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

truck fallen over

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convenient time for a vacation, indeed

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

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

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

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

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

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

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

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

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

How a truck driver gets stopped for inspection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Time to start inspecting in the winter

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

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

FREIGHTWAVES: That makes sense.

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

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

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

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

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

Why the Northeast is quietly running out of diesel

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

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

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

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

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

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

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

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

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

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

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

Here’s a breakdown:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ‘everything shortage’ endures

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

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

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

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

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

Exclusive: Central Freight Lines to shut down after 96 years

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


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

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

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

Kalem agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


Watch: Central Freight Lines’ impact on the LTL market


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

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


Central Freight Lines statement

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

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

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

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


Brief history of Central Freight Lines

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

Warehouse cramming is about to begin — Freightonomics

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

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

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

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

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

Seasonality pushing rejections and rates higher ahead of the Fourth

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

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

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

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

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

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

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

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

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

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

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

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

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

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

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

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

Tender rejections: Absolute level and momentum positive for carriers

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

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

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

SONAR: Capacity Trend Market Score (Carriers – VAN)

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

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

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

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

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

Freight rates: Absolute level and momentum positive for carriers

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

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

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

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

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

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

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

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

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

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

SONAR: IJC.USA

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

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

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

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

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

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

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

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

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

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

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

Project44 acquires ClearMetal to strengthen predictive tools

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

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

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

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

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

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

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

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

Click here for more articles by Grace Sharkey.

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Descartes reports another record-breaking quarter

an ocean container being loaded on a sleeper cab at a port

Descartes Systems Group again reported record quarterly results as it continues to see “good demand” amid a global trade landscape that remains in flux.

Descartes (NASDAQ: DSGX) reported consolidated revenue of $201 million for its fiscal quarter ended July 31, a 12% year-over-year increase and 1% ahead of the consensus estimate. Services revenue was up 13% y/y to $189 million (organic growth in services revenue was approximately 9%, excluding foreign exchange fluctuations).

Earnings per share of 57 cents for the quarter came in 14 cents higher y/y and a penny ahead of Seeking Alpha’s unadjusted EPS estimate.

Descartes reported adjusted EBITDA of $94.4 million in the period, which was 18% higher y/y. It recorded an adjusted EBITDA margin of 46.9%, which was up 230 basis points y/y.

“Today’s supply chains and logistics operations need to be agile in the face of an increasingly dynamic global trade environment,” said CEO Ed Ryan. “Having a broad scope of solutions on our Global Logistics Network is imperative to help isolate our customers from complexity, bringing together the data and domain expertise required to efficiently manage the lifecycle of shipments.”

Table: Descartes’ key performance indicators

The company generated $81 million in cash flow from operations in the period, a 28% y/y increase.

It ended the quarter with $401 million in cash, up $24 million from the prior quarter. It has no debt and an untapped $350 million line of credit. It has used approximately $220 million in cash to fund two acquisitions since the quarter closed.

Descartes acquired Extensiv, a warehouse management and fulfillment tech provider, for $120 million last week. It acquired Tai, a TMS provider to freight brokers, for $100 million at the end of August.

Descartes implemented a share repurchase plan at the end of 2025 to buy back up to 10% of its public float (8.6 million shares). It repurchased 651,800 shares for $45.1 million in the first half of its current fiscal year.

It will continue to use cash to fund future acquisitions. Management said on a Thursday evening call that it would take on leverage, up to 3 times annual EBITDA, to accomplish a larger deal.

Shares of DSGX were up 1.7% in after-hours trading on Thursday.

Why it matters? Descartes’ strong financial performance and strategic acquisitions of transportation tech providers highlight the industry’s shift toward unified, agile logistics ecosystems. Its expanded network capabilities help supply chain professionals navigate ongoing global trade complexity and operational volatility.

More FreightWaves articles by Todd Maiden:

El Niño Winter Forecast: Freight Risks Fleets Can’t Ignore

El Niño winter forecast for freight: warmer doesn’t mean safer for fleets. DTN’s Ben Hershey breaks down what carriers should actually watch this winter: major snow events still possible, wetter western mountain routes, and why AI-driven crash risk forecasting is becoming an operational tool instead of just another weather map. If you move freight, this is the planning window that matters. #FreightWeather #ElNino #TruckingSafety

The strongest El Niño pattern in years is underway, and fleets hauling freight across western mountain passes and the central U.S. should prepare for a wetter, more volatile winter season, according to DTN product manager of transportation and logistics Ben Hershey. DTN has also just launched WeatherHub, a weather intelligence platform that puts hyperlocal road-condition data and a patent-pending crash risk index directly in the hands of dispatchers and fleet operators.

The El Niño signal points to a warmer-than-average winter across much of the central United States, but Hershey cautioned against complacency. Significant snow events can still hit the northern, central, and southern plains, and below-freezing temperatures will still reach much of the South for at least short periods. The more acute risk for carriers is out west, where a substantially wetter winter could hammer mountain corridors — including high-volume passes in the Sierra Nevada and Rockies — with repeated waves of heavy precipitation.

“We’re looking at a potential of a much wetter winter season, which could challenge those operators trying to travel those mountain passes,” Hershey said. “It is going to put a challenge for those operators that have to travel up and over those mountain ranges moving freight from the western part of the United States into the central and eastern parts.”

“We are trying to apply it to their operations — giving them a potential risk of a crash in that situation heightens their attention to the weather conditions,” Hershey said, describing the crash risk index logic.

The crash risk index, which DTN has filed as a patent-pending solution, fuses historical crash records — including precise location, time, and concurrent weather conditions — with real-time traffic data and forecasted weather to generate a forward-looking crash probability along a given route. The tool produces hyperlocal forecasts down to a couple of miles in resolution and looks out to a 72-hour window, a range Hershey said was calibrated specifically to how fleet operators actually make route-planning decisions. Weather data from DTN extends several days further, but the 72-hour horizon covers the detailed operational window carriers told the company they rely on most.

AI is central to making the system practical. Hershey noted that processing the same combination of weather and traffic data would have taken hours to run a decade ago, making it nearly useless for real-time decisions. “Now we’re able to do this in minutes,” he said, adding that DTN continues to layer AI tools on top of its core traditional meteorological models rather than replacing proven science with AI alone.

WeatherHub, launched within the last few months, lets users scroll through road-network conditions hour by hour — including air temperature, road-surface temperature, and road conditions — across the U.S. Dispatchers can enter an origin and destination and see projected conditions along that specific route timed to when their driver is expected to be there, along with alternate routing options. For carriers and third-party logistics providers that prefer not to add another standalone application, DTN also offers the crash risk index and full weather dataset via API for integration into existing platforms. Hershey pointed to tangible financial stakes beyond safety: fleets with documented weather data can use it to contest late-delivery penalties from shippers, a meaningful lever given ongoing economic and fuel-cost pressures across the industry.

  • DTN’s patent-pending crash risk index blends historical crash records, traffic, and weather forecasts to project route hazards up to 72 hours out at hyperlocal resolution of a few miles.
  • El Niño points to a warmer central U.S. winter on average, but carriers face a potentially much wetter season across western mountain corridors, threatening key freight passes.
  • DTN’s newly launched WeatherHub platform delivers hour-by-hour road-condition data and route-specific forecasts, with full API access for integration into third-party logistics systems.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

Tender Rejections at 13.5%: Tight Market or Fade?

Tender rejections are still sitting around 13.5% — and that’s the key signal for where the truckload market goes next. In this SONAR update, we break down whether post-Labor Day freight is fading or holding, what tender volumes are saying about demand, and why rising diesel still matters. Also in this update: spot rates, import volumes, inventory risk and what the next few days could mean for carriers, brokers and shippers heading into Q4.

The Outbound Tender Rejection Index held at 13.45% as of Sept. 10, remaining significantly above the same period in prior years and signaling a still-tight truckload market even as rates pull back from a Labor Day-driven surge, according to Zach Strickland’s Thursday Sonar market update.

Strickland noted that the Labor Day bump in rejection rates was more pronounced than in any of the previous three years — a detail that carriers and brokers should weigh carefully. The central question now is whether rejections continue falling at a steep pace or stabilize near current levels, which will set the tone for the next month of freight activity.

“It’s still going to be tight, I think, for the rest of the year. That’s not in question. It’s just the rate of change that I think we’re really interested in at this point,” said Strickland.

On the demand side, the Sonar Tender Volume Index — a seven-day moving average of all accepted and rejected tenders — has been softer since mid-July, a trend Strickland attributed partly to modal conversion as shippers shifted long-haul moves to intermodal and rail, with East Coast rail increasingly absorbing that volume. A component of economic softness may also be a factor, though current trough levels still sit above the comparable period last year.

Lean inventory levels add urgency to the demand outlook heading into Q4. Strickland warned that tight inventories entering a period of uncertain holiday demand could force carriers into expedited trucking moves, particularly as intermodal becomes less fungible with trucking later in the year. “This is a huge risk for this index as we move into the 4th quarter,” he said, pointing to the sharp post-Labor Day spike in tender volumes as a sign that shipper urgency has returned.

Spot rates continue to face upward fuel pressure, with the national van rate on the NTI sitting at $3.43 — a figure that includes fuel surcharges. Retail diesel prices are approaching $6 per gallon, a level Strickland flagged as a direct and immediate cost for shippers: fuel surcharge bills are expected to rise again this week and next. The Reefer Tender Index showed continued pressure, while the Flatbed Tender Index was flatlining — consistent with Q4 seasonality that traditionally softens flatbed demand.

Import volumes tracked by the IOTI remain elevated relative to both earlier this year and historical norms for this time of year, supporting the view that inventory levels across the supply chain are still lean. Dry van spot rate maps showed significant geographic dispersion, with many lanes still running in negative territory — a sign, Strickland said, that capacity has not yet fully returned to the market following the holiday period, though he expects that to change in the coming weeks.

  • Tender rejection rates held at 13.45% on Sept. 10, with the Labor Day spike larger than any of the prior three years.
  • Diesel approaching $6 per gallon is pushing fuel surcharges higher for shippers this week and next, with van spot rates at $3.43 on the NTI including fuel.
  • Lean inventories heading into Q4 could force expedited trucking moves as intermodal becomes less substitutable later in the year.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

Margin Collapse: 9.7 to 0.6 in One Quarter

Margin collapse hit fulfillment operators fast: cushions fell from 9.7 points to 0.6 in one quarter. This breakdown digs into the live network data behind rising parcel costs, slower GMV growth and what it means before peak season. Eric Lemus of Deposco explains why shipping costs are rising faster than revenue, how order growth is diverging from dollar growth, and why lean inventory could backfire in Q4. If you run parcel, fulfillment or e-commerce ops, this is the number to watch. #ParcelShipping #Fulfillment #SupplyChainData

Operator margin cushions nearly vanished in the second quarter, shrinking from 9.7 percentage points in April to just 0.6 points by the end of June, according to Commerce Signal, a new quarterly report from supply chain software firm DePASCO built on live fulfillment transaction data. The collapse was driven primarily by accelerating parcel shipping costs outpacing gross merchandise value growth — and peak season surcharges have yet to hit.

Eric Lemus, Vice President of Strategy and Analytics at Deposco, said the divergence between GMV growth and order volume growth tells the core story. GMV growth decelerated from 15.4% to 13.4% during the quarter, while order volume growth nearly doubled, climbing from roughly 4% to 8.8%. “Demand is slowing in dollars, but not necessarily in units,” Lemus said. “Consumers are still buying, but operators are moving more units through their platform or through their networks without seeing the reciprocal revenue growth as they anticipated.”

Parcel shipping costs rose approximately 13% year over year by the end of Q2, more than three times the pace of broader consumer inflation. Lemus identified carrier mix, dimensional weights, and contracted rates as the primary internal drivers pushing costs higher within individual operator networks, on top of structural factors like energy costs. Deposco’s forward forecast calls for parcel inflation to remain elevated at a minimum of 12% year over year through Q4 — before peak season surcharges are applied.

“There’s been reports, and what we’re seeing is surcharges are likely to range anywhere from 6+% on average. So if you compound that with a pretty heightened environment of year-over-year inflation with parcels, this Q4 peak season will certainly show some pressure on the margins due to that carrier spend,” Lemus said.

Inventory levels add another layer of risk heading into peak. Days on hand closed Q2 at 89.3 — the leanest level in several months — and brands and third-party logistics providers ended the quarter just 3.3 days apart in inventory coverage, an unusually narrow gap. Lemus noted that inventory has begun ticking up since July, but said the pickup may be arriving too late to fully buffer peak season demand. Operators running in the leanest inventory quartile face the most acute exposure to stockouts and unfulfilled orders.

Deposco’s Commerce Signal report is drawn from more than $80 billion in fulfilled GMV across over 4,000 brands and operators, and hundreds of millions of orders per year on its warehouse and order management platform. Lemus, a former Wall Street analyst, said the real-time transactional foundation distinguishes it from survey-based or forecast-reliant reports, which he argued carry inherent bias and lag. The Q2 report’s four forward calls — continued parcel inflation, sustained GMV growth, lean inventory levels, and low days-on-hand turns — have largely played out as projected, with parcel inflation the one area that moderated slightly before an expected re-acceleration in Q4.

For operators looking to protect margins before peak, Lemus pointed to carrier diversification as the highest-impact lever available. “If you’re able to generate a more diversified carrier strategy, what we’ve seen and what we believe to continue throughout the peak season, you’ll likely reduce your parcel spend by 21%,” he said. He also cautioned operators against anchoring forecasts to last year’s peak season data, given the significant volatility in parcel costs this year, and urged SKU-level inventory analysis to identify replenishment gaps before demand accelerates.

  • Operator margin cushions collapsed from 9.7 percentage points to 0.6 in Q2 as parcel costs rose ~13% year over year while GMV growth slowed from 15.4% to 13.4%.
  • Deposco forecasts parcel inflation will remain at least 12% year over year through Q4, with peak season surcharges expected to average 6% or more on top of that baseline.
  • Operators using diversified carrier strategies reduced parcel spend by 21%, according to DePASCO’s live transaction data across 4,000-plus brands and 3PLs.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.

3PL victory: TQL tossed as defendant in Colorado liability trial

While a dire view of what might happen to brokerages in a post-Montgomery world ripping through the logistics industry, one of the biggest 3PLs just won a victory in Colorado that relieved it of potential liability.

Total Quality Logistics (TQL) had its request to be dismissed from a case in a Colorado federal court granted on Tuesday by Judge Nina Wang. 

The facts of the case filed by Deann Miller are that her husband, Scott Miller, was driving on U.S. 285 in the Centennial State in June 2024 when steel beams fell off a truck and on to the pickup truck Miller was driving, killing him.

Judge Wang said it was “unclear” who Ignacio Cruz-Mendoza was driving for when the metal on his truck fell off his vehicle, but that he “may have been delivering the cargo on behalf of Monique Trucking.”

Lots of defendants

Deann Miller sued pretty much everybody in the supply chain. The original complaint from March 2025 only had the driver and Monique as defendants. But an amended complaint brought in TQL, Intsel Steel West LLC (which was the customer that was supposed to receive the shipment), and Triple-S Steel Holdings, which also was a customer for the steel. It also brought in a company called Searing Industries, which actually delivered the steel on to the truck involved in the fatal crash. 

Judge Wang granted the request of TQL, Intsel and Triple-S Steel to have them tossed out as defendants. However, the dismissals were without prejudice, so the plaintiff can refile with a different legal approach.

Not surprisingly, when the lawsuit was first filed, TQL in its response cited the Federal Aviation Administration Authorization Act (F4A) as shielding it from charges of liability or negligence. F4A held that states could not take action that might impact a “price, route or service.” TQL also argued that the so-called “safety exception” that did open the door to lawsuits against, for example, a carrier involved in a crash, could not be extended to a broker. 

That defense ended with the Supreme Court unanimous decision in the case of Montgomery vs. Caribe Transport II. The judge’s decision in a footnote acknowledges that TQL withdrew the F4A defense after Montgomery.

Judge is not ambigous

The judge’s separate rulings for TQL and (jointly) Triple-S and Intsel left little doubt where she stood on the issue, at times calling the plaintiffs’ arguments “vague” and having “not adequately alleged facts” supporting her claims.

Judge Wang said Miller “clearly averred that the negligence, carelessness and/or recklessness of defendants, as being vicariously liable for the actions of (Cruz-Mendoza, the driver of the truck carrying the steel), consisted of various actions or omissions.”

But TQL argued that there was no legal basis to “establish…that TQL employed Mr. Cruz-Mendoza or that (they) otherwise had a principal-agent relationship.”

The plaintiff was seeking to establish vicarious liability that could be applied to TQL in her arguments. But having tossed out that argument against the steel customers, Judge Wang dismissed it against TQL as well.

Miller also alleged a negligent hiring claim against TQL. But Judge Wang said the plaintiff “does not allege any facts suggesting that TQL hired Mr. Cruz-Mendoza as an employee or independent contractor or had any sort of principal-agent relationship with Monique Trucking, instead relying exclusively on broad references to ‘defendants’ generally.”

Charges of a joint venture or joint enterprise among the defendants also were thrown out for TQL, Intsel and Triple-S, all without prejudice.

C.H. Robinson speaks again

The issue of broker liability post-Montgomery, along with the prospect of brokers facing nuclear verdicts without the possibility of F4A protection, came up twice this past week for C.H. Robinson (NASDAQ: CHRW) at investor conferences.

An email sent to TQL had not been responded to by publication time.

Transcripts of the remarks at those conferences–one at Citi and the other at Jefferies & Co.–reveal a consistent message: insurance costs are not a major budget item at C.H. Robinson, and even with the Lipe vs. Lupus Superior nuclear verdict in which C.H. Robinson on the surface faces a charge of  hundreds of millions of dollars, such cases are an “anomaly,” according to CFO Damon Lee at the Jefferies conference.

“We certainly don’t believe the earnings trajectory that we’ve been on, the outperformance that we’ve been on in any way is going to be derailed by insurance,” Lee said.

But he added “we believe the average small and medium-sized broker is going to have a very difficult time surviving in the post Montgomery, post Lipe world.”

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Huntington sues 24 R&R companies over more than $12M in debt

Nearly eight months after the collapse of R&R Family of Companies, trucking and freight-related companies continue contacting FreightWaves about unpaid invoices and seeking answers about whether they will ever recover money owed by the logistics group and its affiliates. 

A federal lawsuit filed by Huntington National Bank provides one of the clearest pictures yet of the web of companies tied to R&R and the debt remaining after the Pittsburgh-based logistics operation unraveled.

Huntington sued 24 R&R-related companies June 8 in U.S. District Court for the Western District of Pennsylvania, alleging they owe more than $12 million under a shared lending arrangement.

The defendants include R&R Express, R&R Express Holdco, R&R Express Logistics, RFX, Refrigerated Food Express, GT Worldwide Transport, GT Worldwide Logistics, Load to Ride Transportation, RFX Tampa and New Taylor Transportation, among others.

Huntington alleges the defendants are jointly and severally liable for the outstanding obligations, meaning the bank contends it can seek repayment of the debt from any or all of the companies covered by the loan agreements.

The lawsuit is the latest legal action stemming from the financial collapse of R&R, whose operations began shutting down in January, leaving employees without jobs and carriers and other creditors pursuing unpaid bills.

Huntington says more than $12M remains outstanding

According to the complaint, Huntington and S&T Bank entered into a Second Amended and Restated Credit and Security Agreement with R&R companies and other borrowers on March 18, 2022.

The agreement included a revolving loan commitment of up to $85 million, along with a $3.675 million term loan.

Court documents show a Huntington revolving note was later amended to approximately $65.9 million, while a separate revolving note involving S&T Bank totaled approximately $19.1 million.

The borrowers pledged substantially all of their assets as collateral for the operating loans, according to the complaint.

Huntington alleges the 24 defendants are jointly and severally responsible for obligations under the credit agreement and describes them collectively as part of a broader group of freight forwarding, trucking and logistics companies known as “R&R Express Co.”

As of June 8, the outstanding balance of the operating loans exceeded $12 million, excluding legal fees, costs, default interest and other charges, according to Huntington.

The bank is seeking a money judgment for the outstanding balance, along with post-judgment interest, attorneys’ fees and costs.

The allegations have not been adjudicated.

At its peak, R&R Family of Companies employed more than 500 workers across Pennsylvania, Texas, Colorado, North Carolina and Tennessee. (Photo:R&R Family of Cos.)

Lawsuit maps R&R’s sprawling corporate structure

The complaint also provides a detailed look at how many of the companies were connected through R&R Express Holdco and RFX.

Among the relationships identified by Huntington:

CompanyRelationship alleged in Huntington complaint
R&R Express Inc.Core R&R operating company
R&R Express Holdco Inc.Parent/holding company for numerous affiliates
R&R Express Logistics Inc.Solely owned by R&R Express Holdco
R&R Express Properties LLCSolely owned by R&R Express Holdco
R&R Driver Solutions Inc.Solely owned by R&R Express Holdco
R&R Equipment Leasing LLCSolely owned by R&R Express Holdco
GT Worldwide Transport Inc.Solely owned by R&R Express Holdco
Border Connect Freight Services Inc.Solely owned by R&R Express Holdco
Paradigm Transportation LLC80% owned by R&R Express Holdco
Final Mile Dedicated Group LLC80% owned by R&R Express Holdco
GT Worldwide Logistics LLC90% owned by R&R Express Holdco
Border Connect Logistics Inc.Solely owned by R&R Express Holdco
Paradigm Transportation Management Group LLC80% owned by R&R Express Holdco
Final Mile Solutions Group LLC80% owned by R&R Express Holdco
RxG&A LLCSolely owned by R&R Express Holdco
TLogistics LLCSolely owned by R&R Express Holdco
A.M. Transportation Services LLC60% owned by R&R Express Holdco
RFX LLCMembership includes R&R Express Holdco and RFX Inc.
Refrigerated Food Express LLCSolely owned by R&R Express Holdco
Pioneer Transfer LLCSolely owned by RFX
Load to Ride Transportation LLCSolely owned by R&R Express Holdco
One Stop Freightways LLCSolely owned by R&R Express Holdco
RFX Tampa LLCSolely owned by RFX
New Taylor Transportation LLCSolely owned by RFX

The ownership structure is particularly significant because several of those companies operated under distinct names and in different segments of the freight market while remaining connected through R&R’s holding-company structure.

New Taylor Transportation is tied to Taylor Express, the North Carolina trucking operation whose employees were abruptly laid off in January. Load to Ride was another trucking operation acquired by R&R before the company’s financial problems intensified.

RFX operated as one of the organization’s freight brokerage businesses.

Bank says companies could no longer pay creditors

Huntington’s complaint traces R&R’s financial deterioration to the prolonged freight downturn that followed the pandemic-era trucking boom.

The bank alleges R&R’s financial condition declined during the freight recession and that the deterioration accelerated during 2025.

By late 2025, Huntington and S&T had notified R&R-related borrowers that they would no longer provide additional advances under the operating loans, according to the complaint.

Huntington alleges the defendants subsequently “ceased operating due to a lack of liquidity and access to financing.”

The bank lists several alleged events of default, including missed debt-service payments, defaults by other co-borrowers and a real estate transfer by one borrower.

More significantly for trucking companies still seeking payment, Huntington alleges that the borrowers acknowledged in writing that they were unable to pay creditors as debts came due.

The complaint also specifically alleges that the defendants failed to pay carriers in a timely manner, which Huntington contends constituted another default under the credit agreement.

Unpaid freight claims continue to surface

The Huntington litigation comes as carriers and other freight companies continue attempting to recover money from R&R-related businesses.

In a separate case, Illinois-based motor carrier Amerixpress Inc. sued R&R Express Logistics in February, alleging it had transported 37 loads but had not received $152,050 in freight charges. The complaint said Amerixpress completed and delivered the shipments and invoiced R&R for the work.

Amerixpress ultimately obtained a default judgment against R&R Express Logistics. The court entered judgment May 14 awarding Amerixpress $152,050 plus costs.

Documents attached to the Amerixpress lawsuit also illustrate how R&R’s payment problems reached beyond individual carriers. Some Amerixpress invoices contained notices assigning the receivables to factoring company RTS Financial Services and directing payment to RTS.

FreightWaves has continued hearing from companies in recent months seeking information about unpaid R&R and RFX invoices and the status of efforts to recover those funds.

No bankruptcy proceeding involving the R&R companies is identified in the Huntington complaint. Instead, creditors and lenders have increasingly turned to individual lawsuits to pursue repayment.

Why it matters: Huntington National Bank’s lawsuit against R&R Family of Cos. sheds new light on the interconnected companies behind R&R, while unpaid carriers and other freight creditors continue trying to determine where they can turn for recovery. 

Groundbreaking for $669M East Coast container terminal

Construction is underway on Delaware’s largest-ever maritime infrastructure project, a $669 million container terminal that state officials say will quadruple the state’s cargo-handling capacity and create thousands of high-paying jobs, even as rival port operators mount new legal challenges to stop it.

The Delaware Container Terminal (DCT), sited on 137 acres of former DuPont industrial land along the Delaware River in Edgemoor, began major construction in 2026 after years of permitting battles and a 2024 court ruling that temporarily revoked federal dredging and seawall permits. Those permits were reissued in April 2026, allowing work to proceed on the waterside elements that include dredging the channel to 45 feet, building a new seawall and high deck, and installing foundational infrastructure for a modern, all-electric container facility.

The terminal is being developed through a public-private partnership between the state-owned Diamond State Port Corp. (DSPC) and terminal operator Enstructure, which already manages facilities at the nearby Port of Wilmington. Once complete, DCT and the upgraded Wilmington facility will operate under a unified “Port Delaware” brand, with a combined annual box capacity of up to 1.6 million twenty-foot equivalent units (TEUs).

A formal groundbreaking ceremony is scheduled by Sept. 14.

For Delaware, a state with a relatively small industrial base, the stakes are high: Supporters see DCT as a generational investment that could anchor a new logistics and distribution corridor along the I-95 spine, while critics warn of overcapacity and intensified competition in an already crowded mid-Atlantic port market.

DCT alone is designed to handle 1.2 million TEUs per year, served by 2,700 feet of quay, seven ship-to-shore gantry cranes, and 26 rubber-tired gantry cranes for yard operations. The 45-foot berth depth will allow calls by post-Panamax vessels of up to 16,000 TEUs, putting it among the top tier of East Coast terminals.

The project is one of several container terminal projects under development at locations stretching from the Gulf to the Eastern Seaboard. The $1.8-billion Louisiana International Terminal just received federal permits for an all-new box hub near New Orleans, and Mediterranean Shipping Co. is building a terminal on the site of a redeveloped steel mill in neighboring Baltimore. 

State and port officials have long pitched the project as an economic catalyst for Delaware, particularly for Wilmington and surrounding communities. Projections estimate the terminal will create nearly 6,000 new jobs once fully operational, including more than 3,100 direct positions for longshore workers, equipment operators, warehouse workers, and related roles.

Construction itself is expected to generate about 3,900–4,000 jobs and roughly $42 million in state and local tax revenue during the buildout. At full capacity, Port Delaware could support around 11,480 total jobs and generate about $76.2 million annually in state and local taxes, according to state and industry estimates.

Gov. Matt Meyer and supporters from both major political parties  have emphasized that many of the port’s direct jobs pay well above the regional median, with some longshoremen earning more than $100,000 a year.

DCT is being marketed as a “green port,” with all-electric terminal equipment, shore-power connections for vessels (“cold ironing”), and energy-efficient lighting and buildings intended to reduce emissions compared with conventional diesel-powered terminals. The design also includes a new truck gate complex, a 100,000-square-foot warehouse, expanded reefer plug capacity, and direct rail access to support intermodal freight movements.

The Port of Wilmington is served by Class I railroads Norfolk Southern (NYSE: NSC) and CSX (NASDAQ: CSX). NS operates dedicated local turns into the port from its Edgemoor yard just east of Wilmington, and offers double‑stack intermodal service from the port to major Midwest markets. CSX also serves the port and provides connections to midwestern, southern, and southeastern U.S. destinations via its Philadelphia Subdivision and Wilsmere yard west of the city.

Highway access via I-495, I-95, I-295, and the New Jersey and Pennsylvania turnpikes is a key selling point for shippers looking to move containers into the Philadelphia, South Jersey, and Mid-Atlantic markets.

The project has faced stiff opposition from established port operators in New Jersey and Philadelphia, who argue that adding a major new container terminal so close to their facilities will fragment traffic and strain the river’s navigation channel.

In July 2026, port companies owned by the Holt family, which operate facilities in Camden and Philadelphia, filed a new lawsuit challenging the federal permits for DCT, raising maritime-safety and environmental concerns. That suit follows earlier litigation that succeeded in 2024 in having the permits vacated, delaying the project by nearly two years before the U.S. Army Corps of Engineers reissued them this spring.

Enstructure and state officials maintain that the terminal has undergone extensive environmental review and that the deeper channel and modern design will improve safety and efficiency on the Delaware River, in reporting by local media.

The terminal is being built in phases, with the first waterside phase targeted for completion by the end of 2028. At that point, DCT is expected to be operating at about 40% of its ultimate 1.2 million-TEU capacity, with additional cranes, yard equipment, and backland infrastructure added as cargo volumes ramp up.

If the project stays on schedule, the first containers could move through Edgemoor by late 2028, positioning the gateway to compete more directly with the Port of New York-New Jersey and other East Coast gateways for trans-Pacific and intra-East Coast services.

Read more articles by Stuart Chirls here.

Read more:

Port of Los Angeles posts record 2.9M TEUs, eyes strong finish to 2026

Colonial Terminals opens new Savannah breakbulk hub

World container volumes post record 17.3 million TEUs in July

Drinking water or warships? Panama Canal reverses ship restrictions

Sustainability goals: New analysis shows 31% emissions gap between ocean carriers on same trade

EAIGLE Is Turning Existing Security Cameras Into 30-Second Gate Transactions

EAIGLE just closed a growth funding round on the back of 350% year-over-year growth, driven by an AI platform that leans on cameras yards and gates already have installed to push gate dwell times below 30 seconds, while reducing detention, claims and labor costs. Founder and CEO Amir Hoss joined FreightWaves from one of the fully automated gates his company operates, walking through how EAIGLE got there and what the technology replaces on the ground.

Hoss said EAIGLE didn’t start as a solution looking for a market. Instead, the company grew out of a specific ask from a major retail customer. 

“The whole company started from an interaction with one of the largest global retailers that brought up a problem to our team as an expert for automation,” Hoss said. That inbound problem shaped everything that followed. “That was our entry. We first got to know about the problem and then tried to figure out the solution, and here we are. I’m standing in a fully automated gate and yard that operates unmanned and paperless.”

At its core, Hoss described EAIGLE as an automation company whose solutions run on computer vision layered over infrastructure customers already have. 

“The automations are powered by computer vision, which is leveraging the existing security camera system that our customers have at the gate, in the yard and in the dock to automate the whole not just check-in and checkout process but also the shipping and receiving process,” Hoss said. 

Over five years of deployments across North America, that has meant driving toward one consistent outcome: making the transactions fully unmanned, paperless, and real-time, all the time, from the gate to the dock and vice versa.

Hoss framed the problem EAIGLE solves around what he called the TLCC framework: time, labor, claims, and compliance. On time, he said gate transactions that used to take between seven and a half and 18 minutes, CTPAT or not, now run under 30 seconds and rarely above a minute, saving carriers and shippers hundreds of hours of driving time. 

On security, Hoss tied the platform directly to a rise in trailer theft, including a case out of Texas discussed earlier in the broadcast. “We not only make it automated and unmanned, but we make it more secure because all the validation of the BOL, the PO, the paperwork happens on the spot in real time,” he said. “Until those validations happen, those trailers cannot get accepted, and the custody transfer cannot happen from the carrier from the shipper to the receiver.” 

On claims, Hoss said the same validation covers on-time and in-full performance, temperature-controlled loads, and physical damage to trailers and trucks. 

On compliance, it captures whatever a given lane requires, whether that’s California-specific rules or CTPAT documentation for cross-border freight.

That philosophy splits across EAIGLE’s two core products. Automated Vehicle Access Control, or AVAC, handles the gate itself, capturing that ground-level reality and automating check-in and checkout before passing validated data into the yard management system. YardSight picks up from there, addressing what Hoss called the industry’s real bottleneck: yard management systems that only update when a human tells them to. 

“YMS updates are at the mercy of either shunt trucks, the shipping receiving office, or the dispatch office,” Hoss said. By pulling from cameras on light poles, exterior walls or mounted on shunt trucks, EAIGLE keeps the yard scanned and the YMS updated continuously. “Real time matters,” Hoss said, noting some yards need refreshed data every four minutes to keep pace with high-volume environments like automotive manufacturing, where parts have to hit the dock within minutes of being needed.

That same validation layer doubles as fraud prevention. Hoss walked through how EAIGLE has intercepted attempted trailer theft at its highest-risk distribution centers, with tactics including fake bills of lading, real BOLs stolen and presented at the wrong facility, and drivers recruited through online marketplace postings without realizing they were participating in a theft. 

Cross-referencing the BOL, purchase order, appointment data and a carrier’s USDOT number in real time, according to Hoss, lets the system flag mismatches and weigh a carrier’s prior history before a trailer is ever accepted.

EAIGLE’s infrastructure-agnostic approach, Hoss said, is what makes the platform workable for inland facilities that could never justify a heavier build. “The technologies agnostic to infrastructure, and infrastructure being the cameras, the kiosk that you see behind me that sometime is needed for driver interaction and sometime is not needed,” he said. 

Yards without cameras simply add the same type they’d use elsewhere on site. 

“There’s nothing proprietary about the infrastructure. And that’s one of the key advantages when it comes to the inland market.” At the facility where Hoss was standing, roughly 1,100 trucks a day once required two gates, four lanes, and 18 full-time staff across three shifts. 

“It’s now fully unmanned,” Hoss said, with the paperwork and signature exchanges that used to accompany shipping and receiving eliminated along with the guard shack itself.

Hoss traced that labor gap back to what guard shacks were built to do. 

“I remember five, six years ago when I was interviewing my first security guard that we ever talked to, to build this solution, the first thing he told me is, ‘Look, we don’t validate here, we just log,’” Hoss said. Guards weren’t hired to check paperwork, and validating it often fell outside their job entirely. “When they don’t log, the data is not validated, so it becomes garbage in and garbage out,” he said, noting that dynamic as one of the reasons yard management systems have stayed siloed for 15 to 20 years. 

Fixing it, in his view, starts at the gate. 

“To figure that out properly, first you have to capture the reality on the ground, and the reality on the ground comes from the cameras, from the scale, from any other automation that you’re doing on the ground physically.”

Asked what the yard looks like further out, Hoss pointed to autonomous vehicles as the next layer on top of the digitization EAIGLE has already built. 

“We have customers right now that within months they will be testing acceptance of autonomous truck going into an autonomous yard, and then nobody touched that load and trailer all the way to the loading and unloading process,” Hoss said. Human involvement won’t disappear entirely, he said, but it will shift toward exceptions and edge cases rather than routine checks and logging.

Click here to learn more about EAIGLE.

Teamsters president throws down gauntlet to UPS: Strike coming in 2028

A man in sunglasses speaking into a microphone with his other fist in the air at a rally.

It’s two years until the contract between United Parcel Service and its 330,000 unionized drivers and package handlers is due for renewal, normally a time when labor-employer relationships are less contentious. 

The Teamsters union is ready for war. 

In a series of self-produced Teamsters podcasts starting in mid-July, President Sean O’Brien put UPS (NYSE: UPS) on notice that rank-and-file members will go on strike if the company doesn’t acquiesce to demands for even better terms than the rich contract currently in place, which he calls “historic” for its pay and benefits.

Among issues the union is prepared to strike over are expected attempts to roll back health and pension benefits, automation and deployment of autonomous trucks, and alleged outsourcing of last-mile delivery and supply chain functions to non-union subsidiaries. 

Perhaps, the most unusual strike trigger is a new demand that all four union regions, which are governed by supplements to the national master agreement, be allowed to go on strike mid-contract if the parties remain deadlocked on how to resolve union grievances.

“It’s going to be a battle and we are probably going to strike UPS. I mean, we have to because they don’t respect us. They don’t do what they’re supposed to do on the obligation of the contract. They fight us on everything,” O’Brien said on a recent episode of the “Better Bad Ideas” podcast.

It’s no secret that the Teamsters and UPS don’t have good relations, but the level of animosity this far ahead of negotiations is striking. 

Since union leaders lack their most powerful weapon — the strike — in the middle of a contract, tactical posturing and aggressive public rhetoric typically decline. Contracts are supposed to provide a period of operational stability for the company and workers, with union leaders shifting to enforcing what was already won rather than demanding new concessions. Mid-contract disputes are resolved through highly structured administrative procedures.

O’Brien also continued to disparage CEO Carol Tomé and her management team, saying they are out of touch with workers’ needs. The comments fit his gruff persona — O’Brien eagerly points out that his initials are SOB —but raise questions about whether any trust will be left by the start of negotiations to reach an accommodation.

“She makes $29 or $30 million per year and all she cares about is the bottom line and the balance sheet and the stockholders. She doesn’t care about the employees who have made this company successful for 70 years,” the Teamsters chief said in another episode. (The CEO’s total compensation in 2025, mostly from the value of stock awards, was actually $22.8 million, according to UPS securities filings.)

“This lady is fucking delusional. And I cannot wait to get to the bargaining table to address our members’ concerns, but also to hold this company accountable,” O’Brien said in taking offense at public statements on earnings calls crediting the company’s completed transformation plan, which involved a glide down in Amazon volume and reconfiguring the network, for enabling a return to profit growth. 

“She doesn’t even mention the most important people that work for this company. That’s the rank and file members, the men and women who go there and sacrifice time away from their families, sacrifice their bodies.” he continued. “That is the biggest bunch of bullshit that I’ve ever heard in my life. … The company’s always been profitable. She didn’t bring it back. Our members are the ones that make this profitable.” 

UPS van and truck drivers, and package handlers, ratified a five-year contract in August 2023. The Teamsters estimated the contract’s value at $30 billion.

The agreement included a $2.75-an-hour wage increase in the first year for full- and part-time workers, followed by smaller annual bumps, and 60 non-economic changes covering work conditions. By the time the contract ends, senior full-time drivers will earn approximately $170,000 a year in wages and benefits. Part- and full-time workers will get $7.50 more in hourly wages over the life of the contract. Existing part-time workers saw their wages immediately raised to $21 an hour, while new part-timers start at $21 an hour and advance to $23 an hour. The contract ended a two-tier driver wage system for doing the same work, bringing all junior drivers into seniority status.

The Teamsters plan to launch the next contract campaign in the fall of 2027, but is already drawing battle lines. What follows are extensive podcast excerpts in which O’Brien lays out how he plans to attack UPS, while motivating workers to prepare for a work stoppage.

The podcasts are important because they provide a window into the union leadership’s mindset ahead of contract negotiations that will have national economic and political implications. UPS delivers more than 16 million packages per day, about 17% of total domestic volume, and total global volume represents an estimated 5% to 6% of U.S. GDP. A strike could disrupt supply chains and operations for about 1.5 million business customers that rely on the company for package and freight delivery, especially leading into the peak shipping season and the holidays.

It’s also possible that UPS executives would welcome a strike as an opportunity to halt the upward spiral in labor costs, further raising prospects for a damaging shipping disruption. 

“We are focused on running a safe, reliable and successful business that provides industry-leading service for our customers, creates opportunities for our people and positions UPS for long-term growth. The current agreement remains in place through July 31, 2028, and we remain committed to working with the Teamsters as we have for more than a century,” spokeswoman Gennevieve Bowman said in a statement to FreightWaves.

UPS says industry leading pay and benefits, including annual wage increases and cost-of-living adjustments, top driver pay of $45.75 an hour and part-time workers receiving healthcare coverage that costs them next to nothing — no premiums and low/no co-pays — prove that the contract is good for employees.

Some industry observers say UPS needs to take a strong stand against the union if it wants to bring costs closer to industry norms and still be relevant in the parcel delivery industry. Satish Jindel, the president of parcel analytics provider ShipMatrix, said during a recent presentation that a strike would allow UPS to break the union by hiring outside drivers at much lower cost, giving it a chance to regain dominance in last-mile delivery. 

While streamlining the domestic parcel network has improved productivity, resulting in lower cost per piece, UPS is simultaneously relegating the parcel business to secondary importance by leaning into market segments that value the company’s end-to-end capabilities like complex healthcare, small-and-medium businesses, industrial and automotive, and B2B delivery. UPS has been promoting its strategic focus on premium segments for nearly two years, but the Aug. 31 announcement about reorganizing its operating model around full-service, global logistics solutions underscored that local, e-commerce parcel delivery was no longer a priority.

If that’s the case, will UPS care if frontline workers go on strike?

“This is crunch time for UPS and Teamsters. Their cost to serve remains extremely high. It’s an albatross for them. This is really going to be a seminal moment for UPS to try and change their business strategy,” said a former UPS executive who spent more than 20 years in a senior management role, on condition of anonymity to protect against potential backlash while still working in the freight industry. 

UPS drivers make more than their industry peers, but the work is difficult and the union says UPS needs to do more to improve conditions. (Photo: Jim Allen/FreightWaves)

“Do you continue to slog along with a similar high cost structure, where you are the outlier, or do you really go to the mat, which would mean some sort of a work stoppage? I’m confident those types of conversations are taking place internally. What I don’t know is the level of willingness to take on that pain,” he said. “I can guarantee you they are thinking about it. What’s the breaking point?. How much can we tolerate?”

The last national strike at UPS was in 1997. The walkout shut down UPS for 15 days and cost the company more than $600 million in lost business, according to a New York Times story then.

“There was a tremendous hangover, both culturally and on the business side,” the FreightWaves source said. “The calculations on how quickly the business would come back after the strike were too ambitious. It took a long time for people to come back. And it led many shippers to decide never to single source again. They split their volume to avoid getting caught without options.”

UPS had $88.7 billion in revenue last year and the Teamsters insists it can afford to better compensate its workers. The company spent $1 billion on stock buybacks in 2025.

“The irony of the 2023 Teamsters victory is that while it secured $65/hour total compensation, it forced UPS to aggressively shrink its network, automate hubs and cut thousands of positions to preserve margins on lightweight B2C freight. They got their pound of flesh, but the Teamsters may have also mortgaged future union job growth in the process,” commented Richard Metzler, a well known logistics veteran with executive stints at FedEx, DHL, XPO and uShip.com, in response to the FreightWaves article about Jindel’s prediction. 

In an interview last week, Jindel said UPS situation is different than 30 years ago, when a strike would be nearly impossible to manage. Today, UPS would easily be able to use Roadie and recruit replacement drivers from FedEx and a mass of low-cost alternative carriers that have sprouted in recent years. 

A strike “will be painful for three months, but that at least will correct the illness. You have to amputate the leg to save the body. You already compromised the body with the last contract and this one will kill it. If they give in to the union they will have to remove their middle name. They won’t be a parcel carrier,” Jindel said.

Here are Sean O’Brien’s views in his own words on the “Better Bad Ideas” podcast, edited for length and flow:

Bad blood between UPS management and workers

— “You can never underestimate their trickery or foolery during these negotiations. We are going to have to fight hard to get what our members demand.”

—“We’re gonna go into this contract negotiations from a position of strength like we always do. But the one thing we’re gonna do differently is not take UPS at their word anymore because their word is no good. “We want to work together. But with UPS, you know, they’re suffering from a pandemic known as lie-abetes. What they say and what they do are two different things. And at the end of the day, when they get caught and they have to pay up, you know, it’s a different tune. So I cannot wait for 2028.” 

—“UPS called me up recently and they said, ‘Hey, is there any way that you could help us organize FedEx or, you know, help us get some business?’ I’m like, maybe 10 or 12 years ago when you were growing, when you were hiring people, when you weren’t trying to eliminate jobs, when you weren’t subcontracting out of work. And it’s just funny. There’s no shame in their game.”

—“When she [Carol Tomé] recently was posed the question about what’s your feelings about 2028 and the negotiations with the Teamsters union, I felt her response was hilarious. 

“Her response was, well, we’ve been partners for a long time, and I’m sure we’ll figure it out. Now, I don’t know about you, but if you’re a partner with someone, you work collectively and you talk about relationships, You talk about your husband, your wife. That’s your partner, your girlfriend, your fiance. Those are your partners. And you work together to be successful. You work together to solve problems. You work together to create opportunities. Now she thinks that this is truly a partnership. She’s sadly mistaken. When you are opening up businesses, buying businesses [Roadie, Happy Returns] to try and compete with the core business that has made you the success you have been for decades upon decades upon decades, that’s not a true partnership. 

“We have partnerships with a lot of good employers throughout this country. We have partnerships where employers actually value the labor that their employees, our members provide to them…. There are a lot of good employers that we work with that cherish and value those relationships. UPS is not one of them.” 

—“There was a time at UPS where they were actually [urging] our members to bring in what they called sales leads, where they were hungry to get new business, where they actually cared about the customer, where they actually cared about service. And I’ve got to tell you, it’s frightening to see the direction this company is going in. It’s frightening to see the lack of empathy from the CEO in the c-suite of UPS. And, you know, they have the balls to ask us, can we work together to try and level the playing field with our competition? 

“Like, are you shitting me? You’ve done a good job of dismantling the relationship between the Teamsters, dismantling the morale at UPS. But yet you want to talk about partnerships? You wanna talk about working together? Look, 2028 is gonna be a very, very rough year for UPS. 

“Look at who’s running a company. Look at how much money they’re making. Look at how much they’re not investing in their business. Look at the lack of urgency to capture new business and take a step back and realize that 2028 is gonna be the toughest year for UPS.”

—“They’ve launched a PR campaign over the last two weeks. And you’ve seen it in FreightWaves (a reference to the Aug. 11 story about Jindel’s 2028 contract prediction), where they’re out there pleading their case saying that the Teamsters are too rigid. The Teamsters should acquiesce because they are going to destroy the package delivery business. We’re not destroying the package delivery business. She’s destroying the package delivery business.”

—“I want to be clear. We don’t have one fucking partnership with UPS. None whatsoever. They’ve asked us to help them with legislation. They’ve been even deceitful in trying to give us information on FedEx to go organize a competition. Well, we don’t have the time and opportunity to do that because we’re so busy playing defense against a company that hasn’t lived up to their obligation of the contract. As far as we’re concerned, we’re not gonna allow anybody to negotiate jobs away from us.” 

The likelihood of a strike

—“We’ve not been shy in telling UPS and the public that we will strike to get the best contract. We set the bar higher in 2023 and we have to achieve more in 2028.”

—“We’re going to have to strike. We have a very rich strike and defense fund. But what I would suggest to everybody who is at UPS right now is join your local credit union or bank and have a dedicated amount each week taken out because we are going to pay an enhanced strike benefit if and when we do strike UPS. But you have plenty of time right now to put aside additional funding so you’re not compromised financially.”

—“We have nothing to lose as a union. We are poised. We’re positioned. We’re gonna do exactly what we did the last time. We’re gonna have a contract campaign.” 

Teamsters President Sean O’Brien addresses union members. ()Photo: International Brotherhood of Teamsters)

—“I am not optimistic of coming to a tentative agreement without striking UPS. I hope the stockholders in Wall Street listen to this, because if I’m a stockholder and I’m dependent upon UPS to earn dividends, it’s going to be some tough times for you.” 

—“We’ve struck the last five years as a Teamsters union over 340 employers nationwide. We’ve extended picking lines to support our brothers and sisters in similar industries like Cisco, US Foods, and Republic Waste Management.”

Confrontation or compromise?

Listener’s Question: “Why is hostility the only platform? The Teamsters in the beginning started with a handshake agreement, but now the Teamsters talk trash the UPS all the time on any platform available. Customers read it, then they decide to bail. Imagine that. I wonder if you have considered how many customers would flock to the UPS if they actually acted like you like working with them under the rules they agreed to at negotiations.

O’Brien: That question is fucking definitely from a disgruntled UPS manager. No doubt. Absolutely no doubt. No union member in their right fucking mind would ask such a question. You know, if UPS did the right thing by their members, if they solved problems in a timely manner, if they adhered to the contract, then there’d be no complaints. 

“It’d be a perfect world. However, UPS causes these problems. UPS chooses not to do the right things by their members. And if there’s consequences as a result of UPS’ bad behavior towards our members, so be it. And I would encourage all managers to get the fuck off Better Bad Ideas.” 

The right to strike over deadlocked grievances 

The grievance process under the contract has been a major Teamsters’ tool for forcing faster action on promised improvements or blocking UPS actions. But the union claims UPS consistently stonewalls potential resolutions to wear members down into accepting unfair conditions, such as alleged overtime abuses.

The Teamsters successfully used the rules to speed up air conditioning retrofits for 5,000 delivery vans in hot-weather states after two years of limited progress. In June, UPS met the deadline for upgrading 2,000 vehicles, with the remaining 3,000 scheduled for system installations by next summer. UPS also rescinded its driver buyout program in the Central region in response to strong opposition and then capped its nationwide voluntary separation offer at 7,500 drivers after the Teamsters pushed back hard on the grounds that buyouts improperly undercut the union as the workers’ bargaining representative. 

Coordinated strike threats by UPS Teamsters in the Central Region and Chicago Local 705 last year led to grievance settlements in the Central Region and a first contract for UPS administrators and specialists in Chicago. 

Most union contracts, including all UPS supplements with the exception of the Central Region, prohibit strikes during the life of the contract. But the UPS Central Region master contract supplement allows the union to strike when the sides reach an impasse. Grievances go through panels at the local level. If no agreement is reached, the issue gets kicked up to a national panel if it deals with union-wide issues, or it goes to arbitration if it concerns language in the local supplement. To trigger the right to strike, the deadlocked grievance must be over Central Region language, not national language. 

The tool had never been used until O’Brien pulled the lever in 2025. When the sides couldn’t agree on a series of workplace issues, the Teamsters issued 72-hour strike notices at the Worldport air hub in Louisville, Kentucky, and two other locations, and prepared to extend picket lines to other air terminals. Management quickly settled the dispute, which centered on safety, seniority and subcontracting at a maintenance parts warehouse. 

The 2023 collective bargaining agreement between the United Autoworkers and Stellantis included language giving the union the right to strike over product and investment commitments once a complaint has been taken through the grievance procedure. 

O’Brien spoke extensively about strengthening grievance procedures in the upcoming contract:

— “UPS does not respond to time sensitive issues. And the only thing UPS understands is the threat of a strike.”

“UPS, true to their character, always tries to skirt their obligation under the contract. . . So, clearly we have a credible argument to have the right to strike in every single area, every single grievance procedure for deadlocked cases. That will get UPS to stop dragging their feet [on] grievances they know they should settle.”

—“We’re gonna demand the right to strike over deadlock grievances. . .  It’s gonna be up to UPS how they want these negotiations to go. If they want them to go smooth, give us everything we want — we go away.”

—“We are going to be looking to achieve the right to strike in every single grievance procedure throughout this country to hold UPS accountable and make sure they have a sense of urgency to solve our problem.” 

—“We want the right to strike over deadlocked grievances because right now there is such a backlog of grievances because UPS won’t settle anything. The only way to solve problems in an expedited manner is to have teeth in the grievance procedure that will allow us to strike over deadlocked grievances.”

On outsourcing

In November, the Teamsters said it would mount a campaign to gather evidence and stop UPS from funneling packages from its traditional delivery network to its Roadie subsidiary, which operates like an Uber for packages. Roadie’s digital platform connects independent drivers, who provide their own vehicles, with local retail stores fulfilling online orders for same-day delivery. Union officials accused UPS of subcontracting parcel deliveries to gig drivers working for Roadie, a violation of the 2023 collective bargaining agreement, to avoid paying overtime and skirt safety laws.  

It also accused Happy Returns, another UPS company, of using independent contractors to handle e-commerce returns that would have gone through UPS Store counters and clerks.  

Industry observers agree with UPS that Roadie handles same-day, store-to-front door shipment that never go through the company’s sortation network, as well as oversize items that don’t fit through automated parcel conveyors.

In the podcasts, O’Brien also said the union needs to organize UPS Supply Chain Solutions, the division responsible for global logistics and freight distribution. He also targeted MNX Global Logistics, a provider of time-critical radiopharmaceuticals and temperature-sensitive medical products that UPS Healthcare acquired in 2023. 

—“Supply chain is where they divert all their non-union work. We’re going to demand that they turn them [Supply Chain and Roadie] over through neutrality or we put them into the [national] agreement. . . . Otherwise, you’re not going to get a contract.” (A neutrality agreement is a pact where an employer promises not to interfere with, or campaign against, a union organizing drive, allowing workers to unionize simply by signing authorization cards.)

“MNX delivers the same packages that we deliver through the UPS system. MNX was caught being inside the facilities with a brown uniform masquerading as a UPS employee. We have an arbitration claim going on right now.”

(UPS addressed the complaints about subcontracting in a previous statement: “We have several business units with different operating models to meet different customer needs.  Our contract with the Teamsters requires that UPS drivers handle all deliveries for our small package business unit directly and we remain in compliance with the terms of our agreement. We address any disputes through our long-established grievance process.”)

Automation and autonomous trucks

—“They are going to push for automation. They’re going to push for more work with less people. This is going to be probably the toughest negotiations that the Teamsters has seen.

—“We’re going in there as a position of strength because they are no longer the powerhouse they once were. And we’re just gonna have to fight, fight, fight. We’re gonna make demands. I know for a fact we’re gonna demand no automation.”

—“AI, automation and the creation of new jobs is going to be paramount in these next negotiations.”

—“We’re gonna be fighting autonomous vehicles, where CEO Carol Tomé has been outspoken about having autonomous feeder trucks on our nation’s highways. But I got news for Carol Tomé. We are gonna fight it legislatively on a state level, state by state, like we’re doing in California right now, and other states. 

Healthcare and other benefits

—“UPS members, full-time and part-time, have Cadillac health plans provided by union health and welfare funds paid for by the employer where our members pay nothing towards the cost of the premium. There are no hidden deductibles or anything else like that. We have the cream-of-the-crop medical. So, to protect that is gonna be paramount. Also, our members, both full time and part time, have the best pensions in the country.”

—“We need to continue to negotiate the highest paid wages in the industry; and protect, preserve and improve on any and all benefits.”

—“It’s not beneath UPS to try and attack those health and welfare, and pension funds. That’s definitely a strike issue we’re going to have to protect and improve.”

On part-time Workers

About 51% of UPS frontline employees work part time.

—“Before, there were part-timers who were making $13.50 to $14 per hour. It was ‘embarrassing’ for a Fortune 500 company with record profits when their part-time employees were on government-assistance programs. We made UPS bring the starting rate of pay to $21/hour, but also reward those long-term part-timers so their wages kept increasing. “They deserve the highest wages and benefits. The cost of living is going up, especially in big cities. We’re going to build on [the last contract] and get the most for our part-time workers.”

—“There is no doubt that we will be making a proposal to increase part time pensions at UPS.”

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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PE firms buy 3PL Navajo Expedited, target other acquisitions

trucks on a highway

Private equity firms Centre Partners and Altivare Capital Partners have acquired 3PL Navajo Expedited. The duo will advance the broker’s driver-vetting and pricing automation capabilities while seeking complementary acquisitions.

Lakeland, Florida-based Navajo Expedited, was previously part of Navajo Express, a 300-unit over-the-road and dedicated carrier based in Denver. Financial terms of the transaction were not disclosed.

Navajo Expedited is an eight-year-old truckload broker specializing in dry van and temperature-controlled transportation on time-sensitive and specialized lanes for food and beverage, consumer packaged goods and industrial shippers. It has a proprietary technology platform with a vetted carrier network of 8,000 operators.

The company is led by 15-year industry veteran Brandon Bodine. Bodine and the current management team worked together prior to starting Navajo Expedited.

“Our leadership team has worked together for many years, and we have invested early in automation because it makes us more reliable for shippers and easier to do business with for carriers,” said Bodine, founder and CEO, in a news release. “With Centre and Altivare behind us, we now have the capital and resources to accelerate what this team has spent years building.”

Centre’s investment will fund the 3PL’s next phase of growth, which may include acquisitions. The money will also be used to expand the company’s tech platform.

The deal was partially funded from Centre Strategic Solutions I, a dedicated fund established by Centre to support independent sponsor deals in the lower middle market.

“Expedited has built a differentiated freight logistics platform underpinned by longstanding customer relationships, exceptional service and proprietary agentic AI technology that is already improving driver vetting and load execution, said Bruce Pollack, managing partner at Centre.

“With a leadership team that has built and scaled freight logistics businesses together for more than 15 years, strong underlying customer demand and a highly scalable operating model, the Company has a compelling platform to accelerate market share gains through organic growth and strategic acquisitions.”

Why it matters? Private equity backing provides 3PLs with the capital needed to scale operations, expand service offerings and pursue strategic acquisitions. The deal also highlights a growing trend of consolidation across the freight brokerage sector following the Supreme Court’s landmark broker liability ruling.

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