pagonis said. “The world today needs a different TMS that is dynamically adaptive and not locked into deterministic workflows.”

(Nick Ruggiero. Photo: JP Hampstead / FreightWaves)

Nick Ruggiero: Driving Autopilot for workflow automation

Nick Ruggiero, Director of Product Management who joined project44 back in 2018, is building Autopilot, which automates workflows for customers with an AI agent.

The goal was to deploy agents in a way that helps customers gain trust. “There’s a lot of fear in the industry, a lot of hesitation to get started with AI. This helps them gain trust, because we’re automating processes they’re running on our data already,” Ruggiero noted. They started with AI agents for data quality — a low-risk early adoption point that also addresses gaps in missing visibility data.

They developed a workflow canvas where everything is auditable. “Agents collaborate with humans in the same way that humans collaborate with humans.” Customers can configure steps for what happens after an agent completes its jobs, building comfort with the technology through existing TMS integrations, with nothing new required to get started.

Some customers have engaged carriers for operational workflows, starting with data quality and moving to in-transit exceptions. For example, rebooking a container headed to a transshipment port if the ETA risks missing the next vessel departure is more proactive than reactive.

“We’ve had customers deploy those scenarios with certain carriers, regions, lanes, and they can bring their carrier along,” Ruggiero said.

Ruggiero mentioned that in the morning, project44 CEO Jett McCandless had discussed a framework of signal, trigger, action.

“We’ve always been getting signals and developing triggers,” Ruggiero said, “but the difference is in the action—we’re now bringing those actions back into the platform.” Ruggiero observed that customers are often overwhelmed by exceptions and end up being reactive. By automating processes that had once required tedious off-platform analysis, Autopilot could drastically speed up exception management and allow supply chain operators the space to start thinking strategically again.

While building agents involves traditional software development lifecycle steps like starting small, getting feedback and iterating, the process now includes prompt engineers. But “very little vibe-coded software is production-ready” Ruggiero reminded me. “Writing the code is much faster, but the question of WHAT to build is still the most important part.”

The Decision44 agenda went deep on product development, with mid-level product managers demonstrating their live and upcoming releases. project44 is clearly positioning itself at the forefront of agentic supply chain technology. From intelligent chatbots and modular TMS agents to auditable workflow automation, the company is moving the supply chain from reactive visibility to proactive, trust-building decision-making and execution, all built on the foundation of normalized data and customer-configurable intelligence.

Fuel shock, Middle East turmoil push global freight rates higher

Global freight markets are being reshaped by surging fuel costs and ongoing disruption in the Middle East, even as underlying demand remains relatively soft, according to Flexport’s latest Freight Market Update webinar on April 9.

Executives said both ocean and air freight are entering Q2 with a widening disconnect between demand and pricing — with rates climbing largely due to cost pressures rather than cargo volumes.

Fuel — not demand — is once again the primary driver of freight pricing. For carriers, that means margin protection through surcharges. For shippers, it means higher costs and volatility even in a soft market environment.

Flexport, founded in 2013 by Ryan Petersen and based in San Francisco, provides global logistics solutions.

Ocean: Calm volumes, rising costs

Flexport officials said trans-Pacific eastbound (TPEB) ocean conditions are “relatively calm,” with stable capacity and muted seasonal demand typical for April.

“On the TPEB side, things are actually relatively calm,” said Kyle Beaulieu, senior director and head of ocean Americas at Flexport. “Supply is relatively stable.”

However, that stability masks a key shift: rates are rising despite weak demand.

Capacity remains “healthy” and largely in line with Q4 levels
Blank sailings have increased, driven by higher fuel costs and low demand
Carriers are rolling out emergency bunker surcharges (EBS) globally
U.S. trades are seeing surcharge implementation in April

“Demand is relatively muted in April … but the fuel costs are impacting decisions on supply and impacting freight rates,” Beaulieu said.

Fuel-related cost increases — tied to disruption in the Persian Gulf — are pushing carriers to raise all-in rates, even without strong volume growth.

Operations: Local congestion, global ripple effects

Port operations remain mostly stable in North America, with a few exceptions.

“Overall, actually, in North America, it’s pretty quiet,” said Nathan Strang, director of ocean freight at Flexport.

Savannah remains a pressure point, with vessel queues causing delays.

“They’re seeing about six vessel waits on average, or about two-day delay,” Strang said, noting weather and navigation constraints as key factors.

Globally, congestion persists in parts of Europe and Asia, while disruptions tied to the Middle East continue to ripple through supply chains.

~130 container ships remain stuck or delayed in the Persian Gulf region
Carriers are avoiding the region despite a ceasefire announcement
Cargo is increasingly being rerouted via land bridges out of UAE hubs

“We’ve also seen about five container ships leave the Gulf in recent days. So that’s a good sign,” Strang said, adding that most carriers are still waiting for safe transit conditions.

Air freight: Severe disruption, surging rates

Air cargo markets remain under significant stress, with Flexport calling disruption widespread.

“In air freight, we’re still seeing major disruption in the market due to the situation in the Middle East,” said David Grinevald, regional director for air freight at Flexport.

Key pressure points include:

Multiple airspace closures across the Middle East
Reduced capacity at major hubs like Dubai and Doha
Global widebody capacity down 11% vs. pre-Lunar New Year levels

“The fact that airlines have to reroute around those airspaces is, of course, creating major capacity issues,” Grinevald said.

Fuel driving the market

Jet fuel prices have become the dominant force across air cargo.

“Jet fuel has effectively doubled year over year, about plus 78% since the beginning of the crisis,” Grinevald said.

Carriers are responding with aggressive surcharges and operational adjustments.

“What they’re doing is that they’re immediately applying those fuel surcharges to the shippers,” he said.

Longer routing is also reducing payload capacity, further tightening supply and increasing the risk of shipment rollovers.

Rates vs. demand: A growing disconnect

Flexport highlighted a structural shift in global freight markets, where cost pressures — not demand — are driving pricing.

Ocean markets are seeing rate increases tied to fuel and carrier cost management, while air cargo is experiencing both capacity constraints and cost inflation.

“The big thing is not so much capacity right now as it is the price of fuel,” Grinevald said.

Looking ahead, Flexport executives expect:

Elevated fuel surcharges to persist through Q2
Continued volatility tied to Middle East developments
Limited relief from seasonal capacity increases in air freight
Stable but cost-inflated ocean markets

EV Realty opens major truck charging hub in San Bernardino

Aerial view of EV Realty’s new multi-fleet truck charging hub in San Bernardino showing rows of high-power charging ports and parked electric trucks on opening day

EV Realty opened its flagship multi-fleet truck charging hub in San Bernardino on Thursday, bringing 76 high-power charging ports and 9.9 MW of grid capacity online in one of the nation’s busiest freight corridors.

Carriers in the Inland Empire have struggled for years to find infrastructure capable of supporting commercial electrification at scale. This facility is built to change that. It can serve more than 200 medium- and heavy-duty trucks daily under EV Realty’s Powered Properties model, which aggregates multiple fleets onto shared charging infrastructure rather than forcing each carrier to build and maintain its own dedicated depot.

J.B. Hunt Transport Inc., Gate City Beverage (part of Harbor Distributing, a Reyes Holdings company) and fully electric carrier Nevoya have signed on as initial customers.

The site sits near the San Bernardino Intermodal Facility, amid more than 60 million square feet of industrial warehouse space and close to Interstate 10 and Interstate 215 — a critical artery for freight moving out of the Ports of Los Angeles and Long Beach. The region is home to nearly 17,000 medium- and heavy-duty trucks.

“The Inland Empire is where freight from the Ports of Los Angeles and Long Beach gets sorted and sent across the country by truck and rail,” said EV Realty CEO Patrick Sullivan. “Fleets operating here are doing some of the most demanding work in the supply chain. They need reliable, affordable access to high-power charging so they can move beyond pilots and make electrification a real business decision. That’s exactly what we built here.”

The hub deploys Kempower charging hardware, offering up to 1.2 MW for Megawatt Charging System ports designed for next-generation Class 8 tractors and up to 500 kW for Combined Charging System ports standard on current electric trucks. Spring-assisted cables address driver ergonomics. Fleet management software from Synop delivers power management, reservations, reporting and insights on cost, range and efficiency. The site operates 24/7 with on-site staff, security, parking and driver amenities.

By pooling fleets onto shared infrastructure, the Powered Properties approach tackles one of the biggest barriers to commercial EV adoption: the capital cost and operational complexity of building dedicated charging depots.

“EV Realty has been a great partner for us,” said Nevoya Chief Commercial Officer John Verdon. “Their unique design and business model allow carriers like us to optimize operations with cost-effective charging and logistics solutions. The opening of this site provides valuable operational flexibility with both megawatt charging and vehicle domicile options that work well for our needs.”

The San Bernardino hub opened just months after groundbreaking in mid-2025. EV Realty compressed construction timelines thanks to available grid power from Southern California Edison and project partners including ParWest. Grants from the South Coast Air Quality Management District’s Carl Moyer Program and the California Energy Commission’s EnergIIZE Commercial Vehicles Project helped support the build.

The opening marks the latest milestone in EV Realty’s growth, which includes $75 million in growth equity from NGP and additional investment from truck terminal operator Outpost.

Troubled Postal Service moves to raise stamp prices, conserve cash

A U.S. Postal Service van parked in front of a strip mall store, rear first, on a sunny day. Side view.

The U.S. Postal Service plans to raise the price of mail and package services by 4.8% this summer, with a First-Class Forever stamp rising from 78 cents to 82 cents, as part of a broad effort to stem billions of dollars in annual losses.

The national post on Thursday also announced its intent to temporarily suspend employer retirement contributions to the Federal Employees Retirement System to conserve cash and maintain liquidity. The USPS previously suspended pension payments in 2011 during another period of financial stress. That suspension lasted several months, and the USPS later resumed the regular biweekly payments and remitted the withheld amounts.

The national carrier filed notice on Thursday with the Postal Regulatory Commission for the price increases, which are scheduled to take effect on July 12 pending the PRC’s review. The oversight body last week granted approval for the U.S. Postal Serviceto proceed with a temporary 8% surcharge to cover the escalating cost of transportation, especially fuel.

Under the recommended price changes, the additional-ounce price for single-piece letters will remain at 29 cents. The Postal Service is also seeking price adjustments for other First-Class Mail products, periodicals, marketing mail, package services and selected special services products.

At a congressional hearing last month, Postmaster General David Steiner warned the Postal Service could run out of cash in a year unless lawmakers addressed structural policies that impose heavy costs on the agency. He also reiterated the need for continued improvements in operational efficiency and revenue generation, saying he wanted to raise the stamp price to 95 cents.

The USPS had a net loss of $9.5 billion in fiscal year 2025.

“In the midst of the severe financial crisis facing the Postal Service and continued rising operational costs, the Postal Service is using all available tools, including available regulatory pricing authority, to ensure we can continue to fulfill our universal service obligation and serve the American public,” the agency said in a statement. The agency is self funded and doesn’t receive tax dollars for support.

Keep US Posted, an advocacy group of consumers, nonprofits, newspapers, greeting card publishers, magazines and catalogs, complained in a letter to a House subcommittee earlier this week that postal rates are already too high.

“The Postal Service does not have a revenue problem; it has a cost control problem,” wrote Executive Director Kevin Yoder. “Stamp prices have climbed 44% over the past 15 years, and rates for other mail products have risen even more. Yet despite these repeated increases, USPS has still lost more than $25 billion since [former] Postmaster General DeJoy launched the 2021 Delivering for America plan — even after Congress provided $10 billion under the 2021 CARES Act and eliminated $120 billion in liabilities under the Postal Service Reform Act of 2022.” The organization is calling on Congress to limit USPS rate hikes to once per year and cap them to the rise of the Consumer Price Index.

Chief Financial Officer Luke Grossman said current and future retirees will not be impacted if normal retirement cost payments are temporarily withheld.

“The risk to the Postal Service and the American public from insufficient liquidity for postal operations dramatically outweighs any longer-term risk to the pension funds from not making the currently due payments. We will continue to transmit to employees’ contributions to FERS and will also continue to transmit employer automatic and matching contributions and employee contributions to the Thrift Savings Plan. It must be noted that our pension systems remain much better funded than other agencies,” he said in a statement posted on the agency’s in-house news site.

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

Contact: ekulisch@freightwaves.com.

Amazon signs new delivery deal with Amazon for 20% less volume

Postal Service can proceed with 8% parcel surcharge, regulator says

US Postal Service on brink of collapse, chief tells Congress

Three Strategies for Closing Fleet Risk Blind Spots

Fleet operators tend to think of risk in terms of isolated events, such as a crash, a failed inspection, or a compliance lapse. But according to Bob O’Connell, Account Executive of Strategic Accounts at J.J. Keller & Associates, that way of thinking is itself the biggest blind spot in the industry.

“A lot of carriers, big and small, believe that their risk is based on isolated incidents,” O’Connell said in a recent appearance on FreightWaves’ What the Truck?!? with host Malcolm Harris. “That’s really not the case. You’re being judged on all of it, the consistency of your entire operation.”

The distinction matters because regulators and plaintiff attorneys alike are looking at patterns, not snapshots. A fleet that performs well on one audit but lacks the operational discipline to sustain that performance over time is exposed in ways its leadership may not fully appreciate until it’s too late.

O’Connell laid out a three-part framework for how fleets of any size can close their risk gaps and move from reactive to proactive postures: operate as though a merger or acquisition is imminent, build genuine regulatory expertise internally, and maintain litigation-ready records at all times.

Run your fleet like someone’s about to buy it

The first strategy O’Connell outlined may sound like it belongs in a boardroom rather than a dispatch office, but the logic is straightforward. A fleet that’s always ready for due diligence is a fleet that’s always ready for scrutiny from any direction, whether that’s an insurance carrier, a federal auditor, or a plaintiff’s legal team.

“A merger and acquisition forces discipline, not only on the financial side, but through the entire operational side,” O’Connell said. “If you’re taking a look at it from that viewpoint, what you’re going to see is that if you’re always ready for a merger and acquisition, you’re always going to be ready for somebody to come in and pull the covers back on your entire operation.”

That readiness, O’Connell argues, has compounding benefits. Fleets that maintain tight operational visibility are better positioned to push back on insurance rate increases, respond to audits with confidence, and demonstrate to outside parties that they’re running a disciplined shop.

“If you’re ready for somebody to be viewing your organization in a very detailed format, you’re ready for a lot of things,” he said. That includes showing your insurance provider how well you perform to get lower rates.

The same principle applies when litigation enters the picture. A fleet with a merger-ready posture already has its documentation organized, its compliance records accessible, and its operational narrative coherent.

Regulatory expertise can’t live in one person’s head

The second pillar of O’Connell’s framework centers on regulatory knowledge, and specifically on why fleets can’t afford to treat compliance as a static competency that lives with a single internal hire.

The Federal Motor Carrier Safety Regulations (FMCSRs) are constantly evolving. The pipeline of changes (from the congressional record to the federal register to state and municipal rulemaking) is broader than most fleet operators realize.

O’Connell says that outside compliance partners exist precisely because no single internal team can track the full scope of regulatory change in real time. “You would have to have a fleet of people to manage that,” he said. “Why not turn that over to a specialist that does nothing else every single day?”

But outside expertise alone isn’t sufficient. The real value comes from pairing external regulatory intelligence with internal operational knowledge.

“It’s not just the regulations,” O’Connell said. “It’s how those regulations affect your organization, because regulations aren’t really one size fits all. You have to be able to look at the regulatory expertise, make sure you understand those regulations, and make sure you’re being notified of when they’re changing and how they’re changing.”

Cookie-cutter compliance strategies fail because operations can be very diverse from one fleet to the next. The regulatory burden looks different depending on whether a carrier is running small-cap package delivery, waste haul operations, or long-haul linehaul, and each type requires its own operational interpretation of the same regulatory landscape.

“You have to have bench strength so that your inside person understands the operation,” O’Connell said. “All of your competitors have to comply with the same regulatory landscape.”

J.J. Keller’s Certified Transportation Regulatory Expert (CTRE) Program bridges the gap between regulatory knowledge and operational application so a fleet’s internal staff can fully understand the FMCSRs and comply with them more effectively.

If it’s not written down, it doesn’t exist

Litigation-ready record keeping may be the most immediately actionable of O’Connell’s strategies, and it’s where the consequences of failure are most visible.

Both regulators and plaintiff attorneys evaluate fleets holistically, not on the merits of a single event. When records are organized, accessible, and comprehensive, it fundamentally shifts the dynamic of any legal or regulatory engagement.

“What better way to demonstrate, not only to a regulatory official, but also a plaintiff attorney, that you have everything wrapped up pretty tight?” O’Connell asked. “It’s great to be able to demonstrate that your records are easily accessible and easily produced for any regulatory agency or a plaintiff attorney. That immediately changes the tone of the whole conversation.”

The inverse is equally true. When records are disorganized, incomplete, or difficult to produce under pressure, it invites deeper scrutiny and raises the risk of any enforcement action or lawsuit.

“If it’s not written down or you can’t produce it, it doesn’t exist,” O’Connell tells clients.

Spoliation, the obligation to preserve records once litigation is reasonably anticipated, is a practical example of why record-keeping discipline can’t be built after the fact.

“If you are going to get into litigation or you believe that you could be getting into litigation based upon an incident, you have a legal responsibility to start gathering all of those records and to not destroy any of those records,” O’Connell said.

Build the system before you need it

If there is any single change in thinking that would make the biggest difference for fleet leaders, O’Connell says, it’s a change in posture.

“The safest, most resilient fleets that I’ve come across in my thirty-seven year career don’t react to enforcement,” O’Connell said. “They build defensible systems right into their operations all the time so that when somebody comes knocking, whether that be an enforcement official, whether that be a plaintiff attorney, they’re ready to go.”

That readiness, he argues, is also a competitive advantage.

“You can’t control a lot of the things that are going on in your fleet on the road every single day, but you can control the systems that you have there.”

The time to build those systems is before they’re tested, not during a crisis.

“You don’t want on-the-job training when it comes to this kind of stuff,” he said. “Make sure that your systems are already up to speed and you’re ready to go before something happens.”

To learn more about J.J. Keller & Associates, click here.