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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

A convenient time for a vacation, indeed

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

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

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

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

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

BALTHROP: “One-vehicle fleets.”

FREIGHTWAVES: OK, that’s interesting.

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

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

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

How a truck driver gets stopped for inspection

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Time to start inspecting in the winter

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

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

FREIGHTWAVES: That makes sense.

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

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

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

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

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

Why the Northeast is quietly running out of diesel

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

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

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

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

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

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

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

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

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

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

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

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

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

Here’s a breakdown:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The ‘everything shortage’ endures

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

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

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

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

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

Exclusive: Central Freight Lines to shut down after 96 years

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

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

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

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

Kalem agreed.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Watch: Central Freight Lines’ impact on the LTL market

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

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

Central Freight Lines statement

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

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

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

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

Brief history of Central Freight Lines

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

Source: Central Freight Lines

Warehouse cramming is about to begin — Freightonomics

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

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

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

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

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

Seasonality pushing rejections and rates higher ahead of the Fourth

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

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

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

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

The Pricing Power Index is based on the following indicators:

Load volumes: Absolute levels positive for carriers, momentum neutral

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

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

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

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

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

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

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

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

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

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

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

Tender rejections: Absolute level and momentum positive for carriers

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

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

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

SONAR: Capacity Trend Market Score (Carriers – VAN)

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

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

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

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

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

Freight rates: Absolute level and momentum positive for carriers

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

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

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

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

Economic stats: Momentum and absolute level neutral

Several economic releases this week are worth noting.

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

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

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

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

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

SONAR: IJC.USA

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

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

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

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

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

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

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

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

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

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

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

Project44 acquires ClearMetal to strengthen predictive tools

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

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

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

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

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

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

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

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

Click here for more articles by Grace Sharkey.

Project44 expands real-time visibility into China

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

‘Project44’s vision has always been global’

Texas ports defy tariff uncertainty with record cargo performance

Record first-half container volumes at Port Houston and historic cargo tonnage at the Port of Corpus Christi suggest shippers and energy exporters are still moving freight despite an increasingly uncertain global trade environment.

Port Houston handled 389,962 twenty-foot equivalent units (TEUs) during June, an 18% increase from the same month last year, while first-half container volumes climbed to a record 2.23 million TEUs, the highest six-month total in the port’s history.

“Our region is resilient and our port is ready to handle the diverse cargo needs,” Port Houston CEO Charlie Jenkins said in a news release. “Overall, we are well-positioned for long-term growth and continued global competitiveness.”

The June results were led by a 27% increase in loaded import containers to 177,097 TEUs, while total container traffic rose 18% year over year. Loaded export containers declined 2% during the month but remained essentially flat through the first six months of 2026.

Steel cargo also rebounded during June. Steel imports increased 40% to 406,452 tons, while total steel tonnage climbed 46% year over year.

Despite the strong monthly gain, steel cargo remains down 14% year to date compared to 2025. General cargo continued to outperform, rising 55% in June and 34% through the first half of the year.

Overall tonnage moving through Port Houston’s public terminals reached 4.68 million tons during June, up 4% from a year earlier, while first-half tonnage totaled 28.2 million tons, a 3% increase.

The broader Houston Ship Channel region also continued to benefit from strong exports. Through May, regional trade tonnage increased 17%, fueled by a 23% rise in exports, while import tonnage declined 4%. Crude oil and refined products accounted for more than half of all cargo moving through the ship channel.

The Port of Corpus Christi posts record energy commodity volumes in Q1

The Port of Corpus Christi reported the strongest second quarter and first half in its history.

Customers moved 55.8 million tons of commodities during the second quarter, surpassing the previous quarterly record established earlier this year.

Through June, cargo volumes reached 110.3 million tons, a 7.7% increase over the previous first-half record set in 2025.

June cargo totaled 16.67 million tons, compared with 17.24 million tons during the same month a year ago. However, year-to-date volumes continued to set records, supported by strong petroleum, crude oil and liquefied natural gas shipments.

Growth at Corpus Christi was driven by multiple commodity sectors during the first half of 2026:

LNG volumes increased 36.3% to 11.5 million tons.
Agricultural commodities surged to 2.1 million tons, up from about 189,000 tons a year earlier.
Refined products increased 8.9% to 17.1 million tons.
Other bulk liquids rose 11.7% to 8.2 million tons.
Natural gas liquids increased 18.4%.
Crude oil shipments reached 66 million tons, up 1.3% year over year.

“The continued growth in multiple commodities reflects the significant advantages gained by completion of the ship channel improvement project last year,” Port of Corpus Christi CEO Kent Britton said in a news release.

Metric	Port Houston	Port of Corpus Christi
H1 cargo	28.2 million tons	110.3 million tons (record)
H1 containers	2.23 million TEUs (record)	—
Biggest growth driver	Container imports	Energy exports
Largest commodity	Containers/steel/breakbulk	Crude oil, petroleum, LNG
Record achieved	Largest H1 container volume	Best quarter & best H1 ever

Why it matters: June’s cargo reports show Texas’ Gulf Coast ports continue to benefit from two distinct but complementary growth engines—containerized imports and exports through Houston and booming U.S. energy exports through Corpus Christi—providing another positive signal for freight markets and international trade despite continued tariff uncertainty.

Lanesurf gave $15,000 to its AI agent. Any broker in the country can call and take it.

Lanesurf, which helps freight brokerages cover loads in 10 minutes, has opened a public phone line. Callers dial (350) 220-6331, get assigned a load, and negotiate the rate with the AI. Any amount the caller talks the AI up above its target is money the caller keeps, up to the prize cap on that load.

How to try it

Call (350) 220-6331 from any phone in the US.
The AI opens with a load. You play the carrier.
Negotiate the rate up. Every dollar above the AI’s target is yours, up to that load’s prize cap.
Get paid on the spot. The card is issued the moment the AI agrees to your rate.

How the challenge works

When you call, the AI opens with a load. You play the role of a carrier. The AI plays the role of a broker whose job is to book that specific load as cheaply as possible. If you talk it into paying above its target, Lanesurf pays you the difference up to the prize cap tied to your load.

The loads sit in a pool. Some are short local runs. Others are regional. Some are cross-country hauls with starting rates as high as $10,000. The bigger the load, the bigger the prize.

Prize caps scale with the load – tens of dollars on the smallest, hundreds on mid-size regional runs, thousands on the biggest cross-country hauls.

A quick note

This is a fun public challenge, not a demo of the real thing. The production system negotiates rates and books loads at scale – moving thousands of loads a day for a roster of brokerages, a few of which are publicly listed on the company’s website.

About Lanesurf

Lanesurf helps freight brokerages book loads in 10 minutes. It works vetted carriers by email, call, or text to source capacity, negotiate rates, and surface options for the broker.

Strong quarter for Expeditors, air freight leads the way

Just about every statistic for Expeditors International in the second quarter was significantly higher than it was a year ago.

In the key measurement of volume, airfreight measured in kilos was up 14% for the quarter, with the month-by-month percentage gain rising each month: 13% in April, 14% in May and 15% in June.

Ocean freight did not fare as well, as measured in forty-foot equivalents. It was down 9% in April and up just 1% in May. But it rose 9% in June for an overall flat performance.

That helped lead to a 32% year-on-year increase in revenue, to $3.5 billion from $2.65 billion a year earlier. Operating income rose 41%, to $349.6 million from $247.7 million in 2025. Net income jumped to $2.03 per share from $1.34 a year ago.

Expeditors (NYSE: EXPD) does not hold an earnings call with analysts. The prepared comments by CEO Daniel Wall in the earnings announcement celebrated the strong quarter.

“Our excellent performance this quarter, with double-digit growth across most of our products, is demonstrating that our strategy around operational excellence is working and allowing us to take market share,” Wall said. “By focusing on increasing growth in each region, product, and district, we generated tremendous growth and diversification. Our sales, account management, and operations teams all executed extremely well globally this quarter to drive and support this momentum.”

‘Highly elevated’

The strong performance of its airfreight operations came in a market that Wall said had “highly elevated” buy and sell rates, “as demand for air capacity continued to outweigh available space, particularly late in the quarter.”

Wall also said the Middle East conflict reduced the number of passenger flights that could handle air freight, resulting in “constrained belly capacity.”

Wall also cited strong demand from “hyperscalers,” the operators of huge cloud systems and the data centers that power them. “We have seen increased demand for freighter space, as some hyperscalers are requiring upper-deck access for their servers,” Wall said.

Signs of improvement on the water

The ocean market, with its weak first part of the three months followed by late strength, was still up 7% sequentially from the first quarter, as measured by volume. “We may be starting to see a flattening of the long downturn in the ocean market,” Wall said.

Profitability measured per container was higher in the second quarter fueled by “heightened pricing late in the quarter.”

Expeditors’ customs forwarding business has benefited from tariffs as shippers try to sort through the complexity of changing levies. That continued in the quarter.

“Our customs business benefited from tariff-related complexity, along with solid growth from new customers and increased declarations from existing customers,” Wall said. He added that there has been a “temporary surge” in activity related to the tariffs under the Trump administration’s International Emergency Economic Powers Act (IEEPA), which were ruled illegal by the Supreme Court.

The cost of transportation rose faster than the increase in revenues. Transportation costs climbed 38% against the 32% increase in revenues. But salaries and other operating expenses were up just 13%, helping to lead to the increase in income.

Expeditors stock has been a strong performer. It was up about 2.8% at approximately 11:15 a.m. Tuesday after the earnings release. According to Barchart, the percentage gains for Expeditors are 4.57% for the month, 25.43% for the three months and 49.9% for the last 52 weeks.

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Prologis says $18.8B takeover of Segro moving forward

Prologis announced Tuesday that it will move forward with a plan to acquire London-based logistics warehouse operator Segro. Prologis put forward its “best-and-final” offer last month, following multiple rejections from Segro’s board. The final price tag values Segro at $18.8 billion.

Prologis (NYSE: PLD) also announced Tuesday a public offering for 15 million shares of common stock to help fund the transaction. It expects to generate $2.1 billion in gross proceeds from the transaction. Underwriters J.P. Morgan and BofA Securities have a 30-day option to purchase up to an additional 2,250,000 shares.

Shares of PLD were down 2.8% to $140.15 in early trading on Tuesday, which was in line with the $140 offering price.

“We are pleased to have reached agreement with the SEGRO Board on a combination that we believe will create meaningful value,” said Prologis CEO Dan Letter in a news release. “This deal brings together SEGRO’s exceptional portfolio and customer relationships with Prologis’ global platform, operating expertise and financial strength.”

Adding Segro (LSE.SGRO) will expand Prologis’ European portfolio by 47% to 368 million square feet and give it a development pipeline on the continent totaling 13 million square feet.

The combined entity will have $269 billion of assets under management.

Segro’s stockholders will receive 0.092 new Prologis shares for each share held, with the option to receive up to 25% in cash.

The deal is expected to be neutral to slightly dilutive to Prologis’ funds from operations (core and adjusted) in the first full year following closing, which is scheduled for the 2027 first half.

Prologis will also seek a secondary listing on the London Stock Exchange.

Why it matters? The story highlights how logistics real estate is becoming an increasingly strategic and consolidated asset class.

More FreightWaves articles by Todd Maiden:

Strong finish: Ocean lines raise profit outlook by 200%

Ocean Network Express (ONE) reported Q1 FY2026 revenue of US$4.539 billion and a net profit of $31 million, while lifting its full-year profit forecast sharply to $900 million from the prior $300 million guidance.

For the April–June period, the joint venture of three Japan-based container carriers posted revenue of $4.54 billion, up from $4.05 billion in the year-ago fiscal quarter. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to $707 million from $616 million, while EBITDA margin improved to 15.6% from 15.2%.

That compares to EBITDA margin of 22.7% for competitors CMA CGM of France and 16.8% for Maersk (OTC: AMKBY)

Earnings before interest and taxes (EBIT) totaled $76 million against $38 million, while EBIT margin was better at 1.7% versus 0.9%.

But higher fuel costs from the effects of the Iran war undercut net profit that tumbled to $31 million from $86 million. Container volumes grew 3.257 million twenty foot equivalent units (TEUs) from 3.165 million TEUs in Q1 FY2025.

The average freight rate was higher at $1,300/TEU compared to $1,199/TEU y/y, and up from $1,154 in Q4 FY2025.

The ONE consortia includes Nippon Yusen Kaisha (NYK), Mitsui O.S.K. Lines (MOL), and Kawasaki Kisen Kaisha (“K” Line).

The Singapore-based company said higher bunker fuel costs weighed heavily on profitability. Average bunker price reached $666 per ton, up from $535 a year ago and $440 in Q4 FY2025.

Despite higher fuel and operating costs from Middle East disruptions, ONE improved yields and maintained high vessel utilization as demand recovered through May–June.

Chief Executive Till Ole Barrelet highlighted improved yields, strong utilization, and operational agility as central to performance, while noting continued geopolitical uncertainty.

Read more articles by Stuart Chirls here.

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As diesel futures markets plummet, benchmark retail price rises

Diesel consumers can be excused if they are exhausted from trying to project where the prices they pay at the pump will be going after the events of the past few days and weeks.

The weekly Department of Energy/Energy Information Administration average retail diesel price that is the basis for most fuel surcharges fell Monday, published Tuesday, to $5.348/gallon, up 3.5 cts/g. It’s the fourth consecutive week the benchmark has increased, up 77 cts/g during that time.

The increase came as prices are rapidly falling in the futures market on the latest news that a deal to reopen the Strait of Hormuz is imminent. That decline came after a sharp slide in the prior three trading days on that same hope, as the market quickly embraces any prospect of an end to the closure of the strait.

Price movement in the ultra low sulfur diesel (ULSD) contract on the CME commodity exchange during those three days, and into Tuesday, have been some of the most volatile since the U.S. and Israel launched their attacks on Iran at the beginning of March.

With the market latching on to any talk of some sort of settlement that would reopen the Strait of Hormuz, the price of ULSD on CME fell, respectively, 3.68%, 2.09% and 5.93% in the three trading days ending Monday.

The day before that streak, the price was up 5.28%.

The end result is that the Monday settlement of $3.8772/g was the lowest settlement since July 13. It was also a significant drop since a $4.3416/g settlement on July 23.

At approximately 9:40 a.m. Tuesday, ULSD on CME was down 4.34%, or 16.81 cts/g, to $3.7091/g. If it settled there, it would be the lowest settlement since July 10.

A call for lower retail prices

That’s the futures market. But the retail market now also has the uncertainty of what sort of reaction there will be, if any, to President Trump’s call on oil companies to lower their retail prices, spurred by a not surprising string of earnings reports showing profitability soared during the second quarter.

The problem is that it’s not all that simple.

First, there is the definition of what is an oil company. ExxonMobil and Chevron are fully integrated oil companies, producing crude and other hydrocarbons and refining it into finished products like gasoline and diesel. They sell their wholesale products through a distribution system known as “the rack,” and set prices daily based on market fluctuation, often multiple times a day if markets are volatile, which they have been.

Where the price is set

But they do not set prices at the pump, which are controlled by the station owner, who might own one station or 100.

An independent refiner like Valero or Marathon is not integrated. They buy 100% of their inputs (mostly crude) off the open market or through contracts and turn it into products, an activity that at present is highly profitable as refining spreads have blown out during the Iran war. They also sell their products through their rack systems.

But there is no one entity that can reduce the price of crude at will, even if large oil companies choose to seek to satisfy the Trump call for lower prices and slow increases in wholesale product prices. Beyond that, there is no one entity that can reduce the price of all sorts of blendstocks that go into the manufacture of gasoline or diesel, products like ethanol, reformate or raffinate.

The conundrum then for a company under pressure from the White House is that while they can try to take steps to limit increases or accelerate decreases in their wholesale prices, that would be independent of input prices which they do not control.

How it works

Supplying a wholesale system does not take place just with output from a refinery. A company like Valero at all times will be selling gasoline and diesel into the spot and wholesale market, but the supply for that could be coming from open market purchases of finished products, not just what their refineries had produced. The systems are constantly selling and buying inputs and outputs to balance their needs and take advantage of market opportunities.

The independent refiners would be paying free-market prices for those supplies. But they would be squeezed if political pressure resulted in wholesale prices that did not justify the cost of the products purchased to help supply those wholesale systems. And that sort of situation can lead to tightening supplies, the precise opposite of a push to lower prices.

There are other potential pitfalls. A company like Chevron will sell at the rack product referred to as “branded,” which would be sold to retailers operating under the Chevron brand name. They would also be selling “unbranded,” which can go to any retailer, some of which might be fairly large like a Wawa or Racetrac.

But even if Chevron acquiesces to a Presidential call for lower prices, it would do so on its branded output. That leaves the unbranded customers at a disadvantage. Even if an oil company reduces both branded and unbranded, an independent retailer probably wouldn’t get all their supplies from that large company. They would need to turn to lesser known suppliers without a public persona who would be under no pressure to reduce their prices, because nobody knows who they are.

The result again is a squeeze on significant-sized retailers who buy unbranded fuel at the rack. Ultimately, that can not go on forever.

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Trucking coalition says 194,000 non-domiciled CDLs affected by carrier reforms

The Trucking Association Executives Council (TAEC) says a year of coordinated federal and state enforcement has resulted in sweeping changes to cross-border trucking, commercial driver licensing and highway safety.

In its “Trucking Resurgence: The Fight for Fairness and Safety Progress Report,” released July 23, the organization said actions by federal and state authorities and law enforcement agencies have significantly strengthened oversight of cross-border trucking operations and commercial driver qualifications.

TAEC represents executives from state trucking associations across the country, including Arizona, Alabama, Arkansas, California, Iowa, Nevada, Pennsylvania and Texas.

The report builds on the group’s “Trucking Resurgence” action plan released in 2025 calling for tougher enforcement against what it describes as bad actors exploiting weaknesses in trucking regulations.

Cross-border trucking reforms

Among the report’s biggest areas of progress is what TAEC calls “Cross-Border Workforce Integrity.”

According to the report, federal agencies expanded enforcement of English-language proficiency requirements and cabotage restrictions in border regions while increasing coordination with U.S. Customs and Border Protection.

TAEC said those efforts resulted in approximately 3,200 visa revocations tied to cabotage enforcement, one of the report’s most notable statistics.

Cabotage laws generally prohibit foreign motor carriers from transporting domestic freight between two U.S. points except under limited circumstances.

The report also highlights increased enforcement activity targeting unauthorized commercial operations in border regions, stating that stronger oversight is helping create a more level competitive environment for trucking companies that comply with federal regulations.

Non-domiciled CDL reforms

TAEC also pointed to significant progress involving non-domiciled commercial driver’s licenses, an issue that has become one of the most closely watched regulatory developments affecting the trucking industry.

The report estimates that more than 194,000 existing non-domiciled CDL holders—roughly 97% of current license holders—will eventually become ineligible under the new federal eligibility requirements, with some states already revoking improperly issued licenses.

TAEC also said all 50 states have undergone audits of their CDL programs and non-domiciled CDL issuance as regulators work to improve oversight and ensure licenses are issued only to qualified applicants.

The group’s original action plan recommended restricting eligibility for non-domiciled CDLs, strengthening verification of immigration and work authorization documents, improving information sharing among federal agencies and states, and increasing enforcement against fraudulent licensing practices.

Many of the milestones highlighted in TAEC’s report—including FMCSA’s new non-domiciled CDL eligibility rule, increased English-language enforcement, visa revocations tied to cabotage violations, and state crackdowns on CDL fraud—have unfolded over the past year through a series of regulatory actions covered by FreightWaves.

The report represents one of the first industry efforts to compile those initiatives into a single assessment of their collective impact.

Industry says reforms are producing measurable results

The report notes that more than 20 states have enacted or proposed legislation addressing CDL integrity, English-language proficiency, non-domiciled CDL oversight, cargo theft and commercial driver qualifications, while additional states have updated enforcement policies to align with recent federal initiatives.

FMCSA Administrator Derek Barrs said the agency remains focused on removing unsafe operators while supporting compliant carriers.

“The overwhelming majority of motor carriers and professional drivers operate safely and responsibly. Our responsibility is to support those operators by identifying bad actors, enforcing the law and closing gaps that threaten highway safety and the integrity of the trucking industry,” Barrs said in a statement.

TAEC: One year of trucking enforcement by the numbers

Enforcement category	Results highlighted by TAEC
Visa revocations tied to cabotage enforcement	3,200
Fraudulent CDL schools shut down	550
High-risk carrier investigations	704
Carriers voluntarily ceasing operations	430
Carriers shut down by regulators	60–70
Drivers placed out of service for English-language proficiency violations	More than 27,000
Noncompliant electronic logging device (ELD) platforms removed from FMCSA registry	76
ELD platforms blocked from entering the marketplace	426
Non-domiciled CDLs expected to become ineligible under new federal rules	More than 194,000
States audited for CDL programs and non-domiciled CDL issuance	50
Federal investment in CDL integrity and safety	$217 million
CDL training providers removed from the federal Training Provider Registry	Nearly 10,000

Source: Trucking Association Executives Council, Trucking Resurgence: The Fight for Fairness and Safety Progress Report (July 23, 2026).

Why it matters: The report underscores how rapidly evolving federal and state enforcement policies are changing the regulatory landscape for cross-border trucking, particularly for non-domiciled CDL holders and international carriers operating in the United States.

Los Angeles Port Police help bust $12.5M meth lab, $2M Nike theft ring

Los Angeles Port Police task force officers helped investigators seize 1,378 pounds of methamphetamine worth approximately $12.5 million in Los Angeles County.

Authorities executed a July 28 search warrant at a suspected methamphetamine production site in a remote desert area. The operation recovered crystal methamphetamine and highly condensed liquid methamphetamine. Investigators also recovered roughly $80,000 in U.S. currency. Officers took three Mexican nationals responsible for manufacturing the narcotics into custody.

The Port announced significant breakthroughs in multiple regional criminal investigations Sunday. The agency described its specialized Task Force Officers as long-standing support for federal and local partners. Port Police officers assist narcotics trafficking, precursor chemical importation, illegal manufacturing operations and large-scale cargo theft investigations. Those efforts occur throughout the region.

The DEA New York Field Division and DEA Los Angeles High Intensity Drug Trafficking Area Group 48 began a joint inquiry in January. The agencies investigated a Sinaloa Cartel drug-trafficking organization operating in the Los Angeles area. Confidential investigative methods produced seizures of 20,000 fentanyl pills and 20 pounds of methamphetamine over six months. Investigators later used ground surveillance, electronic monitoring and aerial reconnaissance to locate the clandestine laboratory.

Agencies execute July 28 search warrant

HIDTA 48 joined the DEA Special Response Team during the operation. The DEA Clandestine Laboratory Unit also participated in the search. Los Angeles Port Police, Hawthorne Police Department and El Segundo Police Department joined those teams. The warrant targeted the suspected drug-production location investigators found through their surveillance work.

Port Police also highlighted a separate Riverside County narcotics investigation. Officers recovered 119 kilos of cocaine and two firearms during that case. Investigators identified three suspects, according to the agency. The announcement did not identify those individuals or describe potential charges.

Cargo Theft Task Force Officers also dismantled a sophisticated theft ring in a separate commercial-crimes operation. The group was responsible for stealing more than $2 million in Nike merchandise, according to Port Police. That investigation led to felony indictments against 12 individuals. The agency did not release the defendants’ names or list the felony counts.

Captain cites regional safety and supply-chain protection

“These operations highlight the dedication, expertise, and collaborative strength of our Task Force Officers,” Los Angeles Port Police Capt. Daniel Cobos said. Cobos said their work makes a measurable impact on regional safety. He also connected those efforts to drug-trafficking suppression and commercial supply-chain protection. The Port released the information Aug. 3.

Los Angeles Port Police is a specialized law enforcement agency. The force operates 24 hours daily, seven days weekly. It protects the Port of Los Angeles from threats by land, sea, air and cyberspace. More than 300 sworn officers and civilian personnel serve within the agency.

The Port Police jurisdiction spans 7,500 acres. Its coverage includes 43 miles of waterfront. The force’s task officers support investigations beyond port property. The announcement did not specify dates for the Riverside County or Nike cargo-theft cases.

Why It Matters: A single regional task force can support investigations involving drugs, firearms, suspected manufacturing and stolen freight. Freight professionals need to understand that cargo theft may draw attention from broader law-enforcement operations.

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

CHP finds $500K in stolen cargo tied to multiple Southern California thefts – FreightWaves

Louisiana bribery scheme gave 124 people CDLs without training or tests – FreightWaves

$1M recovery in Carolinas truck-theft case includes 13 semis, 3 trailers – FreightWaves

Transportation capacity falls faster in July, rates remain high

front view of two tractor-trailers on a highway

Although the transportation market cooled in July from a seasonally stronger June, it remained very tight, according to data from a monthly survey of supply chain professionals. Key transportation metrics in the Logistics Managers’ Index showed mixed results, with capacity falling faster while pricing grew at a slightly slower pace.

The index is a diffusion index in which a reading above 50 indicates expansion, while one below 50 signals contraction. The LMI displayed a 28.4 reading for transportation capacity in July. Sentiment around capacity declined at a rate that was 2.4 percentage points faster than June, tying the second-fastest contraction rate captured by the 10-year-old dataset. (The record-low reading was 23.8 in September 2020.)

A push by regulatory authorities to remove unsafe drivers has significantly tightened supply in the truckload market. Further, most publicly traded carriers aren’t adding equipment, instead making better use of what they have.

Recent initiatives to improve asset utilization were apparent in second-quarter results.

Omaha, Nebraska-based Werner Enterprises (NASDAQ: WERN) announced an official restructuring of its one-way TL fleet in February. The plan involved exiting non-profitable accounts and repurposing or disposing under-utilized tractors. Revenue per truck per week (excluding fuel surcharges) jumped 28% year over year in the latest quarter, as miles per truck were up 16% and revenue per total mile increased 10%. It expects rate per mile to increase by 10% to 13% y/y in the third quarter.

The carrier’s one-way fleet was 34% smaller in the quarter, which helped improve its total TL segment adjusted operating ratio by 270 basis points to 94.5%. While that was roughly 10 points worse than the prior peak, it was the unit’s best margin performance since the 2023 fourth quarter.

SONAR: Outbound Tender Rejection Index (OTRI.USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). A proxy for truck capacity, the tender rejection index shows the number of loads being rejected by carriers. Current tender rejections show a tight truckload market. *To learn more about SONAR, click here.*

The Tuesday LMI report showed transportation utilization (65) was 9.7 points lower than June, but remained elevated by historical standards. Growth in transportation prices (86.9) slowed 5.5 points but remained at a “very robust expansionary rate.”

“The lack of available fleet capacity has caused the lead time for tender bookings to increase,” the report stated, citing SONAR data. “In late July bookings were being made at an average of 3.74 days before the tender needs to move, up 11% from the same time last year.”

Werner noted one-way contractual bid negotiations are returning some of the strongest increases in a decade.

Green Bay, Wisconsin-based Schneider National’s (NYSE: SNDR) one-way fleet captured double-digit rate increases on contract renewals in the quarter. It said mini-bid activity is up as shippers grow more concerned with securing capacity for peak season. Schneider has increased its exposure to the spot market, noting June closely resembled March 2021, the prior cycle peak. It believes the TL market is “only in the early stages of rate recovery.”

SONAR: Van Contract Rate Per Mile Index (VCRPM1.USA) for 2026 (blue shaded area), 2025 (yellow line), *2024 (green line) and 2023 (pink line).* The index shows a 7-day moving average of the initial reporting of dry van contract rates without fuel or accessorial charges.

Supply chain costs remain elevated

The overall LMI (68.9) was down 2.2 points from a four-year high in June. Even with the modest step down, the index is on track for the highest annual reading since the freight market’s boom cycle in 2021.

Inventory levels (55) were down 5.5 points in the month, with downstream companies, like retailers, registering an almost 20-point decline into contraction territory at 46.3. Upstream respondents (manufacturers and wholesalers) reported little change, returning a reading of 59.

“This seems to support the hypothesis laid out last month that some of the surge in imports was due to retailers rushing some goods imports ahead of new potential tariffs,” the report said. “It is not clear if there will be a repeat of what we saw last year where the bulk of this inventory was held Upstream at the wholesale level and then only pulled down right before the holiday shopping season.”

Even with the slowdown in inventory growth, inventory costs (77) grew at a “very robust rate,” up 1.1 points from June.

Warehousing capacity (46.3) was down 1.2 points, pushing warehouse prices (75.5) up 1.7 points to the second-highest reading since July 2022, “the height of the post-covid inventory bullwhip.”

The readings showed a much tighter warehousing market for upstream companies. Warehouse prices were 12 points higher at the wholesale level of the supply chain.

Aggregate logistics costs (inventory, warehousing and transportation) were down 2.6 points to 239.5 in July. May’s 250.9 reading marked the fastest rate of expansion for the all-in cost dataset since March 2022.

Logistics managers surveyed expect the transportation market to remain very tight over the next 12 months, returning future readings of 40.4 for capacity, 71.8 for utilization and 89.2 for pricing.

The outlook pegged inventory levels at 64.4 one year out, with inventory costs (77.6) and warehouse prices (76.3) showing no retreat.

“Essentially, respondents are anticipating having to fit increasing inventories into tighter capacities at higher costs over the next 12 months.”

The LMI is a collaboration among Arizona State University, Colorado State University, Florida Atlantic University, Rutgers University and the University of Nevada, Reno, conducted with the Council of Supply Chain Management Professionals.

Why it matters? The Logistics Managers’ Index provides a look at all major supply chain cost buckets. The latest report signals a difficult operating environment for shippers characterized by tight capacity and growing cost pressures.

More FreightWaves articles by Todd Maiden:

SONAR and Retlia Announce a Strategic Integration of Retail Intelligence

Integration of ‘The Register’ indicator provides SONAR users with critical foresight into retail demand, market confidence and inventory volatility

SONAR and Retlia have announced a partnership to deliver advanced retail data analytics directly into the SONAR UI, the freight industry’s leading market intelligence platform. This collaboration addresses a gap in the logistics landscape by bridging macroeconomic retail conditions with proactive freight planning. By integrating Retlia’s proprietary index, ‘The Register’, SONAR users now gain a monthly read on retail demand, market confidence, inventory behavior, and margin risk; the essential precursor to physical freight movement.

This integration resolves the ambiguity of shifting consumer trends by translating news segments into a predictive indicator for inventory movement. For supply chain executives, merchandising teams, investors, and economists, this retail-facing signal provides the necessary context to connect market conditions with impending demand pressure. By identifying these shifts at the retail level, organizations can anticipate shipping volume fluctuations before they manifest in lagging reports or earnings calls, allowing for a more resilient and responsive operational strategy.

The foresight provided by early-stage retail signals is fundamental to navigating the inherent volatility of modern freight markets. Nick Wynkoop, co-founder of Retlia, emphasized that retail sentiment often serves as a leading indicator that precedes broader logistics shifts.

“Bringing retail data analytics signals into FreightWaves SONAR gives users another way to connect what is happening in retail with what may be coming next in freight, inventory, and operations,” said Nick Wynkoop, co-founder of Retlia. “Retail demand often shifts before it fully shows up in shipping volumes, sales reports, or earnings calls. The Register turns current retail headlines and market signals into a simple monthly read on confidence, demand pressure, inventory behavior, and margin risk.”

Translating these complex retail headlines into actional logistics data requires a rigorous quantitative approach. The Register serves as this objective translation layer, moving beyond anecdotal evidence to provide a structured data stream for SONAR users. The data mechanism reviews recent retail and macroeconomic data coverage, scoring individual articles as positive, negative, or neutral based on their implications for the market. These signals are then aggregated into a monthly indicator ranging from +30 to -30, providing a clear numerical pulse on market health.

High-frequency data is increasingly vital for logistics professionals who must anticipate shifts in the market to maintain a competitive advantage. Nick Persin, Director of Strategic Partnerships at SONAR, highlights the importance of embedding this intelligence into existing workflows to empower smarter decision-making.

“Retail is where freight demand actually starts, long before it shows up as a tender or booking,” said Nick Persin, Director of Strategic Partnerships at SONAR. “Pairing ‘The Register’ within SONAR gives our customers a way to see that signal early instead of reacting to it after the fact.”

Existing SONAR customers can now access “The Register” indicator directly through the SONAR platform. For those looking to leverage retail demand signals to enhance their freight forecasting and operational planning, further information is available through the resources below.

For More Information:

Retlia Retail Data Analytics: https://retlia.com/retail-data-analytics
SONAR: https://gosonar.com

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

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

A convenient time for a vacation, indeed

How a truck driver gets stopped for inspection

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

Time to start inspecting in the winter

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

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

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

The ‘everything shortage’ endures

Watch: Central Freight Lines’ impact on the LTL market

Central Freight Lines statement

Brief history of Central Freight Lines

The Port of Corpus Christi posts record energy commodity volumes in Q1

How to try it

How the challenge works

A quick note

About Lanesurf

Cross-border trucking reforms

Non-domiciled CDL reforms

Related: Truck enforcement sweeps hit 32 drivers, 45 vehicles across US

Industry says reforms are producing measurable results

TAEC: One year of trucking enforcement by the numbers

Agencies execute July 28 search warrant

Captain cites regional safety and supply-chain protection

Supply chain costs remain elevated