FreightWaves

Pamt Corp. books another net loss, 110.6% adjusted TL OR

Todd Maiden — Wed, 05 Aug 2026 00:53:18 +0000

Truckload carrier Pamt Corp. continues to cut its fleet to restore profitability.

Pamt (NASDAQ: PAMT) reported a second-quarter net loss of $7.4 million, or 36 cents per share, Tuesday evening. Excluding the impact from a one-time accrual related to prior auto liability claims, earnings per share were 25 cents. (Pamt booked a net loss of 46 cents per share in the year-ago period.)

The second quarter marked Pamt’s seventh consecutive quarterly net loss.

The company had roughly 6 cents per share in net headwinds that were not excluded from the EPS number. Lower gains on equipment sales (14 cents per share) and higher interest expense (2 cents per share) were headwinds compared to the 2025 second quarter. Higher non-operating income, which is mostly the change in value of its stock portfolio, was a 10-cent tailwind.

Consolidated revenue increased 9% year over year to $165 million. Revenue was up just 2% excluding fuel surcharges.

Table: Pamt’s key performance indicators

The truckload unit saw a 7% y/y revenue decline (ex-fuel) as average trucks in service fell 4% and revenue per truck per week was down 3%. Loaded miles per truck increased 15% y/y in the quarter. Revenue per loaded mile (ex-fuel) was off 5% y/y, but up 4% from the first quarter.

“For the first time in more than three years, market conditions enabled a meaningful sequential increase in rate per total mile,” said Pamt President Lance Stewart. “This marks an important step toward addressing rates that have been pressured lower while inflationary cost pressures have persisted.”

The company’s fleet count was just under 2,000 units in the period, down from over 2,400 tractors three years ago.

The TL unit booked a 114.2% operating ratio (inverse of operating margin) but the OR was 110.6% excluding the one-time insurance accrual. The adjusted number was 190 basis points better y/y.

The quarter marked 11 straight operating losses for the TL unit.

“As industry dynamics continue to constrain driver supply, we believe opportunities for further rate correction remain, and we have achieved additional progress through the date of this release,” Stewart said.

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. To learn more about SONAR, click here.

The logistics unit reported $51 million in revenue, a 24% y/y increase. The unit saw 230 bps of margin improvement, booking a 96.4% OR.

Pamt doesn’t provide gross profit margins for the unit, nor operating metrics like load counts and revenue per load.

Pamt used $16.7 million in operating cash flow in the first half of the year. Liquidity (cash, equity holdings and availability on its line of credit) of $117 million was $24 million lower than in the first quarter. Outstanding debt increased $12 million to $333 million.

The company announced that Daniel Kleine was appointed chief financial officer on Thursday. Kleine joined Pamt three years ago as vice president of tax. He most recently served as the company’s senior vice president of finance and treasurer.

Why it matters? Pamt’s results show how some carriers are cutting fleet counts to return to or improve profitability.

More FreightWaves articles by Todd Maiden:

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First look: GXO books strongest sales quarter in three years

Noi Mahoney — Tue, 04 Aug 2026 22:11:31 +0000

GXO Logistics reported second-quarter 2026 financial results Tuesday that showed continued momentum in contract logistics despite a cautious global freight environment.

Revenue increased 4.3% year over year to $3.4 billion, while organic revenue rose 3.4%, reflecting growth across all three of the company’s geographic regions.

Chief Executive Officer Patrick Kelleher said the company is benefiting from three strategic priorities: strengthening its commercial organization, improving operational execution through its “GXO Way” operating model, and expanding artificial intelligence and next-generation automation through its GXO IQ platform.

“Our commercial momentum is particularly evident in North America, a key growth market, where our wins in the first half of the year increased 85% over the same time last year,” Kelleher said in a news release.

Greenwich, Connecticut-based GXO Logistics (NYSE: GXO) is one of the largest pure-play contract logistics providers in the world. It has more than 970 facilities totaling approximately 200 million square feet, with a global workforce of more than 130,000 people.

GXO also secured approximately $410 million in new business wins during the quarter, a 34% increase from a year earlier and the company’s strongest quarterly commercial performance in three years. About 40% of those wins came from aerospace and defense, technology, industrial and life sciences.

Adjusted EBITDA increased to $219 million, up from $212 million a year ago, while adjusted diluted earnings per share rose to 59 cents, compared with 57 cents in the second quarter of 2025.

GAAP net income totaled $27 million, compared with $28 million a year earlier, while diluted earnings per share slipped slightly to 22 cents from 23 cents.

Cash generation also improved significantly. Operating cash flow reached $76 million, versus $3 million in the prior-year quarter, while free cash flow totaled $12 million, compared with negative $43 million during the second quarter of 2025.

GXO said it has already secured approximately $1 billion of incremental revenue for 2026, up 29% year over year, along with $353 million of incremental 2027 revenue. The company also noted its commercial sales pipeline expanded from $2.3 billion at the end of the second quarter to approximately $2.7 billion in July, providing increased visibility into future growth.

The company maintained the midpoint of its 2026 financial outlook, projecting:

Organic revenue growth of 4% to 5%
Adjusted EBITDA of $945 million to $965 million
Adjusted diluted EPS of $2.95 to $3.15
Free cash flow conversion of 30% to 40%

GXO will hold a conference call with analysts at 8:30 a.m. EST on Wednesday.

GXO Q2 2026 financial highlights

Metric	Q2 2026	Q2 2025	YoY
Total revenue	$3.4 billion	$3.3 billion	+4.3%
Net income	$27 million	$28 million	(4%)
Adjusted EBITDA	$219 million	$212 million	+3.3%
Adjusted diluted EPS	$0.59	$0.57	+3.5%

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AI hardware, Asia demand lift Lufthansa cargo revenue 27%

Eric Kulisch — Tue, 04 Aug 2026 19:48:59 +0000

The cargo division of Deutsche Lufthansa AG (FRA: LHA) posted a 26% gain in adjusted operating profit during the second quarter as strong shipping demand in Asia and from AI-driven cloud service providers, boosted revenue despite volatile market conditions and higher fuel costs associated with the U.S.-Iran war.

In recent months, Lufthansa Cargo launched a full-service, cross-border e-commerce logistics subsidiary through the merger of two in-house companies and completed the first phase of a massive modernization project at its main hub at Frankfurt airport.

The growth and new investments led Chief Financial Officer Gregor Schleussner on Tuesday to declare that Lufthansa Cargo would return to the top echelon of cargo airlines by the end of the decade.

“Companies that want to succeed in the long term must be faster, more efficient, and more adaptable than their competitors. This is why we continue to work hard to create the foundation for Lufthansa Cargo’s next phase of development through our Bold Moves strategy. Our goal is clear: by 2030, we aim to return to the ranks of the world’s top three cargo airlines,” he said in a news release issued in conjunction with Group financial results.

Lufthansa Cargo is currently the No. 14 carrier in the world, by traffic volume, according to the International Air Transport Association. It operates 12 Boeing 777 freighter aircraft and is able to market capacity on six 777s operated by AeroLogic, a joint venture between Lufthansa and DHL Express, for a total of 18 widebody freighters under its control. It also manages the belly capacity of sister airlines Lufthansa Airlines, Austrian Airlines, Brussels Airlines, Discover Airlines and SunExpress to transport freight.

FreightWaves reported on Monday that Lufthansa Cargo has quietly abandoned plans to reinstate four Airbus A321 standard-size freighters pulled from European and North Africa regional service in April. The company didn’t provide a reason for souring on the aircraft, but analysts suspect it has to do with operating and market characteristics that make it difficult to fly them at a profit.

Lufthansa Cargo revenue grew 27% during the second quarter to 1 billion euros (equivalent to $1.2 billion). Operating income grew 26% to $1.21 billion, and on an adjusted basis was up 58% to $133.6 million. During the first half, revenue was up 16% and profit margin rose 2.2 points to 10.4%.

Second-quarter demand remained strong, up 3%, despite disruptions and economic uncertainty associated with fighting in the Middle East. Lufthansa benefitted from flight reductions at Middle Eastern competitors such as Emirates and Qatar Airways Cargo and the shift of some ocean freight to air as businesses sought more predictable transport, resulting in a 27% increase in yields, year over year. Fuel surcharges offset fuel expenses and brought in additional revenue, which positively contributed to yields.

The crisis triggered a surge in demand on passenger and freighter routes to Asia. Yields to Asia and on new intra-Asia routes increased by 30%, while yields to the Middle East rose even more. The company also attributed profitability to the increased focus on high-margin industry sectors like pharmaceuticals, semiconductors, automotive, and artificial intelligence.

“The increased need for transportation of server racks indeed has almost become an industry-shaping element. We are allocating and reallocating our network to serve our customers who try and who want to move server racks around the world,” Lufthansa Group CEO Carston Spohr said on a call with analysts. “As you can imagine, for these high-risk and very expensive equipment, logistical costs are almost immeasurable, so this is a very profitable business. You do need freighter aircraft for this business by the sheer size of these racks.”

Robust demand for semi-conductors and AI-related hardware helped air cargo industry volumes grow 7% in June, according to research from Xeneta.

Available cargo capacity expanded by 2%, driven by 6% belly space in passenger aircraft, particularly from the marketing of capacity on ITA Airways. Lufthansa Group acquired a minority stake in the Italian carrier in 2025.

Hub modernization

Part of the premium strategy includes modernizing cargo infrastructure on the ground.

Lufthansa is building a $682 million, 3.5 million square-foot cargo terminal with high bays for efficient pallet storage and automated transport system that will significantly expand cargo handling capacity and efficiency. The initial building, considered the most important phase, spans 860,000 square feet — equivalent to 11 soccer fields.

Lufthansa Cargo boasts the terminal will be the most modern air cargo hub in Europe when completed in 2030.

The new facility features sophisticated warehouse management systems and conveyors to efficiently route goods, a fully automated 131-foot tall high-bay warehouse with nearly 3,000 storage slots for large pallets and an automated pallet warehouse for temperature-sensitive and specialized shipments. The high-bay section alone will enable more than 300 storage and retrieval operations per hour, doubling capacity, Lufthansa said in a news release.

The cargo airline also consolidated the activities of its heyworld GmbH and CB Customs Broker subsidiaries under the newly established brand GlobeCross. The new company combines e-commerce logistics service, including last-mile delivery, with customs clearance expertise to provide businesses with end-to-end transport for small parcel shipments. The strategy goes beyond the traditional airport-to-airport model for an airline so Lufthansa Cargo can capture additional business opportunities in the growing parcel logistics sector.

Overall, Lufthansa Group profits were dragged down by $864 million in extra fuel costs compared to last year. Operating profit fell 56% to $441 million and net income plunged nearly 90% to $141.7 million.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Matson profit surges 30% on China shipping demand

Stuart Chirls — Tue, 04 Aug 2026 19:40:54 +0000

Matson, Inc. (NYSE: MATX) reported second-quarter 2026 earnings that significantly exceeded Wall Street expectations, driven by robust demand and higher freight rates in its premium China service.

The Honolulu-based carrier posted net income of $129.4 million, or $4.27 per diluted share, up 36.6% and 46.2% respectively from the prior-year period, while raising its full-year operating income outlook.

Revenue totaled $969.4 million, up 16.7% from $830.5 million in Q2 2025. Operating Income was $158.9 million, an increase of 40.6%, earnings before interest, taxes, depreciation and amortization (EBITDA) came to $211 million, better by 28.9% from $163.6 million a year earlier.

Operating margin was 16.4%, from 13.1% in the prior-year quarter.

Earnings per share beat consensus estimates by approximately $0.45-$0.55 per share while revenue exceeded expectations by roughly $75 million.

China service drives record performance

Matson’s China service saw container volume surge 15.2% year-over-year to 37,200 forty-foot equivalent units (FEUs). Growth was fueled by tighter trans-Pacific capacity as international carriers carefully managed tonnage, avoiding large backlogs or significant blank sailings, which has supported higher rates

The Honolulu-based company said e-commerce, apparel, and e-goods showed particular strength, with freight rates exceeding expectations on its premium CLX and MAX services.

Cargo originating from Southeast Asia now represents 20–25% of China service volume, reflecting successful expansion beyond traditional China-origin shipments.

Ocean transportation segment operating income jumped 46% to $144 million, with revenue increasing 13.6% to $767.4 million.

Domestic Hawaii volume was off 1.1% and Alaska traffic slowed by 2.3%, the latter on lower export seafood volume.

Raised full-year outlook

Matson raised its full-year 2026 guidance; ocean transportation operating income in Q3 is expected to be approximately 45% higher than Q3 2025’s $147.4 million. Q4 is projected to be modestly lower than Q4 2025’s $136 million, reflecting a tough comparison to elevated demand following the U.S.-China trade agreement announced in October 2025.

Full-year 2026 consolidated operating income is expected to exceed the total $499.8 in 2025.

Chief Executive Matt Cox noted that the company expects its China service to operate at or near capacity through peak season, with demand reflecting more traditional seasonality patterns in the fourth quarter.

Read more articles by Stuart Chirls here.

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Trimac acquires California bulk food-grade transportation provider

Todd Maiden — Tue, 04 Aug 2026 18:25:04 +0000

Canadian bulk hauler Trimac Transportation announced Tuesday that it has acquired bulk food-grade logistics provider California Freight.

California Freight operates eight terminals, a warehouse and a brokerage office across California and Nevada. It provides transportation, storage and logistics services to food and agricultural companies, primarily across California’s Central Valley.

Its fleet includes approximately 500 tractors along with tank trailers that ship raw milk to processing facilities. It has over 400,000 square feet of food-grade storage space.

Financial terms of the transaction were not disclosed.

“With three decades of specialized expertise, their capabilities in food-grade transportation, warehousing and brokerage align directly with Trimac’s long-term growth strategy,” said Trimac President and CEO Matt Faure.

California Freight will continue operations under its current banner. Jesse Hanson, a sales and operations executive with Trimac, will take over as president at California Freight.

“California Freight has been dedicated to reliable service in the food and beverage and dairy sectors for a long time,” said Dave Sanders, California Freight vice president and founder. “Joining Trimac means our team and customers will be provided with even greater resources to serve those who have trusted us for decades.”

“Jim Aartman and Dave Sanders grew California Freight from just ten tanker trailers into one of the Central Valley’s leading raw milk and food-grade carriers,” said Ashesh Pansuria, director of M&A at Tenney Group. “For Trimac, this acquisition represents a strategic entry into the liquid food-grade transportation market, and they were committed to finding a best-in-class operator to establish that platform. They recognized the exceptional business Jim and Dave built over the years, and it was a privilege to represent them throughout this transaction.”

Tenney Group served as the exclusive sell-side advisor to California Freight throughout the transaction.

Why it matters? This acquisition allows Trimac to expand its specialized capabilities into the food-grade and dairy sectors, leveraging California Freight’s 37 years of industry expertise. This move aligns with Trimac’s long-term growth strategy by diversifying its portfolio beyond industrial commodities into high-demand agricultural logistics.

More FreightWaves articles by Todd Maiden:

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Supply Chain: Why Ocean Rates Skyrocketed 300% in 5 Months

FreightWaves Staff — Tue, 04 Aug 2026 17:52:04 +0000

SummaryView Transcript

GEODIS Americas CEO Laura Ritchey reveals the stark reality of today’s “uneven” economy and its impact on supply chains. While some sectors thrive, others grapple with extreme ocean shipping delays, surging freight rates, and emerging challenges from data center infrastructure. Learn how companies navigate unprecedented backlogs and leverage new tech like AI for predictive logistics.

Ocean spot rates have surged more than 300% over the past five months, and shippers are feeling the squeeze, according to GEODIS President and CEO Laura Ritchie. Blank sailings, port congestion, and ongoing threats in the Red Sea and Strait of Hormuz have combined to create a backlog that is straining manufacturing supply chains, Ritchie told FreightWaves Today.

“We have product that we’ve been trying to book since March that’s still rolling in July,” Ritchie said. “And for people in the manufacturing space where they need these things on their assembly line, they’re not too happy.”

“We aren’t seeing quite the COVID levels, but a container is a lot more expensive than it was just a few months ago.”
— Laura Ritchie, President and CEO, GEODIS

Ritchie said air freight capacity exists as an alternative but comes at a cost shippers must be willing to absorb. She noted that big tech customers are navigating chip shortages and semiconductor import constraints simultaneously, compounding pressure on both ocean and air modes. GEODIS, which employs 20,000 workers across 230 U.S. sites, is staying close to customer forecasts to help manage the uncertainty.

Despite uneven demand across sectors, Ritchie pointed to pockets of strength. Some GEODIS customers are posting sales growth of 30% to 40%, while others are flat. Apparel is a bright spot, with unit volumes rising even on an inflation-adjusted basis, while housing improvements and new housing starts remain soft. The bifurcation, she said, largely depends on each customer’s end-market exposure.

On the technology front, Ritchie said GEODIS is deploying AI to manage shipment data and trucker oversight, and is using the tools to train and upskill warehouse associates who collectively speak more than 30 languages. The company is also piloting drones for inventory management inside warehouses, citing both accuracy and worker safety benefits over traditional cycle counting. Ritchie added that supply chain orchestration — using predictive data to autonomously respond to disruptions — will define the next two to three years for third-party logistics providers.

Ritchie, who completed her first year at GEODIS’s Nashville headquarters, said she created a client experience organization earlier in 2024 by consolidating previously fragmented functions: continuous improvement, data and analytics, and account management. She modeled the structure partly on changes made at American Airlines, which reorganized its customer journey after identifying internal silos that prioritized operational convenience over the passenger experience. The new group reports directly to Ritchie to ensure organizational neutrality.

Looking ahead, Ritchie said she is most encouraged by a broader shift in how shippers are approaching outsourcing decisions. “People are back to actually thinking about supply chain as partnerships instead of transactional,” she said, adding that shippers are more deliberately defining which core functions — product, marketing, manufacturing — they want to control and which they will entrust to a 3PL. GEODIS is owned by SNCF, the French national railroad, which Ritchie said provides financial stability and compliance infrastructure that has become increasingly valuable following the Supreme Court’s Bisected Freight ruling and tightened broker liability scrutiny.

Ocean spot rates have climbed more than 300% in five months, with cargo booked in March still rolling into July due to blank sailings and Red Sea disruptions.
GEODIS CEO Laura Ritchie consolidated continuous improvement, data analytics, and account management into a new client experience organization reporting directly to her.
GEODIS is piloting drones for warehouse inventory management and using AI to train associates across 30-plus languages as automation expands.

Speaker 1 [0:00] We have Laura Ritchie here from Nashville. She is the president and CEO of Geotis. She just completed her first year. Geotis is a massive company, 20,000 employees in the US, 230 sites. Laura, welcome to FreightWaves Today.

Speaker 2 [0:13] Thank you. Thanks, Craig. Thanks, Julie.

Speaker 1 [0:15] We’re so excited to have you. So tell us a little bit about, you know, this reconfiguration of the economy. ISM’s manufacturing data is incredibly robust. A lot of that is AI data centers and big infrastructure buildout. But what are you guys seeing right now?

Speaker 2 [0:29] You know, we’re scratching our head because we’re seeing all sorts of things. So we have customers who are doing really well, they’re seeing sales up double digits, 30, 40%. And then we have others who, you know, maybe aren’t seeing the same thing. And I think a lot of it depends on who their customers are. So we’re staying really close to those forecasts. We definitely see in big tech the challenges about the shortage of chips and the ability to get things over here. So we’re planning To help them manage that.

Speaker 1 [0:57] Now, is it hard to get airlift capacity? Is that tight right now due to just all of the semiconductors and memory chips that are coming over?

Speaker 2 [1:04] It is, although I would say what we’re still seeing is ocean continues to be a challenge as well. So with all the blank sailings that are happening, the port congestion, we’re seeing things actually get stuck more on the ocean side, and then air capacity’s there, you just have to be willing to pay for it.

Speaker 1 [1:21] It’s all, there’s a price for everything. The interesting thing on the ocean side is that ocean spot rates are up, you know, over 300% in just the last 5 months. What is it? Obviously, blank sailings are a big piece of that. The international ocean container lines have such market power. Is it just that they are just trying to control price or at least manage price? Is that really what’s happening?

Speaker 2 [1:42] I think there’s that, but I do think obviously with what’s happening in the Strait of Hormuz, that’s impacting it. Threats in the Red Sea are impacting it as well. So, you know, we saw the Port of India very congested, and it’s taken some while to clear that out. We just have a huge backlog now of goods. You know, we have product that we’ve been trying to book, you know, since March that’s still rolling in July. And for people in the manufacturing space where they need these things on their assembly line, they’re not too happy.

Speaker 1 [2:13] And that’s international shipping just doesn’t have capacity to provide it?

Speaker 2 [2:17] It is and/or it’s the spot market. spot rate you’re willing to pay, as you talked about, right? So we aren’t seeing quite the COVID levels, but, you know, a container is a lot more expensive than it was just, just a few months ago.

Speaker 1 [2:28] Well, the ocean container lines, no crisis averted, they always have, uh, take the opportunity to, to raise price. It does create a significant, um, issue and strain. One of the things that is coming through some of the survey data, you’re on the board of the Federal Reserve out of Nashville, the Atlanta Fed, uh, a lot of conversation about this sort of the have and have-nots economy. Housing is down significantly, or at least soft compared to where it has been. But then you get into these electronic components, into heavy, heavy manufacturing. We covered every week with just how strong the railroad volumes are. What are other parts of the economy that are doing well outside of this big electronic AI data center buildout?

Speaker 2 [3:09] I still think we’re seeing strength in retail, certain areas of retail. So apparel has actually been up even on an inflation basis. adjusted basis. We have customers that are telling us, you know, they were, they were making it on price, but they’re actually seeing more units start to move through. So I think if your brand is well positioned and you have value, you’re personalizing the customer experience, customers are staying. You know, some people say that they’re shopping, right, to kind of alleviate the sadness about the economy in general. And we’re definitely seeing some of that. They’re trading off on, you know, how often they fill up their gas tank to maybe have a splurge. We do see in housing improvements though, that is a little bit down. New housing starts are obviously down. So, so that’s something we see. But, but yeah, it’s very uneven and it makes it hard to predict across the board.

Speaker 3 [4:04] I will tell you that the number of packages arriving to my house each week, absolutely, if you graphed it in tandem with my stress level, like you could tell last week must have been tough because there’s a lot.

Speaker 1 [4:15] You guys must be really stressed out because we get a lot of those packages.

Speaker 2 [4:18] Statistical correlation there.

Speaker 3 [4:20] I think people are getting— Craig’s favorite topic— people are getting skinny, so they have to buy new clothes.

Speaker 1 [4:24] I’m glad you mentioned that. We’re a big fan of the GLP-1s here. It’s a big recurring topic. We, a couple of weeks ago, one of our guests is in a retail liquidation, particularly CPG as well as retail. And it was interesting because what she described is that apparel is doing exceptionally well as people downsize.

Speaker 2 [4:42] Yes.

Speaker 1 [4:43] But the foods products are actually, particularly the unhealthier food or foods that we all kind of love to splurge on, are not doing as well. And it was interesting to sort of see the fact that apparel, like as a GLP-1 user, I have gone through a number, that’s the worst part of this whole thing.

Speaker 3 [4:59] I said it’s the best part. First I was like— What, new clothes?

Speaker 1 [5:02] Yeah. Except when you get the bill. Like I, like it is, how many times, the problem is like—

Speaker 3 [5:09] You know how much worse it would be to have to keep buying new clothes because you were outgrowing them though?

Speaker 1 [5:12] Yeah, well, it’s true, but the problem is, as soon as I buy a jacket, it feels like a couple months later it’s too big as you continue to slim out.

Speaker 2 [5:20] So, well, but we all needed a clothing refresh, I feel like, after COVID, right? When you had the sweatpants on.

Speaker 1 [5:25] That’s true.

Speaker 2 [5:26] And you had to say, okay, is this stuff I was wearing in ’19 really worth it anymore?

Speaker 1 [5:29] It feels like at first people were still in the COVID casual mode.

Speaker 3 [5:33] Yes, yes.

Speaker 1 [5:34] And then over time, the more professional people come back to the office, just how different it is. So you’ve been in Nashville for a year.

Speaker 2 [5:40] Yes.

Speaker 1 [5:41] What exactly has that experience been like at GEODIS in terms of, this is a, you know, you’ve been at a number of different companies across the supply chain. What has specifically attracted you to GEODIS?

Speaker 2 [5:51] Well, I think, you know, one, when you say I’ve been in Nashville for a year, I’m like, I visit once in a while, but mostly I’ve been on the road, right? So, but when I looked at GEODIS, what I really liked is we have the international ownership. So we’re owned by SNCF, which is the French railroad. And that really gives us a stability, right? A financial stability, a solid base from which to grow, and then scale. So the ability to work with customers across all 3 regions, which is how we divide up the country, and then finally meeting the teammates. So I always insist that you do in-person interviews, even during COVID I did that when I changed roles, because I think it’s meeting people and saying, is this a place I wanna work? Do I think that, you know, I can add value here?

Speaker 1 [6:34] Mm-hmm.

Speaker 2 [6:35] and see myself as part of the team. And so, so it’s been a lot of fun. It’s, it’s a surprisingly vast, though, amount of warehouses, right? So 230 locations counting freight forwarding and warehousing. And so trying to tackle that has been a bit of a challenge. I’ve made a dent in a year, but certainly more to go.

Speaker 1 [6:52] The scale of it is quite— how do you, how do you prioritize in terms of your time, in terms of what you’re focusing on with so much scale? Is your goal to visit all the locations or the main offices, or how do you, how do you think about it?

Speaker 2 [7:05] Yeah, for me, it’s really understanding the business. And so what I kind of laid out is we have freight forwarding, we have the contract logistics and the transportation business. So what do I need to know? Do— is going to a freight forwarding office giving me the ability to learn the business? Sort of yes, sort of no, right? But I have the ability to do that more remote. The warehouses you really have to see because we have a scale of automation.

Speaker 1 [7:30] Mm-hmm.

Speaker 2 [7:30] And so seeing from the least automated to the most automated, And then our transportation hubs obviously operate sort of like warehouses, but also as transportation around, you know, cross-docking and things. So I wanted to make sure I could see and touch all of that. But my favorite thing to do is go and don’t do anything they’ve said, right? So don’t follow the tour path. Don’t talk to the associates that they’re pushing out in front. You know, certainly make nice, but to make sure you go the places where maybe somebody didn’t want you to go more because I just want to learn what’s happening. What are their challenges? I appreciate the, the nice red carpet that gets rolled out for the CEO, but how do you really get your, your fingers on the pulse?

Speaker 1 [8:12] Are we gonna see you on Undercover Boss?

Speaker 2 [8:14] Is that coming? Yeah, I did think of that because now they do start to know you after a year, so it’s a lot harder. You definitely would have to do more disguises.

Speaker 1 [8:22] I watched that show. Have you seen it, Julie?

Speaker 3 [8:24] Yeah. Yeah.

Speaker 1 [8:24] I watched the show and I’m like, how do these people not, it just, you have a camera crew maybe in the first couple of episodes, right? But it just feels like it is put on for TV. So I don’t know if it’s real or not.

Speaker 2 [8:34] I don’t know. I think that they’re telling— I mean, we film stuff in the warehouses all the time. We have customers doing things. So they, they, we, I think we could do that.

Speaker 1 [8:41] So you think it’s legit?

Speaker 2 [8:42] I think so.

Speaker 1 [8:42] Yeah. We, we need to get you on Undercover Boss so we can all root for— whenever there’s someone on for The Bachelor, my wife is a big reality TV connoisseur, we’ll say The Bachelorette or Bachelor that’s in freight, we’re always rooting for them.

Speaker 2 [8:55] Yes.

Speaker 1 [8:55] Yes. It’s like, this is one of us.

Speaker 2 [8:56] Yes, exactly.

Speaker 3 [8:57] So you’ve clearly done this tour. You have talked a lot about, like, listening being the most important part, seeing the parts of the business that might not be what is necessarily brought to you, the shiny parts of it. What surprised you most? What did you learn?

Speaker 2 [9:12] Really, the passion of our teammates. And I know probably everyone says that, but I went— my questions are always like, if I gave you a magic wand, what would you do differently? And all of their asks were, you know, we have a security system for one of our customers who requires it. And they’re like, could you put a bathroom in closer to us because it would be easier for all of us? And so they’re always so thoughtful about what’s meaningful for the teammate. You know, they could have said, pay me more. They could have said, you know, give me more perks or benefits. But, and even when I asked the people who came from another provider, why did you come here?

Speaker 3 [9:50] Yeah.

Speaker 2 [9:50] They’re like, because I heard it was a great place. I joke we have a fair amount of boomerangs, right? People who leave and think, oh, maybe I’ll try somewhere else. And then, you know, they come back a couple of years later, which was great because they get the experience outside. But really, Geotis is their home.

Speaker 1 [10:05] It is interesting. I think the days of, hey, this person’s left and we’re going to, you know, that’s sort of the old school transportation way. Get out and don’t come back. It is rewarding when someone comes back after they’ve had the chance to sort of realize that things aren’t as good. Yeah, because I think in business, you get so just, you get so frustrated. I always tell folks on our team is like, you’re going to get frustrated at times, and, and sometimes it’s better to see that it isn’t as great as you think it is going to be.

Speaker 2 [10:28] That’s right. I tell my kids that all the time, but that’s a tough lesson to learn. So, so I’m like, you should go learn it then. Don’t, don’t listen to just us. You experience it, see what something else is. You’ll learn, maybe you’ll bring things back. Plus, our industry is so small, so small. So, you know, people that you worked with 20 years ago come back again, and, you know, you need to make sure that you were a professional, so.

Speaker 1 [10:51] Yeah, for sure.

Speaker 2 [10:52] Yeah.

Speaker 3 [10:53] So, you talked about getting past sort of those surface-level issues, and I read that you use the 5 Whys to do that. Yes. Can you walk us through what those are, and then some outcomes of that? Sure.

Speaker 2 [11:03] So, it’s really the Toyota Production System, right? And what they were doing when they were diagnosing issues on the assembly line was saying, why is this happening? Why is this happening? And that’s really how you get to the root cause. So, a lot of it is, just continuing to ask why. Otherwise, we solve service issues. Right now, we’re launching several new clients. Of course, there’s always bumps and bruises when that happens. And it’s really saying like, oh, it’s easy to say, well, you know, we didn’t have this or we didn’t do this, but is that really the issue? Like, what’s really happening?

Speaker 3 [11:32] So getting to the root.

Speaker 2 [11:33] That’s right.

Speaker 3 [11:34] Not just the initial symptom.

Speaker 2 [11:36] That’s right.

Speaker 3 [11:37] But the actual cause. Yes.

Speaker 2 [11:39] And then actually fix it. Like, don’t do it again. One of the things I love about our business is we seem to like Groundhog Day. where you’ve done it and then you do it again and then you do it again. So I’m like, let’s learn from it, let’s carry that forward, let’s not repeat it.

Speaker 1 [11:52] It’s a great reference. I love that movie.

Speaker 2 [11:55] Yes.

Speaker 1 [11:56] It’s such a, it was one of my favorite movies to watch. I watched it a lot of times. You created a client experience organization earlier this year. What exactly does a client experience organization do?

Speaker 2 [12:06] Well, I was studying some other industries that were really focused on customer loyalty and developing the customer journey. which would be brands, airlines have done that, and said, our customer experience or our client experience is fragmented. So continuous improvement, which helps the customer get better, we get better with serving the customer. Our data and analytics team that does all of the analytics was fragmented. The actual account management team who manages the day-to-day was all separate. So what we’re trying to do is really pull that together and say, similar to how a brand would own the customer journey, That’s really what we’re focused on. So from the moment you say, maybe I wanna work with Geotis, then that’s part of the journey to say, and of course you’ll wanna stay.

Speaker 1 [12:50] So what were the businesses you looked at as inspiration? Any favorite sort of lessons from those that you took into Geotis?

Speaker 2 [12:57] So American Airlines is a great example of doing this where they had challenges. They were receiving ratings about their customer service. And as they studied it, what they realized is similarly their journey was fragmented, right? put it in what was natural to how the airline operated best instead of what was best for the customer. And I found that that’s kind of how we were thinking too, right? Like, let’s put data and analytics with IT because we’ll call that a tech thing.

Speaker 1 [13:25] Right.

Speaker 2 [13:25] You know, let’s put continuous improvement in the engineering team because that’s where engineers go versus saying, what is the customer experience with us, you know, throughout our journey together and how do we really point that? And then I had it report to me because I think that’s the difference. Sometimes we put it in operations, sometimes we put it in sales, and that makes it— makes the organization sort of become not neutral, right?

Speaker 1 [13:49] They have a bias to give you their own perspective.

Speaker 2 [13:52] That’s right.

Speaker 1 [13:52] The truth. And of course, AI has enabled— makes this data far more actionable. And, you know, we— I think one of the interesting things about AI is that you can build your processes around the technology versus I’m sorry, build the technology around your processes versus the other way around, which is quite unique. And I know you guys, I got to spend time with your team at Pallet, had a World Cup. I know you guys are huge soccer fans at Geotis. I got to spend time with some of your folks down in Miami, and I know you guys are doing some stuff with AI. What exactly are you implementing?

Speaker 2 [14:26] So we’re doing a couple different things. So we’re doing what you would see and expect most people are, right, which is taking all of these processes, all of the data, all of the shipment data, all of the management of truckers and things like that, and turning that into being more managed by AI, right? It’s process-heavy, so it lends itself to that. The other place that we’re really thinking about it though is in training and upskilling our teammates, particularly as we continue to go further into automation. It’s really helping to be able to train teammates I think we’re up to 30+ languages now that our teammates speak, and we just haven’t had the robustness to be able to interact with them in their own language and to be able to really lead the business forward. And then some other stuff I can’t talk about yet.

Speaker 1 [15:15] We track all the public earnings and conference calls. We have pods set to basically go out. Julie and I sort of manage this process where it goes out and listens to all the calls, the conference calls of the public companies, 72 public companies in supply chain logistics we track. The most bullish consistently is Prologis.

Speaker 2 [15:34] Yes.

Speaker 1 [15:34] What’s happening in the warehouse space is absolutely— I mean, they’re always ranked. We have Claude’s own ranking. It provides a ranking system based on a couple of metrics, but it’s consistently they’re the most bullish of all the public companies. What is special about warehousing right now? Why would they be enormously bullish?

Speaker 2 [15:53] Well, I think there’s a couple things, right? So we’re gonna have to bring up the data center word. So if you look at Prologis, they have a huge database, a huge land bank.

Speaker 3 [16:01] Mm-hmm.

Speaker 2 [16:01] So they have the ability, right, to really do warehousing and do data centers in a big way. But data centers is creating now a supply chain issue that we didn’t have before. So data centers are being built outside the normal supply chain structure. So even if you, talk about like building them, once they’re constructed, there are not a lot of warehouses nearby to do fast supply of repair parts. There’s not a lot of infrastructure to support the teammates that are going to work. So it’s actually creating a problem. You know, warehouses, people believe, have expanded outside of the city limits, but now the data centers are going farther. And so if they’re positioned to have both the warehousing and the data centers, I don’t wanna speak on behalf of Dan, but You know, that’s really, I think, why they continue to be bullish about that.

Speaker 1 [16:49] Yeah, it is interesting. That’s a great point. I hadn’t thought about the whole supply chain, the need. If you have this, you know, $100 million or even multi-billion dollar investment, you need to make sure it runs.

Speaker 3 [17:01] And it’s in the middle of nowhere in many cases.

Speaker 1 [17:03] It’s getting pushed out. I mean, so many municipalities and cities and even some states are banning data centers. And so you’re wanting to be out away from cities because zoning— I mean, even Hamilton County, which is a very conservative county here in Chattanooga, put a moratorium on all data centers.

Speaker 2 [17:24] Well, and then if you’re gonna— yeah, I agree. Sorry. And then if you’re gonna do nuclear to power them, which everyone’s talking about.

Speaker 1 [17:31] Tennessee is where all this action is happening. We keep telling people it’s great down here in the South. TVA is leading that.

Speaker 2 [17:38] They are.

Speaker 1 [17:39] TVA deserves a lot of credit.

Speaker 3 [17:40] Yes.

Speaker 1 [17:40] They have really built this entire region, helped win World War II. So yeah, the whole Oak Ridge, TVA, it was the reason we could produce so much aluminum.

Speaker 2 [17:50] Okay.

Speaker 1 [17:51] And the atomic bomb, so.

Speaker 2 [17:53] Just study my Tennessee history.

Speaker 1 [17:54] We’re big, I’m a big history fan.

Speaker 3 [17:56] Yeah, Craig’s a huge history fan. So speaking of technology and moving beyond AI, I’ve read that you’ve said that visibility is just not enough anymore. So tell me what you mean by that and what else is needed.

Speaker 2 [18:09] Well, I joke that we’ve been talking about supply chain visibility for as long as I have been working, and somehow we still don’t have it in an easy way. But I think the new buzzwords are orchestration, right? Like the ability to not only have the data, but actually be predictive, and not just predictive in the way of like, oh, this order is going to sell to this store, so I should put it close. but actually say, this is a disruption, here’s what I’m gonna do about it. So we’ve seen some early pilots around the ability to do that and do that without much human intervention. But, you know, you think about if there’s a physical flow and a data flow, and a lot of what 3PLs do is a data flow, what are we gonna do in 2 or 3 years when the data can be managed by AI, right? All the transactional data. It’s gonna be about how we orchestrate, how we actually get more predictive. I read something on LinkedIn over the weekend where somebody said delivery will actually be the product in the future. Like, what you’re buying won’t matter. It’ll be the actual delivery is all that matters. When you get it, how you get it, how fast. And of course, we call that the Amazon effect. But, but what does the future hold for that? I don’t think we know.

Speaker 1 [19:18] Are you guys doing anything with drones? Is that—

Speaker 2 [19:20] We are using them right now mostly for inventory. Inside the warehouse? Inside the warehouse and really kind of piloting that. It has some of the same challenges we saw with RFID around density and what type of product it has. But we’re sort of really focused on maybe that’s the way to manage inventory integrity in the future instead of our fund cycle counting.

Speaker 1 [19:42] Yeah, it’s got to be better in terms of just safety because the drone can get up. You know, the worst— some of the biggest challenges in a warehouse in terms of claims is just people climbing.

Speaker 2 [19:52] That’s right.

Speaker 1 [19:52] You know, on higher equipment and falling.

Speaker 2 [19:54] Yeah.

Speaker 1 [19:54] So it’s gotta be a much better way. What are you most bullish about? Like, what is, what is, of all the things that you guys are involved in, this massive scale, what is the technology or thing that you’re most bullish on?

Speaker 2 [20:03] Well, it’s gonna be slightly different than you think. What I’m most bullish is I think people are back to actually thinking about supply chain as partnerships instead of transactional. You know, we go through these cycles of insource, outsource, should I use a 3PL, should I not? And I feel like people are back to, let’s make some bets About what I want to do in my business. What do I want to control? Is it product? Is it marketing? Is it manufacturing? And then what am I going to use my 3PL for? And I think then we have to have the technology to be able to be an integrated part of our clients.

Speaker 1 [20:36] Are you seeing any movement since the Montgomery decision with the Supreme Court? Has there been any, you know, some of the stuff we’re hearing is that shippers realize that there’s risks associated with it and they want one degree of separation. they want a much more robust vetting process. Is that creating demand?

Speaker 2 [20:53] It is. And I think for us, we’ve had a pretty robust— obviously we have French government ownership. And so I feel like from a compliance perspective, we have that robustness. It’s taking capacity out, as you well know. So that’s kind of the biggest challenge. But we continue to double down on the compliance that we had.

Speaker 1 [21:12] Yeah, I think the question is, how long does this cycle last? Any perspective on it?

Speaker 2 [21:16] Yeah, but it was time. I feel like I don’t know whether it’s a cycle or it’s whether it’s Or is it just a natural resetting of supply and demand? I’m sort of hoping the latter.

Speaker 1 [21:25] I’m saying it’s the latter. That’s what we— I mean, I think the cycle is an easy term, but we’ve called it a supercycle because it feels like we’ve got a long run. I love that you guys are owned by a railroad, by the way. I’m a huge fan of the railroad. Julie gives me a hard time about it. We love the railroad.

Speaker 2 [21:38] Chattanooga choo choo.

Speaker 1 [21:38] Chattanooga choo choo. We love some trains down here. So Laura, really appreciate you coming in.

Speaker 2 [21:44] Thank you.

Speaker 1 [21:44] Thanks for joining us. I love Nashville. I love what you guys are doing. I love Geotis. The, the brand that you’ve built over— you guys have built is just— it’s, it’s really fascinating.

Speaker 2 [21:56] Thank you. That was great. Great to be here.

Speaker 3 [21:58] Great to see you. Great to see you.

Speaker 1 [21:59] I’m sure your home is Tennessee. We’re big fans.

Speaker 2 [22:01] Exactly. Me too.

Speaker 1 [22:02] So appreciate it.

The post Supply Chain: Why Ocean Rates Skyrocketed 300% in 5 Months appeared first on FreightWaves.

July Manufacturing Data: Strong Numbers Signal Demand Boost

FreightWaves Staff — Tue, 04 Aug 2026 17:51:36 +0000

SummaryView Transcript

July’s PMI and ISM reports show incredible strength in manufacturing, with new orders up and customer inventories low. This data points directly to increased freight demand and a robust peak season ahead. Dive into the numbers and what they mean for the logistics industry.

July’s Purchasing Managers’ Index climbed to 55.6 — up 2.3% from June and the highest reading since May 2022 — while the ISM manufacturing index came in at 58.9, reinforcing signs of broad-based industrial expansion that could translate into stronger freight volumes through the remainder of the year, according to a FreightWaves SONAR update released Tuesday, August 4.

The figures matter to carriers, brokers, and shippers because they signal that manufacturers are running lean on inventory and will need to replenish — a dynamic that historically drives truckload and intermodal demand. Customer inventories in the ISM report registered 40.7, down 1.6% from the prior period, a level respondents characterized as too low.

Other ISM sub-indices reinforced the bullish read: production jumped to 58.5 in July, a 6.3% month-over-month increase, while backlogs rose 4.5% and manufacturing employment gained 3.1%. The PMI report also showed new orders increasing and manufacturing employment turning positive, set against a broader U.S. GDP growth backdrop of 2.8%.

“Orders are up. There is a need for replenishment in inventories. Backlogs are up. Everything is pointing to strength in these numbers and continued expansion in July, showing that we should be seeing some increased demand.”

On the labor side, 60% of ISM survey respondents said their companies are actively hiring, while the remainder said they are managing headcounts — a split that suggests manufacturers are cautiously optimistic rather than pulling back.

The SONAR analyst noted that capacity has not meaningfully re-entered the market, with tight supply stemming largely from regulatory pressure. That combination of rising demand signals and constrained capacity could accelerate rate movement if freight volumes follow manufacturing trends into the traditional fall peak. The analyst flagged the end of August as a potential inflection point to watch.

Separately, FreightWaves SONAR announced a new data partnership with Retlia to launch rtleg.usa, dubbed the Register, an index designed to give users a macroeconomic view of U.S. retail conditions. The index is now available in the SONAR platform.

July PMI rose to 55.6, up 2.3% from June and the strongest reading since May 2022, while ISM came in at 58.9.
ISM customer inventories fell to 40.7, down 1.6%, signaling a restocking cycle that could lift freight demand through peak season.
SONAR launched a new retail macroeconomic index, rtleg.usa, developed in partnership with Retlia.

Speaker 1 [0:07] Today’s sonar update. I’m going to focus on two things. Today is Tuesday, August fourth. One, an exciting new sonar development. We have partnered with Retlia to produce a new index, rtleg.usa. It’s called the Register, and it gives a view of macroeconomic. Retail conditions. So very cool. Check it out in the Sonar UI. The second thing I really want to focus on and talk about is the new PMI numbers and ISM numbers that were released yesterday for July. So the PMI for July is 55.6, which is up 2.3% above June and a record since May 2022. Overall, For the PMI, new orders increased, inventories remained too low based on sentiment, manufacturing employment turned positive. And all of this is really signaling economic growth on the backdrop of GDP growth at 2.8%. The ISM number came in at 58.9, customer inventories at 40.7, which is down 1.6%, showing they’re going to need to replenish and restock those inventories. Overall employment was up 3.1% in manufacturing. Production increased to 58.5 in July, which is 6.3% up. Backlogs are up by 4.5%. And of those surveyed, 60% said that their companies are hiring, while the remainder said they are managing headcounts. But overall, Orders are up. There is a need for replenishment in inventories. Backlogs are up. Everything is pointing to strength in these numbers and continued expansion in July, showing that we should be seeing some increased demand. You know, we’re not seeing capacity enter the market. This market has been really driven based on lack of capacity due to regulatory pressure. And this is signaling continued strength in manufacturing in our industrial economy. Which should continue to generate freight. Obviously, commodities coming in, finished goods going out, heading to DCs, and then eventually to retailers or to the consumer or the ultimate purchaser. So all of that should be generating freight and looking towards continued strengthening that we have been talking about and potential increased demand coming in the end of August and then through a normal peak season in the fall. So we’ll continue to watch it. But overall, all of the PMI and ISM numbers really came in incredibly strong. So excited to keep watching that. There’s a great article in FreightWaves on FreightWaves website that was released today, really detailing the outcome of this month’s report. So I encourage you to check it out.

Speaker 2 [3:01] All right. So a reminder that the Sonar update today is brought to you by RXO CapacityNow. So as we Hopefully see that continued increase in freight demand as we go through the rest of the year and into peak season. If your routing guide breaks down, if you need capacity now, be sure to reach out to RXO.

The post July Manufacturing Data: Strong Numbers Signal Demand Boost appeared first on FreightWaves.

Old Trailers, New Purpose: Warehouse on Wheels Reinvents Storage | FreightWaves

FreightWaves Staff — Tue, 04 Aug 2026 17:51:15 +0000

SummaryView Transcript

John Brooks, CEO of Warehouse on Wheels, shares how his company is revolutionizing industrial storage by repurposing end-of-life over-the-road trailers. Discover their rapid growth, cost-effective solutions, and how they provide critical flexibility in today’s unpredictable supply chain. Learn about their unique business model and the newly released Supply Chain Activity Index. #SupplyChainInnovation #LogisticsSolutions

Warehouse on Wheels CEO John Brooks wants to double his company’s footprint to 100 locations and 100,000 trailers, he told FreightWaves, building on a run that has taken the Houston-area firm from 2 locations and roughly 4,000 trailers when it launched in November 2017 to 37 locations and 35,000 trailers today, serving 6,000 customers across a network that now stretches from Montreal to Monterrey, Mexico.

The company’s model is straightforward: acquire end-of-life over-the-road trailers, repaint them, certify them federally, and rent them to manufacturers, retailers, and distributors as flexible storage at rates Brooks says run 2 to 4 times cheaper per square foot than traditional warehouse space. Contracts are 30-day evergreen agreements — not the five-, seven-, or 10-year leases typical of industrial real estate — a structure Brooks said is a key competitive advantage. The company targets an 8x return on invested capital over the life of each trailer.

“When we win a heart and mind, we rarely lose it. And so a customer may have 50 trailers, they may size down to 25 or up to 100, but they never really give up that solution once they’ve had a chance to experience what we offer,” Brooks said.

Warehouse on Wheels is preparing to open a Chicago location within two weeks, a market Brooks described as central to the company’s strategy of positioning assets along the eight major U.S. transportation corridors and in smaller towns adjacent to those routes. The company is backed by private equity sponsor Windpoint Partners, which came on board in 2021 after an initial partnership with Milton Street Capital.

Alongside its expansion, the company recently released a Supply Chain Activity Index designed to measure the flow of goods through the supply chain rather than serve as another pricing benchmark. The index draws on a basket of widely tracked indicators combined with on- and off-ramp activity across Warehouse on Wheels’ own trailer fleet. Scored on a 0-to-100 scale with 50 as neutral, the index registered 42.2 in June, indicating contraction. Brooks said he expects the July reading to improve but cautioned that conditions outside of AI-related infrastructure spending remain subdued.

“There is still a general malaise, in our opinion,” Brooks said, describing a “wait-but-still-move mindset” among supply chain operators who need to show quarterly growth to shareholders but are not making large inventory bets. He drew a contrast with 2018, when the first round of tariffs triggered a significant build-ahead in inventories, saying this cycle has instead produced smaller, more cautious purchasing decisions.

Operationally, Brooks said neither land nor used trailers represent a significant constraint on growth. The company typically needs only 3 to 5 acres of gravel per location, and the post-COVID used trailer market has produced ample supply from private carriers deflating and modernizing their fleets. Average rental periods currently run around 20 to 24 months. The company’s “55 and 55” standard — trailers must look presentable from 55 feet away at 55 miles per hour — governs how each acquired unit is refurbished before going to work for a customer.

Warehouse on Wheels grew from 2 locations and 4,000 trailers in 2017 to 37 locations and 35,000 trailers today, with a goal of 100 locations and 100,000 trailers.
The company’s Supply Chain Activity Index scored 42.2 in June, below the neutral level of 50, with Brooks citing a ‘general malaise’ in the goods economy outside AI infrastructure spending.
End-of-life trailers yield an 8x return on invested capital over their useful life, renting at 2 to 4 times less per square foot than traditional warehouse space on 30-day evergreen contracts.

Speaker 1 [0:00] We’re gonna talk about trailers. We like to call them warehouse on wheels, and nobody, nobody more than to call them warehouse on wheels named his company after it. John Brooks is the CEO of the company Warehouse on Wheels. Welcome, John. How are you today, sir?

Speaker 2 [0:14] I’m very good. Thank you all for having me. I appreciate it.

Speaker 1 [0:17] All right, so Warehouse on Wheels is trailers. Tell us a little bit about the business.

Speaker 2 [0:22] Yeah, so in 2017, I started the business with our first 2 locations and about 4,000 trailers. And today we’re at 37 locations and 35,000 trailers. We’ve built the business through a multitude of networks from now Montreal, Canada to Monterrey, Mexico. And our purpose is we take end-of-life over-the-road trailers and we repurpose them for flexible industrial storage into the supply chains of our 6,000 customers.

Speaker 1 [0:50] So the idea here is that these trailers that have are no longer, they may be roadworthy, but they’re no longer really in the best of shape to be roadworthy. You’re using them for storage. What’s the advantage of that over a traditional warehouse?

Speaker 2 [1:06] Yeah, so from an economic standpoint, we’re generally 2 to 4 times less expensive on a per square footage basis, and we only require a 30-day evergreen contract, so not a 5, 7, 10-year lease. So the unit economics clearly lean in our favor. And to your point, yes, the trailers are roadworthy. We take those trailers in, we give them a fresh coat of paint, a fresh Federal, so they’re safe, dark, and dry and ready to go to work.

Speaker 1 [1:31] What is the advantage? So cost advantages, but in other commodities, is there any commodities that work better for these trailers or is it all price?

Speaker 2 [1:41] You know, I think it’s a matter of just solving that short-term pain point in the supply chain. You know, You know, we’re all just one tweet away from our silent partners in Washington or some other disruption in the supply chain. And when that happens, that’s really when our assets show up and serve best, is solving that short-term need, that pressure relief valve, that easy button for the guys and gals on the dock that are dealing with issues every day.

Speaker 3 [2:05] Yeah, I think it makes a ton of sense. The flexibility there has to be incredibly beneficial. So you recently released a Supply Chain Activity Index. So can you tell us what it actually measures, what it does, and what prompted you all to come up with the index?

Speaker 2 [2:23] Yeah, we felt like we needed to share with the world kind of our view of the supply chain and how well or how things are performing, I guess. With 6,000 customers across a multitude of industries from automotive manufacturer to retail, we thought we had a view. And so our index is really designed to highlight the level of goods activity throughout the supply chain. It’s, it’s not another pricing index. And so what we did is we, we took a basket of measures that everybody already respects. I just saw it on the Sonar update. I’m looking forward to our July refresh because I think it’ll even be more positive. And then we compared that to the on-off-ramp activity within our own business, and we think that it forms a view of how the underlying supply chain activity and goods are moving.

Speaker 3 [3:09] So it runs 0 to 100, if I’m correct. 50 is neutral. June was— where was June? Oh, 42.2. I see it in the graphic. It’s hard to see. You said you’re looking forward to—

Speaker 1 [3:25] The lines are real small.

Speaker 3 [3:26] Yeah. Well, it says 42.2 very large. I know. It’s up there, but it is—

Speaker 1 [3:30] not just your eyes. Mine too.

Speaker 3 [3:32] I got new contacts yesterday. They might be worse. Anyway. So tell us, so we’re below neutral. So what does that mean for the supply chain overall? What are you expecting for July?

Speaker 2 [3:41] Well, I think it really lines up with even the headline that was in the Journal this morning about how our economy is almost becoming over-indexed to the AI-related infrastructure build. And so when you look through to the goods economy and think about housing starts and other just durable goods orders outside of the AI infrastructure build, there is still a general malaise, in our opinion. There’s a— I sometimes call it this wait-but-still-move mindset that people need to grow, they need to perform quarter over quarter for their shareholders, but no one’s making any real big bets. It’s a lot like the information you guys just shared from Sonar about inventory levels. They’re below ideal. And so, yes, I believe there will be a restocking as we build towards hopefully a more traditional peak season, but at this point, outside of those AI-related builds and components, there’s a general malaise out there.

Speaker 3 [4:34] So I want to continue to tie this together. Trailers being rented or then being, I guess, sent back to you, whatever the right words are for that, across your 37 locations. So why is that a clean read on freight flow as a whole versus just sort of inventory levels?

Speaker 2 [4:54] It’s definitely indexed to inventory levels for sure. But I think it also represents the lack of front-end flow. The fact that when you think about 2018, for example, the first time we dealt with this sort of tariff approach to things, there was a real focus and a real build-ahead, if you will, on inventories. Whereas this time, as the administration came back in and started implementing these things, I think people took a bit of a wait-and-see attitude. They would take smaller bites at the apple, but it wasn’t the big wave of goods. So in our minds, it’s an indicator of the totality of the activity within the supply chain from raw materials to ultimately getting it on the shelves.

Speaker 3 [5:38] So with it being sort of a relatively low number right now, still in contraction below 50%, I think it’s really interesting and I want your take on, despite that, you guys have had tremendous growth to 37 locations now and 38,000, 36,000 trailers I read. So how do you reconcile those 2 things?

Speaker 2 [5:58] Well, we’ve been consolidating the space first and foremost. I was a customer back in the day and saw an opportunity that I felt like this was a portion of the trailer’s life that was a bit neglected. There were a lot of small mom-and-pop players out there serving this use case of storage and local cartage, and we went upon the mission of building a bigger version of that. a national footprint, or in this case, even now an international footprint. So that’s really been the driver behind the growth. And then quite honestly, as we build brand and solution awareness and people come to understand the true economics of the solution, when we win a heart and mind, we rarely lose it. And so a customer may have 50 trailers, they may size down to 25 or up to 100, but they never really give up that solution once they’ve had a chance to experience what we offer.

Speaker 1 [6:48] John, what is the— you got shoes framed in the background. What is special about those shoes? They look like Air Jordans. Am I reading that right?

Speaker 2 [6:55] They are. Much to my wife’s chagrin, I have a Jordan problem.

Speaker 1 [7:00] Okay.

Speaker 2 [7:01] And I’m pretty sure it’s ’cause I couldn’t afford ’em as a kid, but those are actually custom Warehouse— oh, the wrong way— custom Warehouse on Wheels Jordans. And I couldn’t bring myself to wear ’em and scuff ’em up, so they’re a great conversation piece with my management book there from Michael Scott as well, ’cause I’m a big Office fan.

Speaker 1 [7:17] And you’ve got a bunch of, it looks like trucks in the background too, a nice toy collection.

Speaker 2 [7:21] So each time we buy a brand, we have kept that regional brand. And so that’s the family of brands under Warehouse On Wheels. So our customers know us as Meisler Trailer Rental, First In Trailer Service, Advantage Trailer Rental. So Warehouse On Wheels really represents at this point the holding company of that family of brands.

Speaker 1 [7:39] That’s kind of fun. You do a deal, a transaction, and you get a new toy. There you go. I think that’s every man’s dream is like deal, business, let’s make some money. Well, it’s better than a diltoy. You know, those that don’t know what a diltoy is, like a plaque. This is actually even cooler.

Speaker 2 [7:54] A tombstone, yeah. I’ve got enough of those too from my 7 tours with different private equity firms, but yeah, I like the trucks better.

Speaker 1 [8:00] Now, are you guys private equity backed, or did you found it and funded it yourself?

Speaker 2 [8:05] So we’re private equity backed. We’re on our second sponsor. So myself and a group called Milton Street Capital outta Houston started building the business together, and then in 2021, we joined forces with Windpoint Partners, our current sponsor.

Speaker 1 [8:19] Is it harder to find the land? Is that the big issue, or is it the trailers themselves that are the sort of growth constraint?

Speaker 2 [8:25] To be honest with you, neither are that hard because when we go to a market, we generally only need 3 to 5 acres of gravel. It’s pretty simple. And then the used trailer market, now that we’ve come off the COVID abnormalities, there’s a plethora of used trailers in the market. And so that’s really our sources. We’re buying from the private carriers as they defleet and then modernize their fleets.

Speaker 1 [8:48] And would you, in terms of picking a new location, other than, I know you’re buying existing locations, are you scouting out new locations that you guys will open?

Speaker 2 [8:56] Yeah, we just launched. We’ll launch in the next 2 weeks in Chicago, of all places. We’re kind of slow to get there, but really, you think about us along the 8 major corridors of transportation, and then probably in smaller towns just adjacent to those main thoroughfares. That’s really where we thrive.

Speaker 1 [9:13] John, you’re a brave man to put an industrial asset in Chicago, but it is the epicenter of freight, not as big and important as Chattanooga is, but it is certainly up there. Right, totally agree. In terms of growth, what is the constraint on growth? Is it capital? Is it customer demand? What slows you guys down?

Speaker 2 [9:39] Yeah, I mean, I think we’ve got to be good stewards of the capital. Again, we’re private equity owned, so there’s not an infinite checkbook, but I think for us, there’s really been little to no constraints. I mean, to go from 2 locations in roughly essentially 2018, we started in November of ’17, to 37 today, I think is a real testament to what the model can be. And my vision for the organization is 100 locations and 100,000 trailers, and that’s what we’re building towards.

Speaker 1 [10:06] Wow. And then do you have any metrics you can share with us in terms of what a trailer does in terms of monthly yield or annual yield?

Speaker 2 [10:13] Yeah, absolutely. So, you know, the way we do things and operate, you know, we’re generally providing kind of an 8x money-on-invested-capital return on these trailers. So we’ve really built quite a mousetrap that I’m pretty proud of and something that we’re continuing to scale.

Speaker 1 [10:31] So 8x, is that over the life of that trailer? Yes, over the life of the trailer. So when you’re looking for, When you’re buying an asset, you’re looking for it to basically yield 8 times what you guys invested.

Speaker 2 [10:42] Absolutely. And if you think about it, our use case is so much different than the over-the-road. The trailer rolls to the site, it gets loaded, it’s generally stored close to the site, or maybe comes back to our yard to be stored. So it really minimizes the wear and tear on the asset, which allows that asset then to have a substantial useful life under our ownership.

Speaker 3 [11:01] But John, does it make so much sense? Because at that point in the life of the asset is when the maintenance costs begin to rise, right?

Speaker 2 [11:07] Yeah.

Speaker 3 [11:07] But you’re not gonna have to do nearly as much.

Speaker 1 [11:09] It’s a great business model.

Speaker 3 [11:10] I’m really into it. Yeah, as long as they are watertight.

Speaker 1 [11:12] Well, that’s the thing I was wondering.

Speaker 3 [11:15] And he mentioned that.

Speaker 2 [11:16] Safe, dark, and dry is what we like to say.

Speaker 3 [11:18] Say it again. What? Dark and dry?

Speaker 2 [11:20] Safe, dark, and dry.

Speaker 3 [11:22] Safe, dark, and dry.

Speaker 1 [11:22] So I am just curious, is there certain commodities that this isn’t ideal for? Obviously, a fridge isn’t.

Speaker 2 [11:29] Yeah, anything temperature controlled really doesn’t fit for us, but Again, we’re supporting everyone from automotive manufacturers through apparel production through to retail. Plastics manufacturers are a big customer as well because, again, in that business, a lot of times it’s optimizing the raw material input, so playing the commodities market, and then optimizing the throughput volume so you don’t have to change over tools and so forth. That trailer flexibility to allow you to store that staged or even finished product Gives you a tremendous lever to play as you manage those other key components of your process.

Speaker 3 [12:04] I don’t even think through the course of them, even through the course of a month, it would be like, you know, end of month, end of quarter, getting it off your yard and into one of these trailers wherever it needs to go. Like, I would think the flexibility has got to be the biggest selling part.

Speaker 1 [12:17] Brilliant. John, I imagine permitting is so much easier than building a physical building, particularly in certain districts where they don’t, you know, they’re not welcoming industrial real estate. You have the advantage of, you know, you have portable units and they’re classified as trailers. I imagine that gives you an enormous amount of advantage in permitting.

Speaker 2 [12:35] It absolutely helps. We’re actually, we’ve got our Ecovadis score, so we’re recognized as an environmentally friendly solution because not only are we helping you avoid the construction of the warehouse and the infrastructure and all the burden that goes with that, we’re also helping to keep some of these trailers out of the scrapyard, relatively speaking. And so Again, viewed very positively from an ESG standpoint. I like to say that we make the procurement guys happy, we make the CFO happy, and we darn sure make the operators happy.

Speaker 1 [13:03] One man’s junk is another man’s treasure. That is the great thing here is these old units. I have to imagine, John, if we went to one of your yards, we would see some old school trucking names out there. Like, you know, we used to own a company called Paragon Leasing, which is a trailer leasing company. Occasionally, Julie, around town you’ll see a Southwest Motor Freight trailer that’s out there. It always makes me happy. Usually it’s been stripped.

Speaker 3 [13:28] Yeah, and you could just still see like the— Yeah, the ghost.

Speaker 1 [13:32] Yeah, the ghost of the freight.

Speaker 2 [13:33] Well, I have a rule.

Speaker 3 [13:34] It’s—

Speaker 2 [13:35] I have all these Brooksisms, as you guys will get to know me, and one of them is 55 and 55. I want the trailer to look good at 55 feet away and 55 miles an hour. So we give it a fresh coat of paint all the way around, a fresh branding, and then a fresh federal. So again, back to my earlier point, it shows up safe, dark, and dry, ready to go to work, and it needs to look good from that distance.

Speaker 1 [13:55] So those ghosts of trailers past, those libraries that are gone on to— are, are no longer there?

Speaker 2 [14:01] Our intention is to cover those up. Now, will one slip through the cracks? And, and with all our acquisitions, quite honestly, there are some trailers we’ve probably acquired that I haven’t even seen yet in our hold period because they stay on rent that long. Our, our average rental period right now is probably about 20, 24 months. So, wow.

Speaker 3 [14:17] And can those shippers transfer those between different facilities of theirs, or is it for a specific location?

Speaker 2 [14:24] They’re licensed and federally certified, so they can roll on the road, and we’ll help move them for them if they need us to.

Speaker 1 [14:30] Amazing business. I love businesses that just require creativity, brilliance, leverage capital, recycling. John’s got an amazing business. We’re big fans of yours, John, here. I am.

Speaker 2 [14:44] Well, I am fans of yours as well. What you guys have built here and the service you provide to those of us in the space, I honestly am sincerely grateful for that.

Speaker 1 [14:52] Well, likewise. Well, if you get ahold of an old Roadway trailer, just give us a holler. I’m looking for one. I think those are cool. I’ll send you pictures. I want the OG one, not the YRC one. I want the old school Roadway. And it’s really its prime right before the big acquisition. John, thank you so much for coming on Freightways Today. We’ll have to have you back.

Speaker 2 [15:13] Thank you all very much.

Speaker 1 [15:14] Have a good day.

The post Old Trailers, New Purpose: Warehouse on Wheels Reinvents Storage | FreightWaves appeared first on FreightWaves.

Freight Rates AREN’T Falling: Industry Vet’s Bold Prediction & Advice

FreightWaves Staff — Tue, 04 Aug 2026 17:50:47 +0000

SummaryView Transcript

Freight rates are a hot topic, but one industry veteran says they’re not going down. Kevin Nolan, Founder of Sopa Creek, shares his candid insights on the state of freight brokerage, why he’s bullish on C.H. Robinson, and how recent ‘nuclear’ legal judgments are reshaping the industry. He also offers essential advice for brokers navigating carrier vetting, factoring, and tracking to stay competitive.

Freight rates are not going down. That is the blunt assessment of Kevin Nolan, a serial freight brokerage entrepreneur who has started multiple billion-dollar-plus companies. Speaking in a video interview, Nolan said unprecedented mid-summer contract re-rating activity and tender rejection rates still in double digits confirm the industry is in the earliest stages of a freight market recovery — not a false start.

“Contract rates lead everything,” Nolan said, explaining that RFP pricing has historically occurred in October and November. The fact that re-rating has been allowed in July, he argued, is a signal shippers recognize they quoted too low in prior cycles and are now willing to accept higher rates. “I feel pretty good about freight rates for the next eighteen months,” he said.

Nolan pointed to tender rejection data as further evidence. He noted that rejections dropped from 17% to 14% in August — a level he called elevated and unusual for that time of year. The decline, he said, reflects mini-bids being settled at mutually acceptable contract rates rather than a softening market. “In August, guys. I don’t know if that’s ever happened,” he said of the 14% reading.

“Freight rates aren’t going down. Okay. That’s what I’ll tell you. Freight rates are not going down.”

On the legal front, Nolan weighed in on the $604 million nuclear verdict against C.H. Robinson in Texas, calling it a seismic event for the brokerage industry. He noted the verdict followed the Montgomery decision and came only three months later, and said Robinson would have to fight the judgment rather than settle — because a settlement at that figure would effectively invite further litigation industry-wide. Despite the legal overhang, Nolan said he bought more C.H. Robinson stock the week of the verdict, citing the company’s roughly 60% stock gain over the prior 18 months and its standing as the largest freight broker in the industry.

Nolan also warned that insurance costs represent a growing and unpredictable line item for brokers — one contributing to investor uncertainty across the sector. He offered a practical vetting framework for carriers: look at which insurance company covers a fleet, since major insurers conduct on-site safety and hiring reviews before binding coverage. He added that 90% of truckers use factoring companies, making those relationships another useful proxy for carrier quality. Length of time in business and red flags like a two-week-old MC number or a generic Gmail address on a load confirmation were also cited as warning signs brokers should not ignore.

Nolan was critical of the influx of capital and new entrants into freight brokerage from 2019 through approximately 2024, arguing that operators willing to lose money — he cited an example of losing $800 moving a load of beer — drove a race to the bottom on rates without improving the industry’s fundamentals. He said that era contributed to the prolonged freight downturn and that its unwinding is part of what is now setting the stage for a sustained rate recovery. Nolan also noted that freight and logistics, including international shipping and warehousing, still represents more than 27% of GDP, making it one of the largest and most fragmented sectors in the U.S. economy.

Nolan says unprecedented July contract re-rating and 14% tender rejection in August signal a real, early-stage freight market recovery with rates rising over the next 18 months.
Despite the $604 million nuclear verdict against C.H. Robinson, Nolan bought more company stock, citing its roughly 60% gain over the prior 18 months and its market-leading position.
Nolan advises brokers to vet carriers by insurance provider and factoring company rather than FMCSA safety ratings, which he says are no longer reliable selection tools.

Speaker 1 [0:00] Our guest Kevin Nolan will be up here in a bit to tell us all about the chaos that has become freight brokerage, his perspectives. There’s no better entrepreneur that has started multiple billion-dollar-plus companies than Kevin Nolan. Kevin, are you with us, sir?

Speaker 2 [0:17] I am. How you doing? Good to see you guys.

Speaker 1 [0:20] I gotta ask, what’s the tie? I don’t even know if this is the same Kevin Nolan.

Speaker 2 [0:23] I told you guys when I saw you in Cleveland that freight brokerage is changing, right? We’re getting a little A little more dolled up, and no, it’s a big. It’s a big day to come on and be with you guys, and you know, got to show the industry some respect. It’s it’s done me pretty well.

Speaker 3 [0:41] I love it. Keeping your word, you said you were going to clean up your clean out brokers needed to clean up their act and look like professionals, and you’re really doing it.

Speaker 1 [0:48] He he did.

Speaker 2 [0:49] It’s Kevin.

Speaker 1 [0:51] I mean, the thing I love about Kevin is that you are very blunt. and your statements, high energy and not afraid to say what’s on your mind.

Speaker 2 [0:59] Yeah, look, I think, I think in an industry like ours that has so many moving parts and so many different things that are going to happen, you don’t really have time for the BS. And, uh, you just, you gotta, you gotta get better every day, but you gotta call out what’s the problems and you gotta look in the mirror. And if you don’t, then, you know, you’re not going to last long in this industry.

Speaker 1 [1:24] So Kevin, you started at CH Robinson. I think you and Drew Wilkerson, the CEO of RXO, were in the same office together. Is it— did I get that right?

Speaker 2 [1:32] We were there at different times, but we were trained by the same, uh, group of men and women that were in the Columbia, South Carolina branch. And, uh, you know, that is a true freight brokerage entrepreneurial spirited office that was in Columbia. We had 2 managers there, Mike Borwick and another one named Kevin Harthin, that, uh, You know, they taught us how to broker freight the right way, be good leaders as well.

Speaker 1 [1:56] Well, there’s obviously something right about that because 2 of the largest top 5 freight brokers came out of that office, which is pretty astounding, the fact that you guys have done so much. Speaking of C.H. Robinson, Kevin, I gotta ask, all of the— we have the Montgomery decision, we’ve got the lawsuit in Texas. What is the state of brokers? How, how are brokers thinking?

Speaker 2 [2:20] I mean, look, I’ll be straight up. I bought more of the stock last week, right? You know, they’re the best at what we do. Uh, maybe they could clean up their bedside manner a little bit, not talk about cutting jobs so much, not talk about AI so much. But when it comes to the biggest and the best freight brokerage in the industry, you know, that’s C.H. Robinson. And, uh, You know the verdict? It’s nuclear, right? That’s the word everyone’s using. 604. It’s nuclear. What happens in a verdict like that? You know, or a bomb that’s nuclear. You kind of take inventory. You look around and you say it feels a little off. But you know, CH feels pretty confident that they’re going to be able to work through that and that the driver was not an employee. But yeah, lots going on. But I bought more, you know. And if you look at Robinson. over the history of time on the stock chart. It’s a beautiful chart going up to that upper right quartile. And, you know, the last 18 months, I think it’s up 60% or so. So, you know, maybe, you know, you got a little bit of a return to the mean with the verdict. And maybe we had some people in the industry that wanted a reason to leave. You know, they should have just called me and I would’ve held the door open.

Speaker 3 [3:35] But—

Speaker 1 [3:35] Well, it does feel like Wall Street, I mean, this is not just CH, but all of the major transports, the truckload operators as well, Even when they were talking about how we’re early in early innings, the fact that we’re early didn’t seem to dissuade Wall Street. It felt like it was a sort of— they’ve moved on from transportation. That’s one of the reasons I think CH has been beat up is just largely because there’s a sentiment against transportation in the cycle and how Wall Street’s perceiving it.

Speaker 2 [4:05] Yeah, look, we’re over— if you take in international shipping, warehousing, everything else, I believe we’re still over 27% of GDP. Maybe healthcare is the only one that’s larger and more fragmented, but it’s a great place to play and have fun, and it’s, it’s been very good to me, and I’m excited about the industry. It’s actually younger than me if you take out deregulation from 1980, so, uh, or if you, if you factor that in. So look, I, I’m excited about the space. Um, I think some people needed a little reason to maybe take some profits or some chips off the table, and That looked like a reason and a little bit of, you know, un understanding or you know maybe just saying there’s some uncertainty in there. And you know investors they love certainty, and so I like uncertainty. I’m a speculator player, so I’m pretty I’m pretty excited about not obviously about about the 604 or that verdict or anything else, but I’m excited that maybe some of the fakers that came in the industry from 2019 to 2000. ’24 or so, you know, they didn’t help our industry. Yeah, all that money that came in, I don’t know how much— I, you know, it made us better technology-wise, um, it brought us more attention, but it didn’t help in the, in the sense of freight rates, right? That did not help.

Speaker 1 [5:26] It was a race to the bottom. I think freight brokers, in many ways, they— it was a race to the bottom. Brokers chased the market down. That’s what they would do. And I’ve said, if I were in the shoes of a broker, I would have done the same thing. Obviously, truck drivers don’t want to hear that. But the reality is a lot of the bottom feeders and talking capacity, folks that were not regulated or taking advantage of the lax of regulation enforcement really brought this industry to its knees. But it feels like there’s a massive backlash now in Washington, even among the larger motor carriers that may have pushed for some of that deregulation, have realized what they’ve done.

Speaker 2 [6:02] Yeah, look, 2021, 2022, crazy times. You know, I think that— and also there’s, there’s just a certain amount of accidents that happen with all these moving parts. And then you had so many new people that came in that hadn’t really operated in the environment, had elevated costs, and all they cared about was top line, right? How many loads I could get. Even if you’re losing $800 moving a load of beer, like, that’s a lot of risk you’re taking, right? And I don’t know what you’re trying to accomplish other than showing that you got some load count, but You know, it doesn’t make sense to lose money if there’s risk that’s that’s involved in this business, right? In the short term, you might do it because you’re in a contract and you gotta balance out and find new capacity, or then wait and talk to them. But you know, long term, losing money at cheap freight is just doesn’t make sense.

Speaker 3 [6:55] Yeah, I mean, obviously, I agree. We’re seeing those brokers get squeezed in. We’re seeing the capacity exits. So we talked about all of the earnings are saying we’re in the early innings. The freight market is still early in this recovery. What’s your take on the freight market for the rest of this year and next year?

Speaker 2 [7:10] So contract rates lead everything, right? And contract rate pricing happens October, November historically. Well, in the last 3 months, contract pricing has happened. There’s never been re-rating that’s been allowed in July. So while everyone thinks this might be a false start or it’s oil driven or whatever else, we are in the early, early stages. Because I know the RFPs that I’ve seen or are involved in, you know, you remember that you quoted last year way too low and tender rejection is so high because contract rates were not right for the year and weren’t able to be carried on. And so, you know, I think when October and November, when pricing comes around and shipping managers want to lock in good capacity, you know, they’re going to be way more open to rates That are higher compared to the last three or four years. So contract sets the industry, and then whatever gets rejected, then that’s the basis for the spot market. So you know I feel pretty good about freight rates for the next eighteen months.

Speaker 3 [8:14] Yeah, we’re hearing a lot more mini bids are happening as well. Are you in order to?

Speaker 2 [8:20] That’s why your tender rejection is falling, right? Because contract is now acceptable. Right. The shipper and the broker or the shipper and the carrier have met and said, look, I want to work with you, but I need to work with you at this price. And the shipper says, okay, now. So, you know, you’ve seen it, but it’s still, it’s not a huge, it’s not a huge amount because tender rejections are still in double digits.

Speaker 1 [8:42] But, um, yeah, we dropped from 17% to 14%. So there’s still, these are still elevated.

Speaker 2 [8:48] In August, guys. I don’t know if that’s ever happened. You know, back to school is cool, but it’s not that cool. I was moving my daughter into her place at Alabama. It was pretty busy at Target and Home Depot and all those places, but not 14% tender rejection.

Speaker 1 [9:01] That feels like she might get banned from the state going to Alabama. How are you going to— like, what’s the story there?

Speaker 2 [9:09] Oh man, I love it. Roll Tide. Yeah, I’m a Bulldog. OTR still advertises like crazy, and a lot of my leaders in my businesses are from Georgia. But my daughter walked on that campus and said, Dad, this is home, and I want to go here. So you got to cheer for your money a little bit, Craig.

Speaker 1 [9:26] Yeah, I know. My wife is a Bama person. My son is at Baylor. He followed in my footsteps. So, sic ’em Bears. So Kevin, the state of freight in terms of brokers have been put on notice, whether it is accepted, whether it is something welcome or not welcome. The fact is everybody’s on notice. And it started with the Montgomery judgment, which was unanimous. Followed by the fact that only 3 months later, we had the largest nuclear judgment in trucking history that’s going to be paid out. It was $900 million, but the company didn’t even exist. It’s interesting that a broker was involved in it. No more bigger broker than C.H. Robinson. It feels like these judgments, these nuclear lawsuits are just going to keep piling up because juries seem to have a lot of sympathy for plaintiffs. When there’s a broker involved. What are your thoughts there?

Speaker 2 [10:19] I mean, look, plaintiff attorneys, they’re some of the best businessmen and women I’ve been around, right? They don’t take things unless they feel like they’re going to make money on them. They only get paid if they win. They are smart, so they’re going to look at the chain of events. The broker is part of that transaction, but so is the shipper if we want to talk about tender rejections. Was there a carrier that fell off that made everyone have to scramble? I don’t know. I just, I think there’s that there are so many moving parts in a load that the plaintiff attorneys are finding more and more aspects of it. And you know, brokers, look, it’s about who you work with. It’s about making good decisions. Shippers, same way. Shippers need to make sure they’re working with brokers that can handle and have defenses and have safety in place and all of these aspects of the business that are very important. You know, carrier selection. You know, my carrier selection men and women, they know that sometimes I get angry at them because they’re limiting capacity, but they’re making right decisions. I say they protect the house, right? You know, and so, you know, and like the other thing that’s so crazy as a broker, we have to manage new line items we’ve never managed before.

Speaker 3 [11:34] Fraud.

Speaker 2 [11:36] Up until about 4 or 5 years ago, I didn’t have to put, you know, more than 9 digits, 10 digits in fraud on my budget. Now insurance costs. What am I— what’s that line item going to be? It’s one of the reasons why investors are a little spookish because they don’t know, you know, what brokers are going to have to budget for in insurance. So I don’t think it’s stopping. Again, there’s a certain amount of miles that are run, and in those miles accidents happen, and brokers are part of those miles that are run. And so, you know, there’s just— these accidents are going to happen, and you have to make sure that you do what you can to get the right safe people on. And then when they do happen, you know, you handle it. And again, you know, you care about the accidents, you care about the situations that happen, and And you try to, you try to make things right.

Speaker 1 [12:34] Do you, what do you think insurance is going to do? I mean, there’s been so many speculation I’ve heard, you know, this is right after the judgment. I don’t know this has actually played out, but as much as increase of 10x was sort of the extreme.

Speaker 2 [12:46] Freight rates aren’t going down. Okay. That’s what I’ll tell you. Freight rates are not going down. Who you pick in terms of putting on that load. Look at who vets it the hardest. Insurance companies. If they’re with a Great West, yeah, it’s Cadillac’s probably a great trucker on that, right? If they were sold Progressive out of somebody’s apartment because you knew them and this or that, I mean, like you gotta pay attention to who the agent is, not only the market.

Speaker 3 [13:16] All right.

Speaker 2 [13:17] Secondly, factoring companies. 90% of truckers factor. You know, you’re giving them money if you’re a factoring company. How much, you know, look and see and just have these feelings of like, not all trucks are equal just because they came off of a load board or called in or whatever else. Like, they’re not equal. And so you have to really pay attention and use the tools that are out there to look because the government has come out and said what’s on the FMCSA, don’t use it to judge. And I’m like, well, why have the ratings? Why have a satisfactory or a conditional or whatever else if it doesn’t matter?

Speaker 1 [13:55] But I mean, they literally— the jury in the C.H. Robinson case, which we, you know, likely gets thrown out on appeal, there’s some weird technical—

Speaker 2 [14:03] I thought the plaintiff attorney didn’t like 604. He would have liked an 80, right? Or a 70. But 604 is like, man, well, it forces C.H. to—

Speaker 1 [14:11] I mean, C.H. has to go all the way. Like, they have to go all the way.

Speaker 2 [14:15] Because if they don’t, I mean, everyone does, right? Like that, that’s a, that’s a, okay. $604,000 was, we’re in this for 7 more years together. Let’s all hold hands, guys.

Speaker 1 [14:24] But the interesting thing was, if you, if you look at that, the jury decided that there was something like, and I don’t remember the exact number, but 28% responsibility for CH Robinson. And if you took and multiplied the $604,000 by that number, it came out to right at CH Robinson’s insurance limit, which I thought was A really interesting tell that almost the jury was like, hey, let’s go after the insurance number and let’s try to maximize this for the family. That’s at least what I read into it. I don’t know if it was that intentional, but it’s very suspicious.

Speaker 2 [14:55] Texas has a lot going on in, in, in big jury, uh, settlements. And, you know, again, plaintiff attorneys are great businessmen and women, and they want to pick what field to play on. And they That wreck happened in Mississippi, but it was, you know, the jury was in Texas. So, you know, again, I don’t, I control what I can control and that’s working hard. That’s, you know, getting deeper with our customers and carriers and trying to provide products and services for them to stay on the road and keep moving loads so we can continue making money. But yeah, there’s some uncertainty that’s coming from this. And, you know, look, I’ve been in the game for a long time and I’ve seen a lot of crazy things come in and out of our industry. This one is is one that definitely kind of put a cloud over the industry for the last I don’t know call it a week or so, but C.H. Robinson had its best quarter ever. The brokers that I’m hanging out with and talking to feel pretty good about their business, and so you know if we’ve got to put a certain amount per load aside for you know things that are going to happen in a certain amount of miles that are run like okay maybe maybe we got to put more money aside for all of this and uh. You know, again, I like her.

Speaker 1 [16:09] I really like his, uh, conversation about insurance carrier-specific vetting. Which insurance company is the fleet with? Because that may tell you a lot about how the insurance company— because you can’t— I mean, even in the CH case, best bettors.

Speaker 2 [16:25] I mean, I got, I got sales guys that are trying to push insurance through to all kinds of people for truckers, and they are the best vetters at the truck insurance companies because They are, you know, vetting and working and talking to these truckers. I mean, the big ones, if they have a certain number of units, they go meet them, they go on site, they look at their safety, they look at their hiring practices because they’re putting their necks on the line as an insurance company. So I love vetting by insurance. Little secret. I’m sure my carrier relations team is gonna be like, why’d you tell them your secrets?

Speaker 1 [16:59] Yeah, everything.

Speaker 3 [17:00] No, I think that’s great. No, that’s what— that’s actually what I was going to ask. Right. So if we can’t go by the FMCSA safety rating, right. We’re saying that that doesn’t work anymore. They’re satisfactory. It doesn’t matter. Uh, what, what should brokers go by? So I think that’s a great, a great tip. Look at their insurance provider, look at their factoring provider. What else should they be using?

Speaker 2 [17:20] I mean, look, length of time in business, right? Loading someone who’s got an MC number that’s, that’s 2 weeks fresh, like that’s, that’s crazy, right? And during, during, you know, peak times and peak, you gotta make decisions and everything else. But in that situation, You know, maybe you ask other brokers, you know, hey, how many loads have you done with this carrier? Hey, you know, this email and number that’s come in, you know, it’s bigtruckin462@gmail.com. You know, I’m about to send them a load con. Does that make sense? Probably not. But, you know, you might want to double check. So again, I would say, you know, look at, look at everything you can look at. There’s a lot of great products and services that are out there. I think, I think the way we talk to truckers Is going to change over time, whether it’s you know using a third party to do your track and trace for you. But track and trace is a huge part of freight brokerage because you know we have to know just like when you’re following that Uber driver to your door or Lyft or whatever else, you’re like hey he’s a little far, he’s not gonna make it. I’m gonna be late to the wedding if I go with this guy well or girl. And then it’s like hey if I try this truck, I’m not gonna make delivery. So I got this guy’s you know way too far away. I gotta find another one. So Tracking and tracing is a very important part of the business. The truth of the matter is like less than 5% of the loads after pickup probably need some kind of human interaction, but we’ve, you know, because of the fragmentation, I think we’ve spent a lot of offshore expenses, a lot of third parties or whatever else. Track and trace is a huge part of the brokerage business. How it’s done, I believe, needs to be maybe agreed upon by the shipper and the broker. upfront before the loads, you know, picked up.

Speaker 1 [19:13] Well, it’s so much to— I mean, this is a whole new world we’re in. Hey, Kevin, you got 5 trucks behind you. I see the NAPA, good old Atlanta company.

Speaker 2 [19:21] I got a bunch. I got a bunch.

Speaker 3 [19:23] Check them out.

Speaker 1 [19:23] Oh, we got more. Okay, so let’s— who do we have? Is that Estes at the top?

Speaker 2 [19:27] No, this is GTE, which is a, you know, an old school trucking company, reefer group, no longer in business. Coca-Cola, proud to say.

Speaker 1 [19:36] And TTA. Okay, I thought that looks like an Estes at the top. I can’t see it.

Speaker 3 [19:39] It’s not zoomed in.

Speaker 2 [19:41] This guy, Waffle House. Is that a Waffle House? Waffle House truck and Coke. We’re gonna put that there.

Speaker 1 [19:47] I see. Okay, good.

Speaker 2 [19:49] Good spot. All over the place with Atlanta. Jimmy Dean sausage, Pillsbury, Napa, Coca-Cola. The Napa CEO came in. He was here for a meeting and he was like, you don’t have one of my trucks. We got to put it up.

Speaker 1 [20:04] Kevin, you got a lot of food there. Diversity or Waffle House? Which is it?

Speaker 2 [20:07] Waffle House all day long.

Speaker 1 [20:09] All day long. Cracker Barrel?

Speaker 2 [20:11] Cracker Barrel’s a good brand, I gotta tell you. I actually was— when they, uh, when they had that fallout, I was gonna try to put a group together to buy that thing. That is a great brand.

Speaker 1 [20:22] We’re big fans of— I’m a big fan of Cracker Barrel over Waffle House. I’ve had too many experiences at Waffle House, we’ll say. Kevin Nolan, thank you so much for joining us, uh,

The post Freight Rates AREN’T Falling: Industry Vet’s Bold Prediction & Advice appeared first on FreightWaves.

HappyRobot Series C mints FreightTech’s newest unicorn

Thomas Wasson — Tue, 04 Aug 2026 16:57:32 +0000

FreightTech has a new unicorn, and it took 20 months to build.

HappyRobot closed a $150 million Series C at a $1.2 billion post-money valuation, putting a price on the idea that AI agents can absorb the phone calls, emails and follow-ups that move freight. Prysm Capital led the round and Eurazeo co-led, with existing investors including a16z, Y Combinator, Koch Disruptive Technologies and WaVe-X, the corporate venture capital arm of Austria’s WALTER GROUP, coming back in.

The pace behind the valuation is significant. HappyRobot has raised roughly $200 million across three rounds in 20 months, growing 5x since its Series B closed in late 2025. It now runs agents inside more than 150 enterprise customers, including DHL, Uber Freight, Kuehne+Nagel and Austria’s LKW WALTER.

For WaVe-X, the round produced a first. HappyRobot is the first unicorn in its portfolio of 13 investments.

“HappyRobot achieving unicorn status so quickly is a tremendous milestone, not only as our first portfolio unicorn, but also as proof of how rapidly agentic AI is transforming the real economy,” said Michal Lewandowski, senior investment manager at WaVe-X.

What that means for brokers, carriers and forwarders watching the category: the agents are past the pilot stage. At the WALTER GROUP alone, five to 10 use cases are live across dispatching, payment collections and customer support, and the company is redrawing its operating model around them.

Inside the HappyRobot Series C: $200 million in 20 months

The three-round schedule is compressed even by AI standards. Andreessen Horowitz led the Series A on a handful of proof points at Circle Logistics and Uber Freight, both early adopters. The Series B brought the enterprise names.

“The earlier rounds seem like more of a bet on the future,” Quili Peña, head of strategy and operations at HappyRobot, told FreightWaves. “The growth rounds, which are the ones that we’re entering now, are more fuel to continue to deliver the value.” Peña helped lead fundraising for the rounds.

That shift showed up in the customer list. “Starting to hit the stride in our Series B, we started to get a lot of those enterprise contracts and enterprise relationships with some of the largest customers like DHL or even the Walter Group, which has allowed us to really secure this level of funding,” he said.

His framing of the stretch illustrates its significance. “We’ve gone from a promising startup to the consolidator leader in the supply chain space. And you are only able to do that when you have the enterprise backing.”

Why freight AI agents won the enterprise deal

HappyRobot sells a platform rather than a single automated workflow. That distinction is what the company says sets it apart from competitors.

The company lands with one or two scoped use cases and expands from there. “The minute that we prove value to the customer, our platform and our technology, which encompasses all the context of the agents doing the work, allows us to add new use cases and continue to drive that transformation as a real partner,” Peña said.

At the WALTER GROUP, that has meant five to 10 live use cases spanning customer support, payment collections, dispatching and general operations. “Really across the board,” he said. “Not a single point solution, but a platform that allows for the enterprise to build their agentic workforce on top of.”

Thomas Muscher, managing director of WaVe-X, spent nearly 30 years inside LKW WALTER before moving to the group’s venture arm. He has watched most of the field try the narrower version.

“There are dozens of AI or agentic AI startups on the market, and I’ve seen a lot of them, and the majority of them can solve a single topic,” he said. “You just do this one phone call to get information and pass it on to a human again to work on it.”

Replacing not a task, but a chain of tasks

What separated HappyRobot, in Muscher’s reading, was the length of the chain it could take over.

“There is a topic, there is a challenge to be solved, and not only a task to be done,” he said. “And this challenge can consist of several emails, several considerations, calculations, seven phone calls, and finally there’s a decision to be made. So it is not only replacing one task. It is an entire chain of various tasks, to cover a significant part of the entire operation.”

The relationship started with two unrelated introductions roughly two years ago, one from LKW WALTER and one from WaVe-X’s venture network. “Someone said, ‘Hey, there is a company in the US, Spanish guys are trying to revolutionize the market,'” Muscher said.

A demo followed, then a meeting at Manifest in Las Vegas, then the investment. After it closed, WaVe-X had to support its own sister company to move. “From this moment when we are invested we are actually fighting for the startup to get the contract, to get the connection, to grow,” Muscher said.

Regular cooperation began late last year. HappyRobot agents now call customers, follow up on quotes and work lost accounts inside one of Europe’s largest full-truckload operations.

Freight AI agents are rebuilding the operating model

Muscher’s argument is that use-case count and operating-model change are the same project.

“The more use cases you implement, you parallelly actually change your operational model,” he said. Bolting agents onto existing processes, in his telling, is like buying a 3D printer to reproduce engraved stone tablets. “We will simply develop the entire system new.”

Peña described the WALTER GROUP work as an end-to-end business transformation rather than a software deployment, supplying capabilities that would have taken too long to build in-house. He called the arrangement symbiotic: the group drives value from the agents, and as an investor it validates HappyRobot’s enterprise readiness.

Looking ahead: Beyond HappyRobot’s Series C

The capital funds in-house research and geographic expansion. “Most of the models that we already run are built by our own team,” Peña said. “We are a very technical team that does not depend on third-party providers, and we are going to continue to try to innovate to become the frontier in this specific industry.”

The other priority is Europe, where WaVe-X and the WALTER GROUP serve as an anchor alongside DHL. HappyRobot is also pushing beyond freight, with agents now handling high-volume work in telecommunications, energy utilities, oil and gas, and property and casualty insurance.

Peña expects the rebuild to spread past the early adopters.

“Companies were built with processes that were constrained by the capabilities that we had before AI,” he said. “And now the best companies are going to want to rebuild themselves using the new standards and capabilities that we have today.”

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500K June boxes for Port of New York-New Jersey

Stuart Chirls — Tue, 04 Aug 2026 16:56:00 +0000

Seismic trade policy shifts and raging geopolitics failed to hamper June container traffic through the Port of New York-New Jersey.

The leading U.S. East Coast hub was also the nation’s second-busiest cargo gateway for loaded twenty-foot equivalent units (TEUs) in June after Los Angeles-Long Beach, moving 503,016 loaded TEUs over the month. That was an improvement of 7.6% from June 2025, according to the Port Authority of New York and New Jersey.

Overall June volume of 769,422 TEUs was better by 11.9%, and an indication of an earlier, front-loaded peak shipping season driven by changing federal trade policy.

Over the first half of the year, the port moved 4,427,159 TEUs, which it said was virtually even with the prior year.

Read more articles by Stuart Chirls here.

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Texas ports defy tariff uncertainty with record cargo performance

Noi Mahoney — Tue, 04 Aug 2026 16:27:45 +0000

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.

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

Sponsor — Tue, 04 Aug 2026 15:40:08 +0000

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.

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Strong quarter for Expeditors, air freight leads the way

John Kingston — Tue, 04 Aug 2026 15:34:23 +0000

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

Todd Maiden — Tue, 04 Aug 2026 15:01:39 +0000

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:

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Strong finish: Ocean lines raise profit outlook by 200%

Stuart Chirls — Tue, 04 Aug 2026 14:34:05 +0000

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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The post Strong finish: Ocean lines raise profit outlook by 200% appeared first on FreightWaves.

As diesel futures markets plummet, benchmark retail price rises

John Kingston — Tue, 04 Aug 2026 14:20:14 +0000

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.

More articles by John Kingston

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

Noi Mahoney — Tue, 04 Aug 2026 13:38:21 +0000

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.

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

Phil Brink — Tue, 04 Aug 2026 13:20:10 +0000

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

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Transportation capacity falls faster in July, rates remain high

Todd Maiden — Tue, 04 Aug 2026 13:04:41 +0000

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.”

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:

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SONAR and Retlia Announce a Strategic Integration of Retail Intelligence

Julie Van de Kamp — Tue, 04 Aug 2026 13:00:00 +0000

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

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Truck capacity tightens as shippers pay more for less

Thomas Wasson — Tue, 04 Aug 2026 12:00:00 +0000

The freight recession spent three years handing shippers cheap trucks. That invoice for its ending arrived in the second quarter.

Shippers moved less freight between April and June and paid sharply more to do it, according to the U.S. Bank Freight Payment Index released Tuesday. The National Shipment Index fell 1.1% from the first quarter to 75.1, the second consecutive sequential decline. Spending ran the other way, rising 6.4% to 230.4.

The annual comparison is wider still. Volumes dropped 2.8% from a year earlier, reversing the first quarter’s 0.6% gain, which had been the first annual increase in four years. Spending climbed 28.1%.

For shippers, that combination is negative operating leverage in its purest freight form: a shrinking book of loads costing more per load, with no volume growth to absorb the difference.

“While higher fuel prices added to transportation costs in the second quarter, fuel was not the primary force behind the increase in shipper spending,” said Bob Costello, senior vice president and chief economist at the American Trucking Associations.

Truck Capacity Tightening Outweighed the Fuel Spike

Fuel was not cheap. DAT Freight & Analytics reported second-quarter fuel costs of 75 cents per mile, 47.1% above the first quarter and 78.6% above a year earlier. The one favorable development for shippers came late in the quarter, when the national average diesel price fell from an April peak above $5.64 per gallon to $4.67, nearly a dollar lower.

Capacity did the heavier lifting. Three-plus years of recession pushed small, midsize and large fleets out of the market amid weak rates, rising costs and softer volumes. That exit never fully matched low demand, but it narrowed the gap.

Industry participants have pointed to a second force. English language proficiency (ELP) enforcement, non-domiciled commercial driver’s license revocations and increased oversight of driver training schools all gained momentum over the past year. Those actions may have helped bring supply closer to demand and, in some markets, pushed available capacity lower.

The result is a market that tightened while it shrank. Carriers seeing more freight may be benefiting from fewer fleets chasing the same loads, not from broad-based demand recovery.

Spot Rates Have Nearly Caught Contract Rates

The rate data shows how fast the rate floor moved. DAT reported average spot rates of $3.02 per mile in the second quarter, an 18.9% jump that followed an 11.9% gain in the first quarter. That is 75 cents, or 33%, above the fourth quarter of 2025 and 88 cents, or 41.1%, above year-earlier levels.

Contract rates rose too, though less violently, averaging $3.06 per mile. That is up 13% sequentially and 20.9%, or 53 cents, from the second quarter of 2025. Neither figure includes fuel, which DAT reports separately.

The gap between the two is now 4 cents. A year earlier it was 39 cents. Spot pricing has effectively converged with contract pricing.

That convergence is the forward indicator worth watching. Spot moves first and contract follows on the next bid cycle, which means the harder market for shippers is still in front of them, not behind.

The Southwest Shows What Tight Capacity Costs

No region illustrates the split more sharply than the Southwest. Shipments there fell 0.6% sequentially and 20.2% year-over-year. Spending rose 11.2% and 39.9% over the same periods. Across the first half of 2026, regional shipments dropped just over 10% from the fourth quarter of 2025 while shipper spending increased nearly 24%.

Tighter capacity appears to be the primary driver. The Department of Homeland Security and the Department of Transportation increased coordination around possible cabotage violations by Mexican B-1 drivers during the quarter, resulting in significant B-1 visa cancellations. Given the Southwest’s role in cross-border freight, those developments may be more visible there.

Demand was soft on its own, too. Housing starts across the broader South fell 14.4% from the first quarter and 9.6% from a year earlier, and Dallas Fed contacts reported weaker retail sales tied to gasoline prices and pressure on low-income consumers.

“The Southwest continued to stand out this quarter,” said Bobby Holland, director of freight business analytics at U.S. Bank. “The gap between declining shipments and rising spending was more pronounced there than anywhere else in the country. It’s a signal that capacity conditions can have a significant impact on freight costs even when underlying demand isn’t growing.”

Spending Rose in Every Region but One

Regional volumes were mixed. The Southeast posted the largest sequential gain at 0.9%, its first increase in three quarters and its largest in two years, helped by data center construction in Northern Virginia and Atlanta. The West rose 0.5%, the Northeast was flat, and the Midwest recorded the steepest decline at 3.7%. On an annual basis the picture is less uniform than the national number suggests: the West led all regions at 5.5%, the Midwest gained 2.8% and the Northeast 2.0%, while the Southeast fell 6.5%.

Spending was far more consistent. It increased sequentially everywhere except the Midwest, where it slipped 0.8%, led by the West at 12%, the Southwest at 11.2% and the Southeast at 10%. The Northeast’s 5% rise marked its seventh straight quarterly increase. Year-over-year, every region posted gains above 20%, from 22.9% in the Midwest to 39.9% in the Southwest.

One more second-quarter development sits underneath those numbers. The May 14, 2026, Supreme Court ruling in Montgomery v. Caribe Transport II, LLC, clarified that brokers could face scrutiny over carrier selection. Some brokers appear to be reassessing carrier qualifications, though the quarter’s measurable impact was modest.

The spending index remains 17% below its second-quarter 2022 peak, so this is not a return to pandemic-era pricing. Some freight may also be moving to rail as truck rates climb, though American Trucking Associations analysis suggests the effect is limited.

Costello put the quarter in plainer terms.

“The more important trend is that trucking capacity continues to tighten after several years of excess supply,” he said. “As available capacity becomes scarcer, rates are moving higher, leaving shippers with higher costs despite a freight market that remains relatively soft.”

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July’s 55.6% PMI highest in 4 years; LTL carriers getting bullish

Todd Maiden — Mon, 03 Aug 2026 19:19:14 +0000

July’s manufacturing data showed a stronger-than-expected push into expansion territory. A survey of manufacturing supply executives returned a 55.6 reading for the month, 2.3 percentage points above June and the highest reading since May 2022. New orders increased, inventories remained “too low” and manufacturing employment turned positive for the first time in 33 months.

A reading above 50 for the Institute for Supply Management’s Manufacturing PMI signals expansion, while one below 50 indicates contraction. A sustained level above 47.5 signals the overall economy is growing.

July marked the seventh straight month of expansion for the dataset. The update was 1.6 points ahead of analysts’ expectations and consistent with real GDP growth of 2.8%, the Monday report said.

The new orders subindex—an indicator of future activity—was also higher for a seventh consecutive month at 56.7. That was 70 basis points higher than June. Demand sentiment around orders improved to a ratio of 3.5-to-1 positive-to-negative comments. The ratio was 2.7-to-1 in June.

Manufacturing recovery showing in LTL volumes

The manufacturing complex has an outsized impact on less-than-truckload demand, with roughly two-thirds of LTL volumes tied to industrial output. Inflections in ISM data usually lead LTL tonnage by a few months.

Four publicly traded LTL carriers reported second-quarter results last week. On average, tonnage was up 2.6% year over year in the quarter, with preliminary results for July showing tonnage growth of 5.1% y/y. The group first saw tonnage turn positive in March.

Weight per shipment was 3% higher y/y on average in the second quarter, as more truckload shipments moved back to LTL networks and as the freight mix is skewing more industrial.

Management teams were a little more upbeat about the July trends as well.

ArcBest (NASDAQ: ARCB) normally sees a 4.6% tonnage decline from June to July, but tonnage was off just 1% this year (360 bps of outperformance). XPO (NYSE: XPO) reported 400 bps of outperformance while Old Dominion Freight Line’s (NASDAQ: ODFL) sequential volume trends were 250 bps better than typical seasonality during the month.

Saia’s (NASDAQ: SAIA) July sequential tonnage trend was slightly subseasonal, but it implemented a 7.1% general rate increase on July 6, creating some short-term volatility.

XPO noted “a lot of positivity from customers,” with twice as many now expecting their businesses to accelerate in the back half of the year.

Tightness across the transportation space could be seen in the ISM’s supplier deliveries subindex, which measures “delivery performance of suppliers to manufacturing organizations.” A 58.9 reading (1.5 points higher than June) signaled slower deliveries and potential supply chain constraints for an eighth straight month. Of the 13 manufacturing industries tracked, “no industries reported that supplier deliveries were faster in July compared to June.”

Customers’ inventories remained too low at 40.7, down 1.6 points sequentially.

Employment (52.8) was up 3.1 points, as production (58.5) increased 6.3 points and the backlog (55) was up 4.5 points. Sixty percent of respondents said their companies are hiring, while the remainder are “managing head counts.”

Why it matters? The recent manufacturing surge directly impacts freight capacity, delivery timelines and logistics costs.

More FreightWaves articles by Todd Maiden:

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Atlas Air finalizes Air Atlanta investment

Eric Kulisch — Mon, 03 Aug 2026 18:18:20 +0000

Atlas Air Worldwide Holdings has completed its transaction to take a 49% stake in Iceland-based Air Atlanta, the all-cargo carrier and lessor announced on Monday.

As part of the deal, Atlas Air Worldwide subsidiary Titan Aviation acquired the 14 widebody freighter aircraft owned by Air Atlanta group of companies and leased them back to Air Atlanta, which will continue to operate the aircraft.

Air Atlanta’s CEO and vice presidents acquired a 51% controlling interest in the operating companies (Air Atlanta Icelandic and Air Atlanta Europe). Air Atlanta will continue to operate under its existing leadership team and operating structure, while both companies collaborate commercially to pursue incremental global growth opportunities. Air Atlanta Executive Chairman Hannes Hilmarsson will step down after 20 years in leadership roles with the company.

Why It Matters: Subsidiary Atlas Air is a major all-cargo carrier. The strategic investment, initially announced on May 28, expands Atlas’ ability to perform cargo operations and offer widebody capacity across key international markets.

Between its Iceland and Malta certified airlines, Air Atlanta operates 18 widebody aircraft and owns 14 of them: 12 Boeing 747-400 cargo jets, two Boeing 777-300 passenger-to-freighter conversions, and four 777 passenger jets. It also owns four Boeing 747-400 cargo jets that are leased to Saudia Cargo, according to aviation databases.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

New Australia airport has no curfew for cargo campus

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STG drayage drivers to get cash in NJ misclassification case

John Kingston — Mon, 03 Aug 2026 17:41:06 +0000

Drayage drivers who hauled for STG Logistics in New Jersey may be eligible for a piece of a more than $2.2 million payout by the company following the resolution of a legal case over driver misclassification.

That payout is a fraction of the total value of the settlement, much of which will disappear into STG’s chapter 11 recently-concluded bankruptcy action. And the fact that such a large settlement is coming right before New Jersey on October 1 codifies the ABC test that was used by New Jersey in its action against STG is creating another level of concern among the state’s carriers.

The total cash payout in the settlement is $2.775 million. It will be paid out as $2.2 million to drivers, with the $555,000 balance to be paid to New Jersey in both penalties and contributions to the Unemployment Compensation and State Disability Benefits Funds.

Much bigger figure to be swallowed by bankruptcy

But the settlement document filed in the Superior Court of Essex County puts the total value of the settlement at slightly more than $80.9 million. STG is coming out of a chapter 11 bankruptcy proceeding that cut its debt load by 90%. And most of that big $80 million settlement agreement looks to be going away in the bankruptcy case.

“This agreement…shall be incorporated into the (bankruptcy) plan,” according to the settlement document.

In the prepared statement announcing the deal released by the Attorney General and the state’s Department of Labor and Workforce Development, the two agencies noted that the bankruptcy “resulted in many debts being canceled.”

But that part of the settlement going to drivers “is considered ‘priority’ under both the bankruptcy code and the settlement agreement, ensuring workers are compensated ahead of other creditors,” the agencies’ statement said.

The breakdown on the payout of the $80-million plus is that $2.775-million of it will be paid out as $2.2 million to drivers and the $555,000 balance to be paid to New Jersey in both penalties and contributions to the Unemployment Compensation and State Disability Benefits Funds.

Drivers eligible for a payout can receive an amount that will be based on their earnings from January 1, 2017 to the present. The payment will be a lump sum.

There is an additional $7.5 million payment to be made by STG Logistics but only if it fails to meet certain obligations drawn up as part of the settlement.

The balance of more than $70 million is what the settlement agreement refers to as the “general unsecured claims” that would only be paid out “to the same extent that general unsecured claims are ordered to be paid…according to the plan.” That plan is wiping away about 90% of the company’s debts.

History of the case

The state agencies said the suit against STG, which dates back to 2023, was the first filed under a 2021 law that allowed litigation against employers that New Jersey believes had misclassified workers who were effectively full-time employees as independent contractors.

The settlement ends litigation that traces back to an investigation that began in 2019, when the drayage operations were part of XPO Logistics (NYSE: XPO). They were sold to STG in 2022 as part of XPO’s ultimately successful plan to reposition itself as a pure play LTL carrier.

While the settlement document does not mention New Jersey’s ABC standards that governs the definition of when a worker can be considered a truly independent contractor , the announcement of the deal by the state agencies does so.

“Under New Jersey’s ABC test, workers are presumed to be employees unless a company can prove the individual is largely free from the company’s control, performs work outside the company’s usual business or outside its places of business, and has their own independent business,” the two state agencies said in their announcement. “STG failed to meet any of these requirements.”

What STG was charged with

Over numerous bullet points, the state said STG (and XPO prior to that) did not legally meet several requirements a company must meet for its full-time employees.

Among the issues the state charged STG with were not paying wages due to employees, in violation of the state’s Worker Protection Law, failing to maintain records of hours worked and wages paid, and not carrying “sufficient” workers’ compensation insurance.

An email sent to STG through its portal had not been responded to by publication time.

Who’s in control?

The issue of control is always key in an independent contractor law. While various states’ ABC tests are not all verbatim, the A prong in the New Jersey test is typical: “The individual has been and will continue to be free from control or direction over the performance of work performed, both under contract of service and in fact.

The state, in its prepared statement, said the drayage drivers hired by STG had little to no control over their jobs. According to the statement, the theoretically independent drivers needed to display STG’s name on their trucks, could lease only to STG “for its exclusive possession, control and use,” assigned all routes and were subject to electronic monitoring.

Waiting for October 1

Lisa Yakomin, president of the Association of Bi-State Motor Carriers, declined comment on the specifics of the case as it relates to STG.

But there were parts of the state agencies’ prepared statement that concerned her as her group, which represents the types of drayage carriers akin to STG, prepares for the state’s ABC law to be codified October 1. (It previously had been enshrined in various precedents but without a specific law on the books).

In particular, the state’s statement said STG was in violation of state regulations defining independent contractor status because it required the STG name be displayed on the truck driven by ostensible independent owner operators, which it said was a sign of control.

Yakomin said federal law requires such a display.

Even if this is ultimately a small issue, Yakomin said it raises concerns.

“So if the Department of Labor in New Jersey is saying that following the laws put forth by the federal government is indicative of control, we have a real problem,” Yakomin said.

Yakomin said the example of the truck signage amounts to “saying the quiet part out loud.”

“They put it into writing, that OK, we’re using the ABC test, and this is how we’re interpreting it,” Yakomin said.

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The post STG drayage drivers to get cash in NJ misclassification case appeared first on FreightWaves.

$4M worth of cocaine found in Texas commercial truck

Phil Brink — Mon, 03 Aug 2026 16:48:04 +0000

El Paso County investigators seized nearly 120 kilograms of cocaine from a commercial tractor-trailer during a targeted interdiction operation. Detectives also recovered $7,000 in cash and confiscated the truck. Authorities estimate the cocaine carried a street value of about $4 million. Officials continue investigating the suspected trafficking operation.

The El Paso County Sheriff’s Office announced the seizure Friday. Detectives conducted the operation July 29 through the agency’s Gang and Narcotics Unit. Officials connected the commercial vehicle to an ongoing criminal investigation. Authorities withheld additional information while detectives continue their work.

Commercial truck seized during operation

Investigators recovered approximately 119.8 kilograms of cocaine during the interdiction. Deputies also confiscated $7,000 in United States currency. Authorities took possession of the tractor-trailer because investigators linked the vehicle to the trafficking operation. The sheriff’s office did not identify the driver, carrier, trailer, cargo or destination.

Sheriff Oscar Ugarte highlighted the significance of the investigation.

“This significant seizure disrupted the movement of a large quantity of illegal narcotics and underscores the El Paso County Sheriff’s Office’s commitment to aggressively targeting drug trafficking organizations operating in and through our region. Our investigators remain focused on identifying, investigating, and dismantling criminal networks that threaten the safety of our community.” Sheriff Oscar Ugarte

Investigation continues

The sheriff’s office confirmed the investigation remains active. Officials have not announced arrests or criminal charges. Detectives also have not disclosed whether additional suspects remain under investigation. Authorities stated they will not release further information while the case continues.

The sheriff’s office noted that deputies continue working alongside local, state and federal law enforcement partners. Officials did not identify participating agencies or describe their roles. Additional details could become available through future court filings or criminal charges. FreightWaves will update this story as new information becomes public.

Why it matters

Commercial trucks remain attractive targets for criminal organizations because they move large volumes of freight across long distances every day. Transportation professionals should monitor investigations like this because future court records often reveal methods that can strengthen security practices across the supply chain.

Training alone cannot stop organized crime, but consistent verification can reduce opportunities for criminals to exploit transportation networks. Programs such as the Certified Fraud Compliance Officer (CFCO) focus on building repeatable decision-making processes that help professionals identify risks before they become costly incidents.

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

Indiana State Police recover 12 stolen truckloads worth more than $11 million – FreightWaves

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

$20M in cocaine found beneath floorboards of commercial truck trailer at California border – FreightWaves

The post $4M worth of cocaine found in Texas commercial truck appeared first on FreightWaves.

Australia military base gets mobile post office during war games

Eric Kulisch — Mon, 03 Aug 2026 16:30:21 +0000

Australia Post said Monday it opened its first mobile post office and parcel lockers on the Royal Australian Air Force base in Darwin, giving military personnel access to essential mail and parcel services during a three-week multinational air combat exercise involving troops from Australia and 21 allied and partner nations, including the United States.

The dedicated Parcel Hub gives Australian and international troops access to services typically unavailable during large-scale defense exercises. The hub serves as a mini-post office with postal employees providing service. Free 24/7 parcel lockers have also been installed on the base during Exercise Pitch Black, giving personnel greater flexibility and convenience when sending and receiving parcels.

“Australia Post has a longstanding partnership with Defence, and this first-of-its-kind portable Parcel Hub shows how we are innovating to meet the changing needs of our customers,” said Mitch Buxton, Australia Post General Manager for Network Optimization, in a news release. “The hub is designed to operate in complex environments, and this exercise in Darwin will give us valuable insight into how we can strengthen our emergency response during natural disasters, severe weather events and other major disruptions.”

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Truck enforcement sweeps hit 32 drivers, 45 vehicles across US

Noi Mahoney — Mon, 03 Aug 2026 15:53:51 +0000

Recent commercial vehicle enforcement operations across eight states placed at least 32 truck drivers and 45 commercial vehicles out of service, underscoring continued nationwide scrutiny of licensing, maintenance and cargo safety.

Operations in Arizona, Colorado, Massachusetts, Missouri, Rhode Island, Texas and Wyoming resulted in citations, arrests and more than $16,000 in fines.

Joint Massachusetts, Rhode Island operation finds 212 violations

Massachusetts and Rhode Island state police conducted one of the largest recent operations on Thursday along Route 146 near the state line.

More than 27 federally certified inspectors worked a 12-hour operation using portable axle scales, a performance-based brake tester and hazardous materials inspections.

Authorities completed 126 inspections and identified 212 federal and state violations. Thirty commercial vehicles and 20 drivers were placed out of service.

Inspectors screened or weighed 949 commercial vehicles and issued $16,079 in fines for three weight violations.

Authorities said vehicles were removed from service for serious brake and mechanical defects, while drivers were sidelined for medical certification, CDL and electronic logging device violations. Inspectors also identified hazardous materials issues and assisted in a criminal investigation involving a suspicious vehicle.

Arizona details uncover overweight trucks and unlicensed driver

Arizona law agencies checked commercial vehicles July 27 along U.S. Route 60 in Pinal County, resulting in 35 inspections and 64 violations.

Nine vehicles and three drivers were placed out of service, while six citations were issued.

Twenty-six of the 113 vehicles checked were overweight.

In a separate July 25 case in Graham County, a steer tire blowout caused a semi to leave U.S. Route 70. No injuries were reported, but a post-crash inspection found the driver had no valid CDL or medical certificate. The truck also lacked valid registration, and the company did not have authority to operate.

The driver received multiple citations and was placed out of service.

In Phoenix, an Arizona trooper also stopped a commercial vehicle carrying four occupants after observing that three were not wearing seat belts. The driver was placed out of service for lacking a medical evaluation and for a missing trailer cotter pin. Inspectors also found that the trailer’s emergency breakaway cable was attached incorrectly.

The most recent roundups signal that carriers and drivers face growing exposure to roadside delays, fines and out-of-service orders if licensing, maintenance and cargo securement requirements are ignored. (Photo: Douglas County Sheriff’s Office- Colorado)

Colorado checkpoint sidelines drivers and trucks

The Douglas County Sheriff’s Office and Colorado State Patrol conducted a commercial vehicle checkpoint Thursday on Chambers Road near Mainstreet.

Officers stopped 63 trucks, performed 32 full inspections and documented 50 violations.

Seven drivers and five vehicles were placed out of service, while eight tickets were issued.

The violations included six CDL offenses, four seat belt violations, two drug or alcohol violations and one suspended license. Authorities also served one proof-of-service document during the checkpoint.

Missouri trailer suspension held together with rope

A Platte County, Missouri, deputy stopped a Peterbilt tractor pulling an intermodal chassis on June 17 and found that the trailer’s suspension was not connected properly.

Authorities said the suspension system was being held together with a piece of rope and bungee cords.

The driver was cited, and the trailer was placed out of service until it could be repaired at the scene or towed. The sheriff’s office cited the case as an example of why drivers must perform thorough pretrip inspections before operating commercial equipment.

Texas car hauler partially loses load

Police in Gunter, Texas, removed a car hauler from service June 23 after it partially lost its load of automobiles, creating what authorities described as a significant danger to the public.

The Gunter Police Department located the vehicle and requested assistance from the Collin County Sheriff’s Office Commercial Motor Vehicle Enforcement Unit.

Following an inspection, authorities declared the car hauler unsafe and placed it out of service. A towing company was called to remove the vehicle after officers addressed the immediate roadway hazard.

Wyoming operation results in 120 traffic stops

The Laramie County Sheriff’s Office conducted another round of its “Truck Around and Find Out” initiative in late July, resulting in about 120 traffic stops and 40 tickets, according to Cowboy State Daily.

Sheriff Brian Kozak and Chief Deputy Chance Walkama said 10 people suspected of being unlawfully present in the U.S. were arrested and transferred to Immigration and Customs Enforcement. The operation also included enforcement against passenger vehicles traveling near commercial trucks.

County officials said the latest operation brought the number of immigration-related arrests associated with the enforcement initiative to 128 since its launch in November 2025.

Officials emphasized that the campaign’s primary objective was traffic and commercial vehicle safety rather than immigration enforcement.

State	Drivers placed out of service
Massachusetts/Rhode Island joint operation	20
Arizona (Pinal County enforcement detail)	3
Arizona (Graham County post-crash inspection – no CDL/medical card)	1
Arizona (Phoenix overloaded truck stop)	1
Colorado (Douglas County checkpoint)	7
Missouri	0 reported (trailer placed out of service, not the driver)
Texas	0 reported (vehicle placed out of service, not the driver)
California	No driver out-of-service total reported in the source.
Wyoming	No commercial driver out-of-service count reported; the operation focused on traffic stops, arrests and immigration enforcement rather than FMCSA out-of-service inspections.

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Is Lufthansa giving up on its Airbus A321 cargo fleet?

Eric Kulisch — Mon, 03 Aug 2026 13:32:34 +0000

Lufthansa Cargo insists it will soon resume commercial service with its four Airbus A321 converted freighters that were grounded nearly four months ago, but all signs suggest the carrier has given up on the narrowbody jets and is looking to unload them.

The cargo subsidiary of Lufthansa Group (XETRA: LHA) is ready to abandon the narrowbody A321 jets after less than four years, because they have fallen short of performance expectations and Lufthansa Cargo doesn’t need the capacity, as most regional freight customers can be served by Lufthansa’s passenger air and trucking networks without any noticeable impact, according to aviation and logistics industry sources.

The A321s were operated for Lufthansa Cargo by CityLine, which provided crews and flight support until Lufthansa Group accelerated the planned closure of the loss-making, regional passenger affiliate. It abruptly shut down CityLine operations in mid-April because of rising fuel costs linked to the Iran war and pressure from labor disputes. The A321s remain parked at Frankfurt International Airport, Lufthansa’s main hub.

“Our strategic European network is a key component in maintaining global supply chains. Lufthansa Cargo and the Lufthansa Group are aware of this responsibility. We will now be working with the Lufthansa Group to find a way to offer this cargo capacity to our customers again as soon as possible,” the cargo division said in a statement at the time.

Lufthansa Cargo, the No. 14 cargo carrier in the world by scheduled traffic, has a fleet of 12 large Boeing 777 intercontinental freighters and manages shipments on Group passenger airlines.

Lufthansa took delivery of the A321 freighter aircraft in 2022 and 2023 from San Francisco-based BBAM Aircraft Leasing & Management, after they were reconfigured by a speciality repair shop to carry shipping containers on the main deck. The all-cargo airline marketed their capacity on short-and-medium haul routes geared towards e-commerce customers in Europe, and parts of the Middle East and North Africa.

In March, Lufthansa Cargo executives remained publicly bullish about the A321s, describing how they helped support customers in the automotive sector, a key focus area for the company. In one case, a chartered A321 flew on less than 24-hour notice from Frankfurt, Germany, to Vienna, Austria, to pick up a load of components and deliver them to Belgrade, Serbia, to keep a production line from closing down. Two additional charter flights followed in subsequent days. And in February, Lufthansa Cargo operated 11 A321 freighter flights from Casablanca, Morocco, for Mercedes-Benz over an 11-day span.

Responding to an inquiry about the delayed return of the A321 cargo fleet, spokeswoman Katharina Stegmann, said Lufthansa Cargo was looking to replace CityLine with a third-party contract carrier that would operate the aircraft.

“We are currently working intensely to evaluate the available options for operating our A321-fleet. Currently, it appears that this will be handled by an operator outside Lufthansa Group. It has not yet been definitively determined whether the suspension will remain in effect for the entire summer flight schedule,” she said in a June 29 email message.

“Our goal is not only to provide a short-term solution, but also to establish a structurally improved solution that will ensure even greater stability and flexibility in the future. Until we can implement a new operating structure, the aircraft will remain grounded. There is no exact timeline foreseeable at the moment, but we are working on restarting the operations as soon as possible.”

Ghost freighters

Restarting the A321 operations now seems unlikely after a spokesman confirmed to FreightWaves that Lufthansa Cargo has removed its brand name and color scheme from the A321 freighters.

“As part of the ongoing evaluation of different operating scenarios, the aircraft have been transitioned to a neutral exterior appearance. Since the aircraft are currently grounded, the branding was removed during this period,” Jan Paulin said in a statement on July 16. “For operational reasons, the aircraft are moved on a regular basis, for example to undergo scheduled inspections and maintenance checks.”

Stripping the corporate colors from the A321s raises questions about whether Lufthansa Cargo is still interested in operating them. The latest statement describes the goal of finding a home for the A321s, but notably ignores any specific mention of resuming operations for Lufthansa Cargo itself.

Lufthansa CityLine operated four Airbus A321 converted freighters on behalf of Lufthansa Cargo. (Photo: Lufthansa Cargo)

“We are currently working intensively to evaluate the available options for operating our A321 freighter fleet. As part of this process, we are in discussions with several potential operators to identify a sustainable solution for the future operation of the aircraft. The duration of the current suspension of flight operations has not yet been finally determined,” Paulin said.

The change to a neutral color scheme indicates that Lufthansa Cargo is trying to return the A321s and break the multi-year lease with BBAM or sublease them to another all-cargo carrier, said an industry executive familiar with the situation.

BBAM doesn’t want the planes back and Lufthansa would prefer not subleasing them. “It’s a bit of a standoff at the moment,” the source said. “I don’t think they’ll operate back for Lufthansa.”

The lessor’s position is influenced by a glut of narrowbody freighters, caused by a boom in passenger conversions in response to massively elevated air shipping activity during the pandemic, and the realization that remarketing the A321s at equal lease rates to a carrier of equal credit worthiness will be difficult — especially with most operators still favoring the Boeing 737-800 in that category.

Some owners are making more money by removing engines from idle A321 freighters and leasing them to passenger airlines desperate to avoid capacity reductions in the face of a global engine repair and production slowdown. But the Lufthansa aircraft are in BBAM’s freighter fund and BBAM wants to keep them working as freighters, the source said.

BBAM representatives did not respond to repeated phone messages requesting comment on the matter.

From Lufthansa’s point of view, subleasing the aircraft isn’t ideal because it would be an intermediary with its credit still on the hook to BBAM.

“If they do cut a deal with BBAM to return the airplanes it would mean millions of dollars of termination fees,” the source told FreightWaves.

Lufthansa Cargo is coming to terms with the fact that the A321 “is an expensive aircraft to operate in cargo configuration and every operator is having a hard time making money,” said a prominent air logistics expert with experience running airline operations and as an airline customer.

Miami-based Global Crossing Airlines, for example, this year idled two of its four A321 freighters because of soft demand and its inability to exit the lease. Latvia-based SmartLynx Airlines, which operated a fleet of A321 converted freighters shut down cargo operation in March 2025 after losing a major contract. Also, Air Transport Services Group, the world’s largest lessor of freighter aircraft and a contract cargo airline for customers such as Amazon and DHL Express, in January dissolved its joint venture converting Airbus A321 passenger aircraft to all-cargo configuration because demand for A321 freighters has collapsed.

Turkish Airlines’ cargo division has wet-leased some A321 freighters from another airline to temporarily fill capacity needs, but doesn’t like them because they lose money, the logistics source said.

FreightWaves spoke with several air cargo analysts and operators who say the A321 is uneconomical without high capacity utilization, the right commodity and the right route system. They all requested anonymity so they could speak freely without jeopardizing current or future business relationships.

The primary issue is that the Boeing 737-800 is more efficient than the A321. The A321 is heavier, which means it requires more fuel, and requires more maintenance than predicted, resulting in higher trip costs than with a 737-800, said an expert who previously worked at one of the aircraft manufacturers.

In many cases, A321 leases are more expensive because the planes tend to be newer than 737-800 converted freighters and the conversion costs are rolled into the lease.

Of the 82 A321 converted freighters in the market, 38% are inactive compared to an inactive rate of 14.8% for the 283 available Boeing 737-800s, according to data provided by Aerodynamic Advisory.

Over time, operators have realized the plane’s volumetric capacity works well high-frequency small-package shuttle routes, but is less desirable for general freight.

“The A321 passenger-to-freighter experiment is a failure. The only way to make money is if you pack them full of e-commerce day-in and day-out and then they might only break even. But with high fuel costs, and so on, these are doomed in my opinion,” said the logistics professional.

One of the few carriers having apparent success with the A321 is Qantas, which operates six A321 converted freighters on behalf of Australia Post and is scheduled to take delivery of three additional A321s in the coming months.

Lufthansa Cargo can achieve greater operating flexibility by contracting, as needed, with narrowbody freighter operators when extra capacity is needed for short periods rather than being permanently stuck with dedicated planes it can’t efficiently utilize, the aviation executive said.

The airline acknowledged that it has been able to support customers without interruption since the A321s were grounded.

“Thanks to our extensive global network, supported by our own Boeing 777 freighters and the belly cargo capacity provided by Lufthansa Group passenger airlines, we are able to continue offering our customers flexible and reliable transportation solutions,” Paulin, the spokesman, said.

Jonathan Mellink, head of sales and marketing at cargo consultancy Rotate, said the A321s exit from Lufthansa Cargo’s fleet has had a relatively small impact on customers within the intra-Europe network. The freighters offered about 210 metric tons of daily regional capacity and likely better service levels than passenger aircraft or trucks, he explained.

Lufthansa’s A321 changes have not had much impact on Germany-based logistics provider Dachser, spokesman Hedrik Durst said. The company has been able to leverage its strong European road network to absorb traffic previously carried by the freighters

The head of an air freight shipping cooperative said he hasn’t seen any shipper delays because there are plenty of regional air cargo and ground alternatives.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Lufthansa Cargo targets high-value tech, auto and pharma sectors

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Louisiana bribery scheme gave 124 people CDLs without training or tests

Phil Brink — Mon, 03 Aug 2026 13:28:35 +0000

Federal prosecutors say a Louisiana bribery scheme helped at least 124 people fraudulently obtain commercial driver’s licenses they did not earn. Three defendants pleaded guilty July 29 for participating in the operation. The conduct stretched from August 2020 through February 2024. Each defendant pleaded guilty to bribery concerning programs receiving federal funds.

Mahmoud Alhattab, a local restaurant owner, admitted he led the scheme. CDL applicants paid him an average of about $5,000 for unearned credentials. The operation bypassed knowledge testing, entry-level driver training and skills testing. Those three steps form the federally mandated CDL qualification process.

Correct answers entered at OMV office

Alhattab admitted he bribed two employees at a Donaldsonville, Louisiana, Office of Motor Vehicles location. He sent workers photographs of applicants’ driver’s licenses through cellphone messages. His messages also identified requested endorsements, including school-bus credentials. OMV employees then entered correct knowledge-test answers for the applicants, according to court documents.

The office later issued commercial learner’s permits based on falsified scores. Alhattab paid the two workers with cash and meals. Staff members allowed him to bring applicants through a nonpublic side entrance. They also let him enter restricted sections of the building.

Alhattab sometimes operated the OMV camera for learner-permit photographs. The written knowledge examination covers vehicle safety systems and emergency situations. It also addresses driving maneuvers and extreme road conditions. A learner’s permit must come before training and a skills examination.

Fake training records followed false permits

Most CDL candidates must complete entry-level driver training after obtaining a learner’s permit. That instruction includes demonstrating proficiency while driving a commercial vehicle on public roads. Alhattab admitted bribing two truck-driver training business operators to avoid that requirement. One of those operators was defendant Jonathan Parsons.

Alhattab sent Parsons photographs of commercial learner’s permits through cellphone messages. Parsons used that information to create false training records, prosecutors said. He admitted reporting successful completion in a federal database despite no actual instruction. Those entries moved candidates toward the final licensing stage.

Louisiana requires commercial drivers to pass a skills examination. That assessment includes pre-trip inspections, basic vehicle control and safety-related on-road driving. Parsons and another business operator held state certification to administer those evaluations. Alhattab admitted bribing both men to defeat the final requirement.

Examiner entered passing tests without drivers

Parsons admitted reporting passing skills-test results to the state for people who never took examinations. Early in the operation, Alhattab sometimes drove the test vehicle while posing as an applicant. He did so to make it appear that Parsons conducted a legitimate evaluation. Parsons later entered results without Alhattab or the applicant appearing at the test site.

Defendant Marline Roberts worked as another skills-test examiner. She admitted creating seven phony score sheets during early 2023. Those records supported Parsons’ false reports, according to the Justice Department. Parsons paid Roberts to assist with the operation on some occasions.

Alhattab admitted causing at least 124 people to fraudulently receive CDLs. Parsons admitted causing at least 118 people to receive credentials through false training entries, test reports or both. The three defendants face sentencing on Oct. 28. Their offense carries up to 10 years in prison, three years of supervised release, a $250,000 fine and a $100 assessment.

The FBI and U.S. Department of Transportation Office of Inspector General investigated the case. Louisiana’s Office of Inspector General and Public Safety Services also assisted the inquiry. Other defendants charged in the indictment await trial. Those charges remain accusations until prosecutors prove guilt beyond a reasonable doubt.

Why It Matters: Commercial driver licensing depends on verified training, testing and records. Those safeguards protect freight networks, public roads and the families traveling on them. When someone bypasses required training and skills tests, a CDL may not reflect the ability to safely operate a commercial vehicle. Imagine putting your child on a school bus without knowing whether its driver completed the training and testing required for that credential.

In my opinion, CFCO training could help transportation professionals recognize when a credential, record or verification process does not match the work behind it. Consistent verification creates friction before false documents become a larger safety problem.

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

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7 smuggled migrants die in sealed rail container, 11 face life sentences – FreightWaves

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Florida Lottery: USPS worker accused of stealing winning ticket faces 6 charges

Phil Brink — Mon, 03 Aug 2026 12:42:42 +0000

A Florida Lottery player mailed a winning Pick 4 ticket to its intended destination. The $2,600 prize never arrived. Instead, investigators traced the entry to the Florida Lottery’s Miami District Office. Authorities accuse a USPS letter carrier of redeeming it herself.

Florida Lottery Special Agents arrested Lekaysha Lockhart on July 23. The agency worked with investigators from the USPS Office of Inspector General. Officials identified Lockhart as the person who redeemed the winning ticket. The transaction occurred June 19 at the Miami office.

Missing prize triggers joint investigation

The inquiry started after the player reported that her winning Pick 4 ticket disappeared in transit. A Florida Lottery Inspector traced the claim to Lockhart. Special Agents and USPS OIG investigators then conducted a joint operation. That effort resulted in her arrest, according to the Florida Lottery.

Officials reported that Lockhart admitted to stealing the ticket after entering custody. They also reported that she admitted to redeeming the prize. The release did not identify the player.

“Our players deserve confidence that every Lottery prize is protected through strong security measures and diligent oversight,” Florida Lottery Secretary Reginald D. Dixon said. Dixon credited the agency’s Division of Security for its work. He also thanked USPS OIG investigators and the Broward County Sheriff’s Office. The agencies worked together during the investigation and arrest.

Charges span multiple judicial circuits

Lockhart faces grand theft and dealing in stolen property charges. She also faces a count of filing a false claim for payment. Prosecutors charged her with two counts involving a two-way communications device. The case also includes a mail theft charge.

The Florida Lottery reported that the alleged conduct occurred across multiple judicial circuits. Prosecutors will handle the cases separately. The agency’s Division of Security investigates complaints involving lottery tickets and prize claims. Its Special Agents work with law enforcement partners on criminal cases involving game integrity.

The Florida Lottery reported more than $51 billion in transfers supporting Florida education since 1988. It also reported paying more than $110 billion in prizes during that period. The agency operates with more than 13,600 retailers across the state. Officials described the arrest as part of ongoing efforts to protect players.

Why it matters: Valuable documents can move through routine channels without clear custody controls. This case shows how quickly a missing item can become a fraudulent claim when verification breaks down.

In my opinion, CFCO training could help organizations spot similar weaknesses when valuable documents or shipment records change hands. It stresses verification and documented controls over assumptions, though no process can prevent every theft.

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

FBI says billion-dollar criminal network included cargo theft – FreightWaves

7 smuggled migrants die in sealed rail container, 11 face life sentences – FreightWaves

$20M in cocaine found beneath floorboards of commercial truck trailer at California border – FreightWaves

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Sugar strike that prompted ports shutdown ends, longshore union returns to negotiations

Stuart Chirls — Mon, 03 Aug 2026 12:00:00 +0000

After 42 days on the picket line, union warehouse workers at C&H Sugar’s Crockett, California refinery have returned to work under a 60‑day extension of contract negotiations.

The pause in the strike that triggered a brief sympathy walkout at three California ports – International Longshore and Warehouse Union Local 6’s first walkout at the plant in nearly a century – comes as the sides return to talks over retiree health benefits, overtime rules, and sick days at one of the largest cane sugar refiners in the United States.

The dispute began when the union’s contract expired on June 1 of this year and negotiations quickly stalled. On June 15, roughly 90–93 unionized warehouse employees began an open‑ended strike.

The job action disrupted flows of raw cane sugar into the Crockett refinery, which typically processes about 6 million pounds per day. In response, C&H kept operations running with replacement workers and rerouted some raw sugar through other terminals, including Richmond, where ILWU Local 10 longshore workers refused to cross Local 6’s picket lines, widening the dispute’s footprint along the Bay.

Tensions escalated on July 22, when a protest outside the refinery turned confrontational and nine protesters were arrested.

By late July, federal mediators had entered the picture, and both sides met for marathon bargaining sessions. On July 27, C&H and ILWU Local 6 issued a joint statement announcing a return to work and a 6-day extension of negotiations. C&H agreed to withdraw its impasse declaration, which had cleared the way for more aggressive use of replacement labor.

Under the arrangement, workers resumed their posts beginning Wednesday, July 30, with the understanding that they will remain on the job at least through September 30, 2026, while bargaining continues. Union leaders say the goal is to bring C&H’s senior executives more directly into the talks and lock in a fair agreement before the extension expires.

The involvement of other ILWU locals, particularly Longshore Local 10’s refusal to cross picket lines, also highlights how a single plant dispute can ripple through the regional logistics network. In a supply chain already sensitive to port and terminal disruptions, the C&H strike underscored the strategic leverage warehouse and dock workers hold at critical nodes.

Read more articles by Stuart Chirls here.

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The post Sugar strike that prompted ports shutdown ends, longshore union returns to negotiations appeared first on FreightWaves.

Reindeer bets Enterprise AI’s next battle isn’t the model

Thomas Wasson — Mon, 03 Aug 2026 11:00:00 +0000

CHICAGO — The market for enterprise AI agents is not being won on model quality anymore, according to Yoav Naveh, founder and CEO of Reindeer, and that shift is reordering where startups plant their competitive bets.

Speaking with FreightWaves at the Supply Chain AI Symposium in Chicago, Naveh laid out a picture of an industry that has burned through two waves of adoption without unlocking the returns executives expected, and is now chasing a third.

“The first wave: assistants. Everybody got a copilot, Claude, ChatGPT,” Naveh said. “We’ve seen a lot of success with assistants around software engineering. Coding agents work really well. Maybe legal, not as well. But generally we haven’t seen assistants make companies 10x or 100x more efficient.”

The second wave targeted the call center, i.e. customer support. “I think that has been a very big low-hanging fruit, really,” Naveh said. “One big workflow, a lot of similar case types in one. I definitely see some success there.”

Now, Naveh said, enterprises are chasing the wave that actually touches the bulk of their labor cost: core operations. “Let’s take all these core workflows that represent 70, 80% of the work that everybody does,” he said.

That is a far messier market than customer support ever was. Naveh estimates these workflows number in the dozens, if not hundreds, inside a single enterprise, spanning finance, procurement, treasury, accounting and supply chain, often with no single department owner.

The Nuance Problem Investors Are Missing

Naveh’s clearest data point on why this market resists one-size-fits-all software comes from a client he described as one of the largest consumer packaged goods companies in the world.

“They say, ‘Hey, we’re doing accounts payable in my company,’ but your accounts payable is different from their accounts payable,” Naveh said. “We work with one of the largest CPG companies in the world. Five different departments, five different accounts payable processes within the same company.”

That fragmentation is the reason Naveh is skeptical of the forward-deployed engineer model gaining traction across the AI startup world, where vendors embed technical staff inside a client to hand-build an agent for one process at a time.

“I’m going to throw three engineers in and sit with your team and build the agent for that particular process. Are they ever going to come back and be available to be sent to another department, or are they stuck maintaining whatever they built as processes change and evolve?” Naveh said. “I think the math doesn’t work because it doesn’t scale.”

Why the Model Won’t Be the Moat for Enterprise AI Agents

Reindeer’s bet runs against a common assumption in enterprise software circles: that owning or fine-tuning a proprietary large language model is a durable edge. Naveh argues the opposite is happening.

“Strong belief that LLMs are going to be a commodity,” Naveh said. “We see that open-source models are maybe six months behind the frontier models. But what we’re thinking is, I don’t need the frontier model for everything anymore.”

“We work now with a large European insurance company. They decided to build their own LLM. We’re happy to plug in their own LLM,” he said. “We’re happy to restrict the list of allowed LLMs based on the company’s data privacy policy, and figure out how to run their case with what’s whitelisted.”

That view puts pressure on any competitor whose pitch centers on model superiority alone. If the underlying model becomes interchangeable, differentiation has to come from somewhere else.

Building Is Easy. Maintaining Isn’t.

That somewhere else, in Reindeer’s model, is the maintenance layer: detecting when a workflow drifts, reconciling the change and adjusting the agent without a new engineering ticket.

“Even after you deploy an agent, the workflow keeps changing,” Naveh said. “If you don’t have a method to have agents detect these changes, reconcile, self-heal, self-learn, we’re not really going to be able to realize what agents can do for you.” Reindeer built what Naveh calls a two-loop system to handle that drift.

Naveh said the economics of building have already shifted in the industry’s favor, which is exactly what makes maintenance the bottleneck now.

“I think everybody wants to build. Building is easy,” he said. He described building an internal dashboard for a colleague in a single evening, then fielding a steady stream of bug fixes and feature requests afterward. “I don’t want to do that,” he said. “That’s not fun. Maintaining is not fun or easy.”

“Five years ago you couldn’t build anything, now you can build amazing things,” Naveh said, describing the gap between a novice and an expert engineer as dramatically reduced by tools like live coding assistants. “The expertise that is needed now is exactly what you said, around all these different things after it’s built, and make sure that what was amazing on the first evening you released it is still amazing six months later.”

For enterprises evaluating AI vendors, Naveh’s framing suggests a different diligence question than the one most are asking. Instead of which company has the best model at POC stage, the more durable question may be which one can keep an agent accurate long after launch, as the workflow underneath it keeps moving.

The post Reindeer bets Enterprise AI’s next battle isn’t the model appeared first on FreightWaves.

How ArcBest Defied Expectations with Stellar Q2 Performance

FreightWaves Staff — Mon, 03 Aug 2026 04:11:18 +0000

SummaryView Transcript

ArcBest’s Q2 earnings reveal a significant 650 basis point improvement in its asset-based division. CEO Seth Runser unpacks how the company achieved these impressive numbers, sharing insights into market demand signals and their integrated logistics strategy. Discover how ArcBest leverages its 100+ year legacy, brand consolidation, and new digital platform to thrive amidst industry disruption.

ArcBest’s asset-light division produced just over $6 million in operating income in the second quarter — more than four times the $1.5 million the segment generated for all of 2023 — as tightening truckload capacity pushed more shippers toward the Fort Smith, Arkansas-based integrated logistics company. The asset-based operation posted an operating ratio approaching 90%, improving roughly 650 basis points sequentially from the first quarter, well above the company’s typical seasonal gain of 300 to 350 basis points.

CEO Seth Runzer told FreightWaves the results reflect both disciplined execution and a market shift in which shippers are gravitating toward carriers with scale and staying power. “When you look at centurion companies, companies that have been around more than 100 years, really the two things that stand out, it’s a great culture and it’s the willingness and adaptability to change,” Runzer said. ArcBest was founded in 1923 and has operated through multiple economic cycles, including the post-deregulation shakeout that eliminated most of its pre-1980 LTL rivals.

On the demand outlook, Runzer was measured. He noted that the PMI has held in expansion territory for five to six months after four years of contraction, and that the company’s sales pipeline remains strong. But he stopped short of calling it a demand-led recovery, pointing instead to supply-side dynamics — particularly truckload capacity tightening — as the primary driver of improved LTL volumes. Bright spots include data center construction and ATV shipments, while apparel remains soft. Heavier shipments above 10,000 pounds are beginning to migrate back into LTL networks, an early-cycle signal Runzer described as encouraging but still modest.

“Disruption is the new normal. And if you prepare and build the company on a great foundation, you’re always focused on the future. Good things will happen, and that’s really what we’ve done at this company and what makes us so special.” — Seth Runzer, ArcBest president and CEO

ArcBest also recently consolidated its sub-brands — including Molo and Panther — under the single ArcBest name, a move Runzer tied directly to customer and employee feedback. The company began positioning itself as an integrated logistics provider in 2017, growing through acquisitions and organic investment. The brand simplification, he said, removes the cost and complexity of maintaining separate marketing budgets and go-to-market teams across four distinct brands. Customer reaction has been positive, with some saying the change was “long overdue.”

To support the unified brand, ArcBest launched ArcBest View, a multimodal digital platform roughly three to four years in development. The tool allows customers to track, book, quote, and optimize shipments across all modes in a single interface — a departure from the company’s prior website, which Runzer said was built around an LTL-only model. About 2,500 active customers have already signed up, and Runzer said early feedback describes it as the best supply chain visibility tool users have encountered.

On the asset-light leadership front, ArcBest hired Mack Pinkerton to run the division. Pinkerton previously led C.H. Robinson’s NAS product, which Runzer identified as the largest freight broker in the United States. Runzer said the truckload brokerage business — anchored by the Molo acquisition — originally complemented an in-house truckload offering that had been generating roughly $300 million to $400 million in revenue from largely transactional customers. He said the company is now in “the second or third inning” of its asset-light buildout, with significant runway remaining.

ArcBest’s asset-light segment earned over $6 million in Q2 operating income, up from $1.5 million for all of 2023, driven by tightening truckload capacity.
The asset-based LTL operation improved nearly 650 basis points sequentially in Q2, roughly double the company’s typical seasonal gain.
ArcBest consolidated Molo, Panther, and other sub-brands under a single ArcBest identity and launched a new multimodal digital platform called ArcBest View with 2,500 active early users.

Speaker 1 [0:00] We have a great treat. This is earnings season. This is an opportunity to talk to the folks that are actually moving the freight. And our first guest, we have Seth Runzer. He’s the president and CEO of ArcBest, one of the most storied LTL carriers, if not overall transportation carriers. Has been around for a long time, for decades upon decades, well pre-regulation, is now one of the— You survivors of pre-deregulation that’s still around. Seth, welcome to FreightWaves Today.

Speaker 2 [0:35] Yeah, thanks for having me, Craig. I appreciate being on. Sorry about those technical issues. I think we got them resolved.

Speaker 3 [0:41] We had—

Speaker 1 [0:42] it gave us the opportunity for Julie and I to catch up on— by the way, technical issues are a part of putting on FreightWaves Today.

Speaker 4 [0:50] Live TV is, yeah.

Speaker 1 [0:51] Live TV has its own set of things, so you’re certainly excused. On that, but let’s talk about an area that you don’t need an excuse, is your earnings. You guys are absolutely rocking and rolling. How does it feel to be CEO of a business in this climate when, you know, you guys are putting up some really impressive numbers compared to historically how this market’s been?

Speaker 2 [1:12] Yeah, it feels great. So you think about our performance normally sequentially from the first quarter to the second quarter, We improved about 300 basis, 350 basis points. That’s really just the seasonality. The first quarter’s always kind of the weakest. And we improved about 650 basis points within our asset-based operation. And then asset light saw a meaningful step up as well. So really proud of the team for them executing. It’s a combination of factors when you think about everything that’s going on with supply, demand, we’re starting to see some early signs there. And then just what we’ve seen in the marketplace as customers are navigating all the disruption and complexity They’re really turning to those trusted providers that have 103 years of experience like us. So it’s been a great feeling to get out there with earnings this week and spend time with our people talking through what we were able to accomplish together in the second quarter.

Speaker 1 [2:07] Well, Seth, let’s talk about demand. You talked about demand feels like it’s recovering, you’re seeing signs of recovery. You know, that is a, I would say in many ways, a lot of folks have not come in with conviction about demand. I think everyone recognizes that this is a capacity-led recovery. I don’t think we dispute that. I don’t think you dispute that at all. But let’s talk a little bit about the demand side. That’s an intriguing perspective that’s different than what a lot of people believe is happening.

Speaker 2 [2:33] Yeah, I think demand, it’s kind of in the early stages, I would say. We’re not anywhere near like a mid-cycle or even an upcycle. It’s really supply-driven, like you said. That’s really what’s driving a lot of the things. So customers are trying to navigate as truckload capacity tightens, They’re looking to logistics companies like ArcBest to help them navigate all those different disruptions. And we saw that come through in results, which was great. But we are seeing some early signs. You know, it’s good to see that PMI has been in expansion territory for the past, you know, 5 to 6 months after 4 years of it being depressed. But what really encourages me is our pipeline continues to be strong. We continue to have great conversations with customers. I feel like as that truckload capacity tightens, it kind of turns the light on, hey, we wanna partner with companies we know, like, and trust that can actually navigate this with us. And that’s what’s been so impactful throughout the quarters. Our pipeline’s only strengthened, but I wouldn’t say it’s robust demand yet. I think it is supply-driven, like you said, but we are kind of seeing some early signs, especially as we’ve seen some of this more truckload-rated freight kind of come into LTL, very, very small amount, but we’re starting to see those early signs of those plus 10,000-pound shipments making their way back into our network. And they just work better in an LTL environment, so. So I’d say we’re early stages, but yeah, definitely supply is what’s driving a lot of the results you’re seeing out of all the carriers who have announced this week.

Speaker 1 [4:03] Seth, we’ve been watching the LTL. We know that LTL recovers a little bit later than truckload typically does. You had any tightness in the truckload market? Because shippers take advantage of direct point-to-points not being handled through a dock network when they can consolidate. And then when the freight market tightens, a lot of that LTL volume, as well as in the earliest parts of the cycle, they’re building out Larger truckloads because larger volume segments. We only recently, you know, Cassis Shipment Index, which is more weighted to LTL than it is truckload, is reflecting the fact exactly what you’re seeing. Do we think that we’re well past the point where this market truly is recovering from a demand side?

Speaker 2 [4:44] Yeah, I think we’re still in the early stages of the market recovering from the demand side. There’s still just, if you look at historical averages, and like you said, we’ve been around a long time, so we’ve seen a lot of cycles. When you look at a lot of the subsectors within that, there’s still weakness in a lot of different places, but there’s also bright spots in a lot of places. I talked about it on our earnings call the other day, the data center buildout, we’re seeing a lot of demand there. Customers who are shipping ATVs, we’re seeing a lot of demand there. But there’s other areas like apparel that we’re not seeing demand. So, it’s uneven, I would say. So I think as demand strengthens, that’s going to ultimately improve results for everybody. But the way we’ve built this company and transformed over the last 10 years is we’re an integrated logistics company. So we can go to market and we try to say yes to our customers regardless if they’re looking to move truckload to LTL or go to a managed solutions or they need a more premium service. That’s really what we’ve designed this company to do is say yes to our customers no matter what’s going on. in the supply or demand environment.

Speaker 4 [5:52] Yeah, congratulations on a near 90% OR on your asset portion of your business. But I do want to talk a little bit more about that asset-light part that you just alluded to. So 28% revenue increase, 15% increase in daily shipments, revenue per shipment up 11% to 12%. So it seems like everything is heading in the right market. Are you feeling the capacity squeeze on the other side of that? How has sourcing been?

Speaker 2 [6:18] Yeah, I think sourcing has been good. When you have the history that we have, we build long-term partnerships with a lot of our partner carriers, which is great. So I’m really proud of the team and the execution. If you look at what happened in asset light in the second quarter, we produced a little bit over $6 million in operating income. And when you compare that to all of 2025, we only made $1.5 million. So that shows you the progress on all the initiatives that we outlined at our Investor Day last September in New York City. Yeah. Really comes around to profitable growth, making sure we’re growing with the right customers, making sure we’re efficient with our resources, and make sure we’re partnering with companies that trust us and we trust them to haul our customers’ freight. And that’s been impactful. So with all the partnerships we have, we haven’t really felt the capacity crunch too much because, like I said, the way we’ve built this company is find a way to say yes. And we have a lot of different partnerships which allow us to do that.

Speaker 4 [7:17] So certainly a culture of trust across all of the business units. Would you talk a little bit about the decision to have Molo, Panther, those other brands move under the ArcBest name?

Speaker 2 [7:30] Yeah, yeah, we, so we went to market as an integrated logistics company back in 2017, and we’ve transformed, and we’ve done some of that through M&A, some of that through organic investments, and that really came from customer feedback. They were telling us, hey, we don’t just have LTL. We have truckload, we have managed, we have expedite, we have all these different solutions. So that really is what we started to do. So the announcement a few weeks ago where we consolidated the brands underneath ArcBest, that was really about simplifying our brand strategy to say, okay, we are ArcBest, that integrated logistics company, and we have solutions underneath, whether it be truckload brokerage, LTL, LTL brokerage, any of those areas. That’s really what it was about, was simplification. and going to market as One ArcBest. And we really heard a lot of that from our customers, from our employees that said, hey, why do we have all these sub-brands? So this is really the next step in that evolution to make it simpler and easier for our customers to access all of the solutions that we have. The feedback I’ve heard from customers and employees alike has been, has been very positive, kind of this long overdue type scenario. So I’ve been really encouraged by everything I’ve heard from the team and from our customers since the announcement came out.

Speaker 1 [8:48] Seth, you guys have been around since 1923. You’ve survived multiple world wars. You’re coming out of the first pandemic, or the major, the 1920 pandemic. You guys have had a storied history. One of the things that we’ve talked about when you guys made the announcements on the Molo and Panther consolidate— brand consolidation, we’ll call it— was the fact that the culture of ARKBEST is this legacy, very structured organization. Is one of the reasons you’re so successful. And we’re big fans of history and your history in particular as a pre-deregulation carrier. Molo had a very different culture. It was the Chicago Central, the Silvers, Andrew Silver, sort of a freight bro from Central Casting. When that announcement was made years ago, from where I stood, it seemed like a very strange or at least a counterculture to the typical Art Bus culture that we know. Is that part of the reason to rebrand is to change the way that business operates? Or what has that been like in terms of the overall integration into the overall ArcBest organization?

Speaker 2 [9:58] Yeah, so I’ll just take a step back to a few years before the Molo integration. So before we even announced the move. So really what we were hearing from our customers was, hey, we really trust you for LTL. You’re doing a great job with Panther and Premium Expedite, but your truckload offering really wasn’t as strong as it needed to be. So we had our own truckload brokerage at the time. It was probably $300 to $400 million, a lot of transactional-type customers. But what Molo brought and what was really attractive about them was, A, it filled a strategic gap for us because our customers were asking for truckload services, and B, what they built was really a service-first mentality. And that’s what ArcBest is known for, a premium experience for our customers. And that’s what made it so attractive to us. So we got to fill a strategic gap. They believed in being customer-led and servicing customers with excellence, and it just really fit perfectly. So as we’ve integrated, really what it’s done is it’s expanded the capabilities because all of our customers, we have about 30,000 active customers, they all have truckload needs. It’s their biggest spend. So by having a really strong offering in what we purchased with Molo, it only strengthens those relationships with customers. And we’re kind of past the integration phase, and I feel great about the progress we’ve made, and the team’s done an excellent job. And I’m really excited that we hired Mack Pinkerton to come in and lead our asset-light operation. He led CHR’s, you know, NAS product, and that’s the largest broker in the United States. So he’s really helping transform us into what we can ultimately be. And I feel like we’re in the second or third inning. We got a long way to go to get to where we ultimately want to be.

Speaker 1 [11:41] Well, that alumni network, the C.H. Robinson alumni network, there’s no denying that it is persistent across this industry. Specifically out of Chicago, that Chicago Central office, the old American Backhaulers office, has written a lot of the success of Chicago. Molo being a Chicago-based broker, I would argue 3rd or 4th generation, Julie, in terms of brokerage. If you start to think of the evolution of freight brokers, sort of the American Backhaulers, US Express was a big American Backhauler, C.H. Robinson Central.

Speaker 3 [12:11] Right.

Speaker 1 [12:12] This evolution, I think I would argue that Molo is sort of the 4th generation maybe.

Speaker 4 [12:16] So what’s the third?

Speaker 1 [12:18] Well, you have Echo. Echo is sort of that third. Command, even you could argue Command.

Speaker 4 [12:23] I mean, it goes from Backhaulers to the original CH, even some of those expansions. Command, uh, maybe even Coyote.

Speaker 1 [12:29] That group, Echo, Coyote would be maybe fourth. And now we’re third or fourth. But, but you’re in this sort of fifth generation, and really Chicago has become such a high concentration of freight brokers, its own culture. Like when you describe to somebody in freight about the Chicago Freight floor. Everybody knows what we’re talking about. What is what is going to change for you guys with Molo becoming an ArcPress? I’m sorry, I haven’t had a lot of sleep this week, so if I fumble my words, it’s but but what is the goal here in terms of of what can customers expect that’s going to change? Where are the where are the investments going to be made?

Speaker 2 [13:07] Yeah, to me, it’s not a matter of what’s going to change; it’s what’s what’s going to strengthen, and that’s really what we’re trying to do with this brand is we’re trying to. simplify our approach to the market, make it easier to access our solutions, and ultimately combine all the capabilities that we have as one ARCBEST into what our customers can get access to. So we really focus on 3 strategic pillars: growth, efficiency, and innovation. And I feel like across each of those pillars, it’s going to only strengthen with the brand. We don’t have to spread out our advertising dollars among 4 different brands. We don’t have to have different teams and different swag and all the different things, right? So ultimately, We want to be that integrated logistics company, and we feel like this is just the next step in the evolution of that strategy that we’ve been embarking on for over a decade. And this change is only going to strengthen and simplify and make us move faster in the market that we live in today.

Speaker 1 [14:02] Seth, if you’re looking for a place to park advertising dollars, just call us up.

Speaker 3 [14:07] Media is a tough environment.

Speaker 1 [14:08] You think trucking’s hard?

Speaker 3 [14:10] Media sometimes can be a little harder. We’d love to We’d love to talk about that.

Speaker 1 [14:14] Panther 2, also a storied name, not a legacy name in terms of the history of ArcBest, but a name that if you know expedite, Panther 2 has been a market leader. You guys acquired it almost, I think, 17, 18 years ago. Is it going to be ArcBest Expedited? What’s the future of that business?

Speaker 2 [14:35] Yeah, it’s also going to be ArcBest. And then underneath ArcBest, the logistics company, we describe it as premium logistics because they don’t just do expedite. They do temperature validated, they do Department of Defense. It’s kind of that premium logistics shipment cannot fail. So it’s not just, hey, we’re going to shut down a product line and we got to expedite that shipment. It’s become so much more than that. And that’s what makes me really proud. So I think what’s going to happen is it’s just going to continue to simplify exactly what I talked about. And what’s been interesting is as we’ve had customer conversations around the branding change, they’re like, well, we already thought Panther was our best. And that’s because it was. We’re all ArcBest team, right? So this just makes it a lot clearer to say, hey, ArcBest is a logistics company, can offer all these different services. What is your problem? What is your solution that you’re trying to find? Because we’ll find a way to say yes, whether that’s truckload brokerage or managed solutions, any solution. We’re able to say yes because that’s really what builds a trusted relationship over the long term and why we’ve stood the test of time.

Speaker 4 [15:41] So Seth, I don’t think we can talk about premium logistics or integrated logistics offerings without talking about technology. So I think I recently read that you just launched a new product called ArcBest View. Can you tell us what that is, what it does, and why now is the right time to roll it out?

Speaker 2 [15:59] Yeah, I think about ArcBest View, it’s something that we started building probably, I want to say, 3 or 4 years ago. And really, when you think about our traditional customer platform, it was our website, it was arcb.com. Well, that was really built based off of an LTL environment because that’s most of our history until we’ve made this transformation over the last decade. So what we heard from customers is they wanted a single source of the truth. They wanted to go to one place and find where they could track, book, quote, optimize their supply chain, get everything. And the old experience that we had, just they had to go multiple places to navigate that. We started building that platform side by side with customers from the very start. And that’s what I think is impactful is because you can build a great product, roll it out and be like, hey, I hope everybody likes this. But if you build it side by side with partners we’ve had for 10, 20, 30 years, they’re going to tell you what’s going to work. And that’s been very impactful for us. So really what that platform is, some people have described it as, hey, it’s just a refresh of arcb.com and it’s not. It is a completely new digital platform that I think is differentiated in the marketplace because now you can track, book, do all of those things across all modes. And that really is differentiating, differentiating for us. We have about 2,500 active customers signed up for it so far, and the feedback has been really incredible. And that’s what makes me feel so good as we roll out further enhancements and continue to refine. we’ll start getting more customers signed up for it. But a lot of customers are saying, wow, this is the best tool I’ve ever used. I have now complete supply chain visibility, which adds to that simplicity that we’ve been talking about, right? We wanted to simplify our customer-facing tools so they can navigate everything that’s going on in their supply chain and not have to pick up the phone and call. They can self-serve or they can pick up the phone and call. So I’m really proud of the team that built that, got it out there, and we’ll continue to make enhancements as we move forward.

Speaker 1 [18:00] Seth, what are you guys doing in Arkansas that is enabling these old school legacy leaders? We covered JB Hunt extensively on the show. They’re killing it on their intermodal business. You guys are, you know, you, you completely transformed the business from an old school, sleepily sort of regulated trucker into one of the most dynamic logistics companies. Is there something special specifically about Arkansas that enables, I mean, when I go through the list, you guys were number 12.

Speaker 3 [18:30] Yeah.

Speaker 1 [18:30] in 1980 according to Transport Topics Top 100. And I go through the list of those carriers that are still around. Most of those carriers, United Parcel, Roadway, Consolidated Freightway, Yellow, McLane, Ryder Truck, North America Van Lines, Specter Red Ball, PIE, Allied, Smith Transport, Arkansas Best. You guys have been around. What is going on down there?

Speaker 2 [18:55] Yeah, well, we always, the way we position the company, like I said, we’re customer-led. And at the end of the day, if you listen to your customers and design solutions around them, that’s what’s going to stand the test of time at the end of the day, right? And we also, leaders before me, present leaders have built an amazing culture at our company. And that’s really, if you look at centurion companies, companies that have been around more than 100 years, really the 2 things that stand out, it’s a great culture and it’s the willingness and adaptability to change. And that’s what we’ve done throughout all the time. So we’re not thinking about next month or this quarter or next quarter. We’re planning 3, 5, 10 years out. That’s really the way we focus. And we always say internally, we have to focus on disrupting ourselves because if we don’t, someone else will. So I don’t think we’re that company that you described, the old school company. We’re focused on technology, we’re focused on AI, all the different things. But at the end of the day, it all comes back to where does the customer find value? And if you stay close to your customers, you have great people, you’re gonna deliver some amazing things in the future.

Speaker 1 [20:06] I think it’s an exception, Seth, to the rule. I mean, the reality is that you guys deserve a lot of credit for going through all of these iterations. I mean, we’re in a new cycle, we’re in a new market, it feels like. I mean, Matt, Dad, you’ve talked about the fact you’ve been in trucking since the 1960s. You talked about the fact that this freight recession and this market is completely different than any that you’ve experienced in your lifetime. But you guys have made it through another cycle, Seth. There must be some formula for that that has just enabled you to thrive so well that I think is really intriguing because so many of your other pre-regulation competitors just never made that transition.

Speaker 2 [20:41] Yeah, I agree. And a lot of that is just paying attention to what’s going on, focusing on what matters the most, and making the right decisions with integrity at the top of your mind. So I think about— I took over ABF and ran our LTL division in 2021 at the height of the pandemic. And I swear, every time I picked up the phone, it was like a new thing was going on. The East Coast ran out of fuel because the pipeline got hacked, or you couldn’t hire drivers, or you can’t buy trucks anymore. The list goes on. And then a 4-year freight recession. So it’s just, you have to know in the back of your head that disruption is the new normal. And if you prepare and build the company on a great foundation, you’re always focused on the future. Good things will happen, and that’s really what we’ve done at this company and what makes us so special.

Speaker 1 [21:26] Well, Seth, thank you so much. I mean, an institution.

Speaker 4 [21:29] Yeah.

Speaker 1 [21:29] Like I love talking to these. Look, I’m a big fan of history. I’m building a history museum in Tennessee. We’d love to have people.

Speaker 2 [21:36] Oh, Spirit, I’ll come down.

Speaker 1 [21:38] Be the largest indoor miniature transportation museum in the world. If the Smithsonian was doing transportation across all modes, it would be the Smithsonian. Real excited about that. Well, I have to have you out there. Also, the International Transportation Hall of Fame, we’re gonna announce that, that will be there as well. Certainly someone along the tenure of ArcBest deserves that.

Speaker 4 [21:57] Yeah.

Speaker 1 [21:58] I mean, amazing. I love these, I love these businesses that have seen so much, Julie, so much history, and yet are talking about new technologies and doing it right.

Speaker 4 [22:09] Yeah, I mean, I think it just shows you that in business and in life, probably the most important skill you can have is adaptability.

Speaker 1 [22:15] And you gotta survive.

Speaker 3 [22:17] You gotta be—

Speaker 4 [22:18] Like the coyote, right? That’s why they’re everywhere, ’cause they’re the most adaptable animals. Did you know that?

Speaker 3 [22:22] Exactly.

Speaker 4 [22:22] I watch Wild Cats with my son.

Speaker 1 [22:24] Most adaptable animals except for in my yard.

Speaker 4 [22:25] No, they are. Like, I think they are.

Speaker 3 [22:26] They figured out how to do it.

Speaker 1 [22:28] Anyways, well, Tessa, thank you so much for coming in to FreightWaves today. Would love to have you back and best of luck in your journey as you continue to build out your technology. And we know that you’ve got a lot going on over there and congratulations on great earnings. And we look forward to reporting next quarter. Hope to have you back.

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Freight Market Update: 5 Signals Capacity Is Tight

FreightWaves Staff — Mon, 03 Aug 2026 04:10:55 +0000

SummaryView Transcript

Freight market update: 5 pillars explaining why capacity is tight and rates are holding up. Backed by SONAR data and Q2 carrier earnings, this breaks down tender rejections, spot rates, steady demand, dedicated capacity shifts and why driver recruiting is getting tougher. If you want the real takeaway fast: this looks more supply-driven than demand-driven. Public carriers are saying it, and the data lines up. #FreightMarket #SONAR #TruckloadRates

The national Truckload Rejection Index stands at 14.36% — well above its six-month average of 10.9% — and has held elevated for months rather than spiking and retreating, according to FreightWaves SONAR data presented in a recent market update. Flatbed rejections are running at 23.5% and refrigerated at 19.46%, both outpacing the national average. The sustained nature of those levels, rather than any single week’s reading, is the clearest sign that capacity is not self-correcting quickly.

The analysis identifies five interlocking pillars driving the tightness: capacity is leaving the market, spot rates are strong and durable, demand is steady but not surging, shippers are pivoting toward asset-based and dedicated capacity, and driver recruiting is becoming materially harder. Each pillar showed up in Q2 earnings calls from major public carriers, including Knight-Swift, Werner, and J.B. Hunt, lending independent corroboration to the SONAR data.

On capacity, Knight-Swift management attributed rapid tightening to supply-driven dynamics, with spot rates exceeding normal seasonality and tender rejections reaching levels the carrier had not seen since 2021. Both Knight-Swift and Werner specifically called out FMCSA and DOT efforts to revoke invalid CDLs and shut down noncompliant driving schools as forces removing low-cost, noncompliant capacity from the market. Werner also flagged ELD providers exiting alongside the school and driver removals.

“Rates can rise even when diesel is falling, and we see that in the data.”

On rates, FreightWaves’ National Truckload Index showed a modest dip in mid-June before resuming its climb. Stripping out fuel costs — the key durability test — spot rates continue to move higher independent of diesel prices, indicating that willingness to pay and lack of capacity, not fuel, are the primary drivers. Knight-Swift’s CEO characterized the current cycle as supply-driven rather than demand-driven, a view consistent with volume indexes in SONAR remaining relatively flat to modest rather than surging.

Where volume is rising is in intermodal. J.B. Hunt reported higher intermodal volume attributed to rising fuel costs and constrained truck supply pushing freight toward rail — a mode shift, not a broad demand increase. On the dedicated side, J.B. Hunt said its dedicated pipeline was at record levels, citing a tight driver market, regulatory pressures, and customer demand for reliable capacity. Werner CEO Derek Leathers noted on his company’s earnings call that organic dedicated business is growing as a whole, not solely from fleet acquisitions.

The driver recruiting picture is worsening across the board. J.B. Hunt flagged increased sign-on bonuses and targeted wage increases as a potential margin pressure point going forward. With the eligible driver pool shrinking under regulatory enforcement and a healthier freight market giving drivers more options to chase higher pay, carriers are absorbing recruiting costs that are unlikely to recede quickly. The convergence of all five signals, each confirmed by both SONAR data and the largest carriers’ own reporting, suggests the current tightness reflects structural shifts rather than a temporary seasonal pattern.

National tender rejections are at 14.36%, well above the six-month average of 10.9%, with flatbed at 23.5% and refrigerated at 19.46%.
Knight-Swift says tender rejections have reached levels not seen since 2021, driven by supply-side dynamics including FMCSA and DOT crackdowns on invalid CDLs and noncompliant driving schools.
J.B. Hunt reports a record dedicated pipeline and rising sign-on bonuses as driver recruiting tightens, flagging increased labor costs as a potential margin pressure point.

Speaker 1 [0:08] Okay, today’s Sonar Update, I really want to talk about 5 key pillars that I’m seeing happening in the market and then back those up with sonar data and some information from recent releases we’ve been tracking and we’ll continue to talk about on the show as well. So the 5 capacity— the, the 5 pillars are: 1, capacity is leaving the market. We’ve been talking about that at length length and that carrier exits continue with regulatory enforcement and the FMCSA and DOT revoking invalid CDLs as well as shutting down non-compliant CDL schools. The second pillar is rates are strong and durable. We’re continuing to see spot rates particularly remain elevated and contract rates continuing to rise. Demand is steady even though it hasn’t been increasing and is the third pillar. The fourth pillar is shippers are moving towards asset-based and dedicated capacity. We’ve seen that in some of earnings calls, and that makes a ton of sense based on the current regulatory environment and liability concerns. And then the 5th pillar is that the tightness in the market and lack of available capacity, as well as the raise— the rise in rates and a healthier freight market, is making driver recruiting significantly harder. So to back that up with a little bit of evidence both from Sonar and earnings, so pillar 1, capacity is leaving the market. We can see that in the Sonar Truckload Rejection Index, stri.usa. Okay. On a national level at 14.36%, which is still well above the 6-month average of 10.9%. We’re seeing especially high continued tender rejection levels at 23.5% for flatbed and 19.46% for refrigerated. So, those 2 are running even hotter than the overall national average of all rejections, even though they’ve all cooled a bit from the early summer peak. And I’ll talk a little bit more about why I think some of that is happening in one of the other pillars. But really, we’ve seen elevated rejections sustained over months, not just a spike. So I think that that’s really good evidence the capacity is not self-correcting quickly. To talk about some earnings that, that also back up this thesis of mine, Knight-Swift specifically, their management in their call attributed rapid, rapid tightening to supply-driven dynamics with spot rates exceeding normal seasonality and tender rejections reaching levels that they’ve not seen since 2021. And that’s in their own data, their own tender rejections, not just Sonar. And we talked about that showing up in Sonar data as well. They also specifically called out the FMCSA and DOT efforts to revoke invalid CDLs and shut down noncompliant driving schools to remove some of that low-cost, noncompliant capacity from the market. Werner also pointed to regulatory pressures removing shadow capacity as ELD providers exit the market alongside driver and CDL school removals. So rejections aren’t just elevated. They’ve stayed elevated for months. And that’s backed up by our data as well as to the largest public carriers. Pillar 2 is rates are strong and durable. So the sonar evidence is that the NTI, our truckload National Truckload Index tracking spot rates, has remained incredibly high. It had a mid— a bit of a slump, which is still elevated in mid-June, but it’s beginning to rise again. Even when you back out fuel, which makes really the key durability check to ensure, you know, that the rates aren’t only rising based on fuel costs. We continue to see a strong spot rate and we’re not seeing those diesel prices and that NTI spot rate necessarily move in tandem, which to me speaks to the fact that spot rates are remaining elevated and moving based on lack of capacity and willingness to pay, not just based on diesel rates going up. Rates can rise even when diesel is falling, and we see that in the data and you’ll see that in the graphic. Pillar 3 is demand is steady even though it’s not increasing. In Sonar, you can see our OTVI or our STVI, either index of volume, our volume index, it’s remaining relatively flat to modest rather than surging. And then when we look at our actual Sonar Tender Volume Index of accepted volume, we can see that that’s remained steady. Acceptance is going up a bit, but I believe that is from new higher contract rates starting to come into play, leading to a little bit less rejections and better compliance for tender acceptance as contract rates have risen and new contracts have been put in place. Some evidence of this is that Knight-Swift’s own CEO called this cycle supply-driven rather than demand-driven. You can see in all of our data, you can see that intermodal, like for J.B. Hunt, their volume rose attributed to rising fuel costs and constrained truck blocking supply, which is pushing people towards rail. So where we are seeing the demand increase is intermodal, but again, I don’t believe that’s from massively increased volumes across overall demand. I think it’s from mode shift as supply has left the truckload market, forcing some of that volume onto the rails. The 4th pillar is shippers are moving towards asset-based and dedicated capacity. Um, this one leans more into earnings commentary than sonar data, but I think that it absolutely makes sense in our current regulatory environment with liability concerns. Uh, when we think about JB Hunt’s earnings, they mentioned their dedicated pipeline was at record levels. Um, they pointed to a tight driver market, regulatory pressures, customer demand for reliable capacity. So makes perfect sense. Werner, their CEO Derek Leathers said on their call that organic dedicated business is growing Not just with their first fleet acquisition driving margin improvement, but as a whole. So plenty of evidence there. And then the fifth pillar is driver recruiting is harder, compounded by the regulatory environment. Again, I’m going to lean more on earnings and what we’re hearing from all of those industry experts who we are talking to every day on this show. But Knight-Swift in their call again said spoke to the same CDL revocation and noncompliance plants, school shutdowns, commentary, um, the regulatory environment is shrinking the eligible driver pool. JB Hunt has spoken to the driver market tightening, leading to increased sign-on bonuses and targeted wage increases. They even flagged that as a potential margin pressure point going forward. We’ve heard it from a lot of our guests that recruiting has become harder. Drivers have more options in a healthy freight market and can chase higher pay. We’re seeing some wage improvement for drivers As some have announced driver pay increases. So really every one of these 5 pillars showed up almost verbatim in Q2 earnings calls from the biggest public carriers in the space. They’re describing their own market in the same terms that we’ve been using all year as we’ve been talking about the market. And again, also supported by Sonar data.

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C.H. Robinson: Nuclear Verdict’s Existential Threat to Brokers

FreightWaves Staff — Mon, 03 Aug 2026 04:10:29 +0000

SummaryView Transcript

The C.H. Robinson earnings call was overshadowed by the massive $600M nuclear verdict. FreightWaves’ John Kingston and Max Fuller dive into the lawsuit’s implications, from rising insurance costs to the redefinition of independent contractor status. Is this an existential threat to the brokerage business model as we know it?

C.H. Robinson’s CEO Dave Bozeman addressed the Dallas County nuclear verdict directly on the company’s earnings call — defying expectations from some analysts that lawyers would keep him silent — confirming the broker will appeal and warning that the process “could take years.” The stock has fallen roughly 20% over the past five days, and Citibank characterized the $600 million award as an existential threat to brokers and their business model.

The verdict has not yet been formally affirmed by the presiding judge, and C.H. Robinson is waiting on that step before launching its appeal. Bozeman disclosed that settlement talks did occur but were rejected on the recommendation of the company’s insurers. FreightWaves Senior Editor John Kingston noted that rating agencies are a secondary concern: “I’ve been sort of checking every day… to see if Moody’s and/or S&P Global puts them on some credit watch,” he said, adding that a $600 million charge would need to be accounted for on the balance sheet if the verdict is affirmed.

Kingston pointed to Wabash National’s experience as a precedent. That company faced a St. Louis verdict exceeding $400 million, took a charge, and ultimately settled for still over $100 million. He also noted the Texas Supreme Court previously knocked a large Werner judgment down to zero, a fact C.H. Robinson’s legal team is almost certainly tracking.

“This was not some fly-by-night carrier. They had a satisfactory rating before the accident. Even after the accident, they had a satisfactory rating,” Kingston said. “The jury found that the driver was effectively an employee of C.H. Robinson. And their argument is, we’ve never employed a driver in our life.”

Those two findings — that a vetted, satisfactory-rated carrier was still grounds for broker liability, and that the driver could be deemed a C.H. Robinson employee despite receiving a W-2 from carrier Lupus Superior — may carry more long-term weight than the dollar figure itself, Kingston argued. The Transportation Intermediaries Association has already filed a formal rulemaking request with FMCSA seeking clarity on what constitutes appropriate broker behavior in carrier vetting. C.H. Robinson’s position is that it hired a carrier with approximately 200 power units and a satisfactory safety rating, leaving open the question of what more a broker could reasonably be expected to do.

The independent contractor classification issue extends the case’s potential reach well beyond brokerage. If Texas courts uphold the finding that a W-2 employee of a carrier can simultaneously be deemed an employee of the hiring broker, the implications could touch Amazon, FedEx, and any company relying on third-party trucking relationships, according to discussion on the broadcast. One panelist said he could not imagine the verdict surviving appeal, but noted that plaintiff attorneys will be drawn by the $600 million figure regardless.

Beyond the Robinson litigation, Kingston flagged consistent themes across the broader earnings cycle: insurance costs are expected to rise across the board, shippers will increasingly seek out high-quality carrier capacity, and multiple executives — including Covenant Logistics’ David Parker — described the current structural market shift as unlike anything in their careers. On a lighter note, Kingston highlighted TFI International’s strong truckload results, driven by its specialty flatbed segment built around the former Daseke unit, with CEO Alain Bedard eager to spotlight that business as LTL operations tied to the former UPS Freight network continue to lag.

C.H. Robinson faces a $600 million unaffirmed Texas verdict it plans to appeal, with CEO Dave Bozeman warning the process could take years and settlement talks already rejected on insurer advice.
Beyond the dollar figure, the jury’s findings that a satisfactory-rated carrier still triggered broker liability and that the driver was effectively a C.H. Robinson employee pose broad structural risks for the brokerage model.
Insurance costs are rising industry-wide in the wake of nuclear verdicts, and the Transportation Intermediaries Association has filed a formal FMCSA rulemaking request to clarify broker vetting standards.

Speaker 1 [0:00] Welcome back to FreightWaves Today. John Kingston, all I gotta say is the word oil and you just show up in my monitor. How are you, sir?

Speaker 2 [0:06] You’re my boss. I show up no matter what word you say.

Speaker 1 [0:09] There is some truth there, but I also have magic words. John, you’ve been covering the earnings of all of these different players in logistics. Well, I wanna talk CH ’cause it’s— everyone’s been watching CH for obviously, you know, it’s been the most targeted, we’ll say, in terms of lawsuits. A lot of noise around the stock with the Supreme Court decision, as well as the lawsuit in Texas.

Speaker 3 [0:37] The—

Speaker 1 [0:39] what is the name of that?

Speaker 4 [0:40] Lupus. Thank you.

Speaker 1 [0:41] Lupus Superior. John, tell us about what you’re hearing.

Speaker 2 [0:45] Well, so the earnings call was interesting. First of all, I predicted on X, on Twitter last week, that Dave Bozeman, the CEO, would not be allowed to talk about it because the lawyers would tell him not to. I was totally 100% wrong on that, and he talked about the case quite a bit. The call was interesting because it started out— C.H. Rommerson is just laser-focused on this message about lean AI and all the impact it is having, which there is no doubt about it. Once again, their headcount was down, revenue and profits are up. Obviously, you can see where the impact of AI is in terms of per-employee performance. But I mean, I have to laugh because these are the same analysts who have heard the same message over and over again. I do not know. They are not— CH Ramas’ job is not to write news for me. Anyway, so it started by talking about that. The performance was solid. The financial performance was solid. But then, yes, they did get into the case, the Dallas County case. In it, they repeated that they are going to appeal. Remember, and they reiterated a couple of times that it’s been a week now, and the judge down there has not yet affirmed the verdict. So they’re waiting on that. If she does affirm the verdict, they will appeal. You know, at one point, Dave Bozeman said he expects that this process could take years. There were settlement talks. He would not go into what they were, but they rejected it basically on on the recommendation of their insurers. They rejected that. And you know what, you heard this on several calls, not just C.H. Robinson, but you heard that insurance costs are inevitably going to go up, number one, and everybody will be looking for high-quality capacity. So that is the message that really has come through in the wake of not just Montgomery, because this was the first earnings cycle since Montgomery came down, but also since the nuclear verdict. So there was quite a bit there. The other message that came, I know you said David Parker is going to be on. Their earnings call was yesterday. Our story on it is going to go out as soon as this is over. He just got on, and most of that call was handled by James Grant, who’s the CFO. But when Mr. Parker spoke, he just said, this is unique in my long history, the structural change in the market. Several people on several other calls said, The driver— I guess I was about to say driver shortage. You know, the market for drivers, the market for drivers is definitely tight, no doubt about it. They all had praise for the DOT and actions that the Trump administration has taken. So that was a kind of a, you know, consistent message through the calls that I’ve done.

Speaker 1 [3:26] John, it’s @JohnKingston if you want to send your hate mail about the driver shortage comments, not @FreightAlley, just in case the drivers have strong opinions about that. So John, by the way, Tripp Grant, James Grant, I think is the official name. I went to school with the kid. Zach Strickland, Tripp and I all were in the same class here in Chattanooga at McCauley. So we all went to school. It’s cool to see 2 of the non-truckers. I grew up in it. I didn’t have a choice but to be in this industry. But both Zach and Tripp are in this industry. When we hear about, we think about C.H. Robinson, did we learn anything new? I mean, obviously they’re talking about appeal.

Speaker 3 [4:06] It wasn’t a shock.

Speaker 1 [4:09] They’re talking about, you know, AI. You talked about how persistent this is. Wall Street sold off. We’re down 20% in the last 5 days. But what did we learn on that call, John?

Speaker 2 [4:21] I don’t know that you learned much. There really wasn’t much that they said that they hadn’t said in their statements after the verdict. I will say I’ve been sort of checking every day, and then my guess is this would not come until the judgment was affirmed, to see if Moody’s or Moody’s and/or S&P Global puts them on some credit watch. Because right now, they are going to essentially— if it is affirmed, they have got a $600 million charge that they have got to account for somewhere. Jason Seidel of TD Cowen mentioned that too in his post-earnings call report, that there very well may be a charge taken. Wabash National took a charge. They had that gigantic St. Louis verdict. over $400 million. They eventually— and they did take a charge. I don’t know if they took the full $400 million. And then they knocked that down on settlement. But that settlement was still over $100 million. They had to take a charge on that too. At a certain point, this does become real money. I think that now it just seems so far from when they’re going to have to write a check. You had a verdict last week, still hasn’t been affirmed. You start the appeals process. So, uh, you wonder how much that’s going to impact their bottom line. But someday, unless the whole thing is tossed out, uh, there will be a charge. Let’s remember, this is Texas. The Texas Supreme Court eventually got a hold of that big Werner judgment a couple of years ago and knocked that down to zero. So, uh, I can’t imagine that the C.H. Robinson lawyers aren’t looking at that.

Speaker 1 [5:48] Look, I, I think every defense attorney in the country and every compliance officer is thinking, God blessed Texas Supreme Court, hoping that this thing gets disputed. If you’re running a broker, you got to do it. I got to ask you, when you guys were public, when you were running a public company—

Speaker 3 [6:05] Right.

Speaker 1 [6:05] You have a big, massive lawsuit risk that’s there. Wall Street— I think maybe because these cases are so big, and the lawsuit is so big, that C.H. Robinson doesn’t have a choice but to talk about it. How did you guys handle that in terms of discussing Wall Street? Because you have the The plaintiff’s attorneys are— everything you can will be used against you.

Speaker 3 [6:28] You had to watch anything that you said because like you said, it would be used against you. It’s hard to defend yourself in the public eyes when the other attorneys are trying to find something that you said, one word that you might have said wrong, and they would use that one word to build a whole case around. The judges today are letting a lot of these people run.

Speaker 1 [6:53] You’re talking about plaintiffs?

Speaker 3 [6:55] Plaintiffs. But the judges are letting them run to find anything wrong. It doesn’t have to be anything that really affected the accident, but they’re letting them find something that’s wrong in maybe hiring or something that the company’s done or anything. to create a judgment against them. And it’s really sad. This industry is going to change and change a lot if tort reform doesn’t happen. And it’s got to happen pretty fast because if you look at almost every major trucking company out there, they’re dealing with this type of stuff, whether it’s higher insurance costs or whether it’s their own balance sheet being in jeopardy.

Speaker 1 [7:37] I think Citibank Citibank’s quote was that this lawsuit, the C.H. Robinson lawsuit, the award, that nuclear verdict is an existential threat to brokers and the business model, John.

Speaker 2 [7:54] 2 things. Everybody tends to get focused on the dollar number, understandably, but there are 2 other things in here that are probably even more scary for brokers. Number one, this was not some fly-by-night carrier. They had a satisfactory rating before the accident. Even after the accident, they had a satisfactory rating. The other thing is that the jury found, and this gets into the whole sort of independent contractor law, that the driver was effectively an employee of C.H. Robinson. And their argument is, we’ve never employed a driver in our life. And so this is not just a— the issues here are not just a lot of money. Those are two— those issues have legs. And so you kind of got to watch that too. in any kind of resolution. Let’s remember something, that a few weeks ago, the Transportation Intermediaries Association, the TIA, which is the brokerage trade group, put out, I guess, a formal request for a rulemaking from FMCSA on what constitutes appropriate behavior on the part of brokers. I mean, the C.H. Robinson point of view would be, we hired a guy who’s solid. I think he had 200 power units. And he had a satisfactory rating, and now we’re getting stuck with a $600 million verdict. What else were we supposed to do?

Speaker 1 [9:10] But I think it goes down, John, this idea that Matt Loeffler and I are going to get into this later today on Freight Expectations. And Matt is an attorney, transportation attorney, particularly transportation law, loves these Supreme Court decisions, these decisions that ultimately is going to get appealed. The whole thing, as far as he can tell is the definition of an employee. And in this particular decision, the jury decided for whatever reason that the driver that died— he passed away— was an employee of Sage Robinson. That seems like— and we’re going to get into this later today— but it seems like everything rides on that one issue. And if somehow that gets held up in the court system, if the courts and all the way to the Supreme Court— I imagine this would go all the way to the federal Supreme Court if this this plays out, which is why we’re talking many years. If somehow Texas upholds it, this puts all of the independent contractor services, including Amazon, FedEx, all of these different companies, puts the entire business at risk, John.

Speaker 2 [10:15] But let’s remember something, though, about this driver. He was a W-2 employee of Lupus Superior. So I think it’d be a little more complicated. if he was an independent owner-operator that got hired by Lupus Superior. And then maybe, you know, the whole question of independent contractor status, et cetera, might get a little more cloudy. But this guy got a paycheck from Lupus Superior. So that establishes that he’s an employee. He got a W-2 every year from Lupus Superior. How can you be an employee of somebody else when that’s happening?

Speaker 1 [10:49] I mean, this is in Texas. I can’t imagine, I mean, like my perspective, and again, I wanna get into it, Matt Leffler, we’re gonna get into it deeper. Stay tuned for that. I can’t imagine this holds up on appeal. Like, I think it’s going to get thrown out on appeal.

Speaker 4 [11:03] Yeah, but is the damage already done in their stock price?

Speaker 1 [11:05] Well, look, plaintiff’s attorneys read this, $600 million, it’s just going to attract them that much more. They’re like vultures. They smell it. They attack it. They want it. They taste it.

Speaker 4 [11:17] So, John, I could talk about this.

Speaker 1 [11:20] We have a lot to talk about, Ernie.

Speaker 4 [11:22] Yeah, I was going to say, last final question because we’re out of time. You know, Heartland, Werner, Schneider, lots of other earnings. Anything stand out in any of those to you?

Speaker 2 [11:30] Well, I didn’t do Heartland or Schneider. My colleague Todd Maiden did that. I did Werner. I guess the thing that stood out is like it was good. I probably, after all the talk of higher rates, I may have expected better. I thought one of the more interesting was TFI International. You know, we tend to think of them primarily as an LTL carrier. And the fact is more of their revenue comes from LTL primarily. A lot of it the old UPS Freight arm. Um, their, their truckload did really well, and a lot of what did really well is what they call the specialty group. And the core of that is the old Desky, uh, flatbed unit that they bought. They’re doing really well on that, a lot of AI-related work. Uh, so, you know, normally— I mean, I’ve been doing these calls for TFY for quite a while— the talk tends to focus in on their LTL operations because the ones in the US, the former UPS operations have been struggling. But this call was interesting because there was a lot more talk about truckload, and clearly Alain Bardard wanted to talk about that. And anytime he talks, it’s really entertaining.

Speaker 1 [12:32] Yeah, it’s interesting because people have asked, how do you get exposure to flatbed? There is— Daseke was the only pure-play flatbed public company. It is now part of TFI. And look, if I were If I were running the business, if I were running TFI, we’re talking about a flatbed all the time.

Speaker 4 [12:51] Oh gosh, especially in this market.

Speaker 1 [12:52] So much sexier.

Speaker 3 [12:52] That’s a big word.

Speaker 1 [12:53] The industrial economy is back. John Cason, we’ll have you back next week to talk more oil, energy, and earnings. This rock and roll continues on.

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Nuclear Verdicts: $86M awarded despite NO negligence? [Trucking Crisis]

FreightWaves Staff — Mon, 03 Aug 2026 04:10:05 +0000

SummaryView Transcript

Trucking leaders David Parker (Covenant Logistics) and Max Fuller (U.S. Xpress) unpack the state of the freight market, from the driver shortage to nuclear verdicts. Discover why market stability and tort reform are crucial for carrier survival and what’s driving the “supercycle” in this candid discussion.

A Utah jury awarded an $86 million nuclear verdict against QXO — formerly Beacon Roofing — despite finding the carrier was not negligent, a ruling that Covenant Logistics Group founder and CEO David Parker cited as emblematic of an existential legal threat facing motor carriers and brokers. Parker, speaking on FreightWaves Today alongside stepbrother Max Fuller, co-founder of U.S. Xpress, said the litigation environment has made tort reform the industry’s most urgent political priority.

Parker said Covenant’s insurance costs have surged roughly 300% over the past three to four years while total coverage dropped by 50%. “300% cost for 50% of total coverage,” he said. “I don’t know what kind of insurance any of us got. I mean, it’s like I’m naked on this quarter.” His current policy does not expire until next April, but he said the exposure grows larger with every rate cycle.

“I heard Max say earlier that if we don’t get tort reform, it’s not going to matter. And it’s true. It’s not going to matter.”

Parker said he has traveled to Washington six or seven times since October to push for federal tort reform and has met twice with former President Donald Trump, as well as with the House Judiciary Committee and Rep. Jim Jordan roughly two months ago. He put the current odds of passing meaningful reform at 20%, up from what he described as zero probability for most of his career, attributing the shift largely to Trump’s personal familiarity with litigation. ATA President Chris Spear is leading the industry’s lobbying effort, Parker noted.

On the freight cycle, Parker said DOT enforcement activity — which he dated to October, following a high-profile August accident in Florida — has removed an estimated 2% to 3% of capacity from the market. He placed the cycle at “first base,” describing the ball as having been hit last October, and endorsed the term “supercycle.” Parker said load-to-truck ratios in Covenant’s expedited and brokerage divisions fell from roughly 3-to-1 before July to about 1.5-to-1 during the month, but projected that the following week’s revenue would likely be the company’s highest of the year.

Parker said Covenant has deliberately exited the over-the-road segment — retaining only about 100 OTR trucks — and restructured around four units: expedited, dedicated, freight management, and warehousing. That pivot, which he formalized with his board in 2015, followed two near-insolvencies across his 40 years in business, including a period in 2008 when the stock traded as low as 78 cents per share. The company now carries a market cap approaching $1 billion. He said the strategic shift was triggered in part by a contract with Delta Air Lines, which Covenant has served for 11 years hauling aircraft engines, tires, and brakes, and for which it now also operates a warehouse.

Covenant’s team-truck fleet, once as large as 1,700 to 1,800 units, currently stands at approximately 750 teams, with Parker saying he needs 20 to 30 more to fill open trucks. He said team trucks must generate about $10,000 per week to justify the capital investment, given that Freightliner and Peterbilt prices rise $8,000 to $12,000 with each new model cycle and teams require truck trades roughly every 18 months. The company’s brokerage book runs roughly 70% contracted and 30% spot, a mix Parker said has been painful as carrier rates outpaced contracted pricing. Fuller added that an operating ratio below 92 is essentially breakeven once interest, taxes, and working capital are factored in — a threshold the industry rarely clears.

A Utah jury awarded an $86 million verdict against QXO despite finding the carrier not negligent, illustrating the unpredictable legal exposure facing carriers and brokers.
Covenant CEO David Parker reports insurance costs up 300% while total coverage has fallen 50%, and puts the odds of federal tort reform passing at 20%.
Parker describes the freight supercycle as being at ‘first base,’ with DOT enforcement having removed an estimated 2%–3% of capacity since October.

Speaker 1 [0:00] We have a real treat. We have David Parker, the founder and CEO of Covenant Logistics. David, I have a I have a habit of saying Covenant Transport, so I gotta get.

Speaker 2 [0:08] I do. I do too.

Speaker 1 [0:08] Old habits. Did you have you done this to any of your your ever investor calls?

Speaker 3 [0:13] Yes, I have.

Speaker 1 [0:14] So you guys just had your conference call. Congratulations. I understand this is the biggest revenue in your history.

Speaker 2 [0:20] Yes.

Speaker 1 [0:20] Yeah. So what do you? I mean, obviously the market’s helping them out. What do you attribute that to?

Speaker 2 [0:24] I tell you, at the end of the day, it’s what we started eleven years ago and. Refocusing the company and getting into the various segments. You know, we’re not into the OTR segment, very little. I mean, we may have 100 trucks running in the OTR segment, and we have really focused on the 4 areas that we’re involved in, which is expedited, dedicated, freight management, and warehousing. And we’ve been going down that path for a while.

Speaker 1 [0:52] So that’s a— I mean, obviously over the last, you know, 14 years, you’ve talked about just the transition of the company. It is a very different operator.

Speaker 4 [1:01] Yeah.

Speaker 1 [1:01] If you followed it historically, it’s a very different operator than historically has been. But there is something special about the way you guys have repositioned the business. What, what part of the business are you most proud of in terms of the progress that you’re making right now?

Speaker 2 [1:12] Well, I tell you, number one, I’m proud of all 4 of ’em. If I leave one out, I’ll get in trouble.

Speaker 4 [1:17] Love all your kids equally.

Speaker 3 [1:19] That’s right.

Speaker 2 [1:20] I love all my children.

Speaker 1 [1:21] Everyone, which I have 5 kids, it depends on the moment.

Speaker 2 [1:23] I love ’em all.

Speaker 3 [1:24] Be honest.

Speaker 2 [1:24] I love ’em all equally. But, All of them have made some great headway. I look at our Legacy Dedicated that we had them all down yesterday for meetings and they have just done a great job. I mean, they have turned that thing around so well. I’m proud of them. There’s no doubt that the freight management, which is brokerage as well as a small management of freight, It has been, it’s been tough. We went from doing great until you couldn’t find capacity, and then our margins have squeezed. And, and, and so we continue to, we continue to focus on that to make sure that we can either raise rates or find carriers that do it cheaper. And I got a feeling raising rates is easier.

Speaker 1 [2:13] Yeah, well, look, misery loves company because every public truckload carrier that we’ve covered Has had the one part of their business has struggled, and you can go through the list. I, in fact, I don’t think we’ve covered asset-based carrier that’s done well in brokers. No, revenue is doing well despite all the noise. RXO, we’re going to hear from next week. I would suspect that they’re doing well, but it seems that the asset side of the business, these logistics operations, are there to serve the truck. Julie and I’ve talked about that. Usually it’s a the truck is going to win out in terms of how you guys think about the business.

Speaker 2 [2:48] You know, and that’s interesting because that is one spin. Ours really isn’t. Uh, our assets— keep in mind, we do no OTR, so we’re very focused. So our, our asset side only handles about 0.5%—

Speaker 1 [3:02] Wow.

Speaker 2 [3:02] —of the broker freight.

Speaker 1 [3:04] And, you know, why do you think it’s— why do you think it’s underperforming versus some of the other businesses?

Speaker 2 [3:08] Uh, strictly because, uh, capacity rates Got it. Have gone up faster than we’ve been able to raise.

Speaker 1 [3:15] So you have contracted business that longs towards the side of it.

Speaker 2 [3:17] It’s about, it’s about 70/30.

Speaker 1 [3:19] The spread of it’s hard.

Speaker 2 [3:20] It’s hard.

Speaker 1 [3:20] In this kind of environment.

Speaker 2 [3:21] It’s harder. Now eventually it’s gonna catch up.

Speaker 1 [3:24] Well, I mean, we’re still early cycle. I mean, every, Julie and I were talking earlier on this call, every CEO’s talked to, I think they’ve all, they all use the same words.

Speaker 4 [3:32] Yeah. They read each other.

Speaker 1 [3:32] Yeah. We’re in the early innings. Do you agree with that?

Speaker 2 [3:34] Yes, I do.

Speaker 1 [3:35] Derek says that we’re in the 3rd inning. Where would you describe it?

Speaker 2 [3:37] Yes, I, I, I, I believe that we’ve reached 1st base. I use baseball analogies. So we hit the ball.

Speaker 1 [3:41] We still, we’re still We’re still in the innings, okay.

Speaker 2 [3:44] That’s right. We hit the ball last October. It’s when the DOT really started focusing because of the August accident that happened in Florida that we’re all well aware of. DOT took over in October, and to me, that was hitting the ball, and I believe we’re at first base. I think that we’ve got a long runway.

Speaker 1 [4:03] You think it’s a long, big stadium?

Speaker 2 [4:06] You know, I don’t know if— it may have been you all, to be honest with you, but Whoever invented the term supercycle, I believe it. I believe that’s where we’re at.

Speaker 1 [4:17] Yeah, I think FreightWaves was one of the first to actually describe—

Speaker 2 [4:19] I agree with that.

Speaker 1 [4:20] —that world has set in. Because that’s exactly— I mean, there have been— people have used that term in the past. I think we described it simply because you have the setup that’s very unusual. I mean, the reality is that the driver constraint has always been the capacity constraint. It’s interesting, you go back over the decades, everyone talks about the number of truck counts. And I remember as a kid, and I’d listen to the conversations my dad would have about trucking, and a lot of it was how many trucks got produced, because you couldn’t count the drivers.

Speaker 2 [4:46] Yeah, that’s right.

Speaker 1 [4:47] Now, over the last decade, a lot of the capacity constraints have been truck drivers. But the issue has been this massive immigration that has been unrestricted, and the regulatory environment has allowed for— has eliminated all the barriers to entry, has meant that we didn’t have a normal cycle. That’s all gone away.

Speaker 2 [5:08] It’s all gone.

Speaker 1 [5:08] We talked about just the demographics and how old the— The fact that it is harder to recruit fully vetted, fully registered truck drivers today has made it more challenging.

Speaker 2 [5:22] Yes. And it’s interesting, who would ever remember the days that we’re saying now, boy, I’m glad— I’m having a hard time finding professional drivers. I’m having a hard time getting drivers in the seat. But let me tell you, after the last 4 years, I will take that any day. Let that be my problem.

Speaker 1 [5:38] Pricing power, right? Pricing power. That gives you pricing power. Pricing power.

Speaker 2 [5:41] And it’s not abusive pricing power. It’s given me pricing power to be able to cover my costs.

Speaker 1 [5:47] So I’m going to ask you a question.

Speaker 3 [5:48] Is there a truck driver shortage?

Speaker 2 [5:50] You know, my son-in-law and I argue about this all the time. You know, he has his own recruiting company. I say no. He says yes. Only thing I know is I need drivers.

Speaker 1 [6:01] Okay. Well, there you go.

Speaker 2 [6:02] Yeah. That’s all I know. I need some drivers.

Speaker 1 [6:04] I think the pivot has moved from driver shortage to qualified driver shortage. The drivers themselves By the way, you need to send your messages to your son-in-law, Rob. Yes. That they— for those drivers that are upset about the term driver shortage. But I think even the drivers would agree that there is a qualified problem, a shortage of qualified drivers.

Speaker 2 [6:26] Yeah. Yeah. Yeah. We need more of them.

Speaker 1 [6:28] Julie, when we think about this market and think about just what Covenant is known for, you were at U.S. Express, 2 of the largest team operations. How, when you were reading the earnings, what was your perception in terms of Covenant’s performance?

Speaker 4 [6:44] So, I mean, I think certainly, you know, you can break it out by revenue per tractor per week looked excellent based on my experience. I assume inflated based on the amount of expedited freight and team freight you’re doing. But I also noticed the theme that we’re hearing from everyone else as well, that we’re really working on increased utilization, increased profit. not any interest in growing fleets necessarily right now, more in likely shrinking the asset footprint. So that was sort of the theme that I noticed that I had read, not just in the Covenant earnings, but really kind of across the board a lot.

Speaker 1 [7:20] Is it different, right?

Speaker 2 [7:21] Yes, it is. It’s interesting. You know, we took out 150 teams, trucks out of the expedited side in the first quarter. Now, some of that bit us, in the second quarter because there’s a lot of tail on insurance claims and some other costs that happened in December and January that you don’t have enough revenue to be able to support it.

Speaker 3 [7:45] Right.

Speaker 2 [7:45] And all of a sudden your fixed costs are, are not helping you as much as you would like for them to. Uh, but yeah, we took off. But I’m gonna tell you, in my, my meetings yesterday, guys, there is— because I know that we all sensed in the month of July A little pause, whatever you want to call that.

Speaker 1 [8:01] We talked about it.

Speaker 3 [8:02] It happens every year, though. Every year. Every year.

Speaker 1 [8:04] But do you think it’s— did you feel— because we’ve been talking about this pause, this slowdown. Do you feel like this is a normal season calendar thing or do you think it’s unusual?

Speaker 2 [8:13] No, it’s A, normal. But B, I will tell you that let’s say prior to the month of July, we had 3 loads for every truck. Let’s just say that in whatever division, brokerage or expedited, 3 loads for every truck. In the month of July, it’s not that it became negative, it was 1.5. So we went from 3 to 1.5, and we’re thinking we’re in a depression, and I’m loading all my trucks.

Speaker 4 [8:42] Everyone’s worried about the cycle. I mean, everyone’s worried about overcorrection.

Speaker 1 [8:44] We’re at 14.5% rejections, which a year ago we would’ve killed for.

Speaker 3 [8:49] Absolutely.

Speaker 1 [8:49] And I think it’s hard, you know, we, we’re just waiting. Everybody’s waiting for the cycle.

Speaker 2 [8:53] And I will tell you this though, exciting on, on from my standpoint that I’m hoping is showing something, because I really expect that August will start going back the other way. I really do. And I saw numbers today for projected next week’s revenue that will probably be our highest of the year.

Speaker 1 [9:13] Congratulations.

Speaker 2 [9:14] I hope that comes through. Now, that’s just projections. So, you know, we all throw projections.

Speaker 3 [9:19] If it’s a normal cycle, by mid to late August, You’re going to see record numbers.

Speaker 1 [9:24] Well, we are in late— I mean, it seems like early August. Yeah, I mean, you’re right, it keeps growing. It keeps growing. I mean, my, my memory’s a blur. I’m not sleeping these days. I’m doing other stuff. David, you guys had one of the largest, if not the largest, team operations in, in the entire industry. How many teams are you currently running?

Speaker 2 [9:45] We have about 750 that are in that fleet. And I would say we need, we probably need 20 or 30 more right there because of open trucks. So somewhere, somewhere in that neighborhood.

Speaker 1 [9:58] I mean, at peak, how many teams?

Speaker 2 [10:00] Oh, we were at 1,700, 1,800.

Speaker 1 [10:02] And what were you guys running at peak, Dad?

Speaker 3 [10:04] Well, when we started U.S. Xpress, you know, like 20 or 30-some-odd years ago, we were almost 80%.

Speaker 1 [10:11] But what was the number of team count? What did you guys ever peak at? 2,000? 1,500?

Speaker 3 [10:16] Well, probably somewhere around 2,200, 2,300.

Speaker 1 [10:19] Gotcha. ‘Cause you guys were, it was Covenant, US Xpress, CRST.

Speaker 2 [10:23] That’s right.

Speaker 1 [10:23] And that was probably—

Speaker 2 [10:25] It was the 3.

Speaker 1 [10:25] It was the 3 of you guys that dominated. What happened to the team business over the decades?

Speaker 3 [10:29] If you go back and look at the history, my dad was one of the first people to really get into that long-haul market from Southern California points east. So when David started Covenant, he started real heavy with teams. When I started US Xpress, I was real heavy with teams.

Speaker 1 [10:44] Clyde was definitely—

Speaker 3 [10:45] And to a certain extent, we were bootstrapping that whole market.

Speaker 1 [10:49] Yeah.

Speaker 3 [10:49] Because we had teams and hardly anybody else did.

Speaker 2 [10:52] Yeah. I think to answer your question also though, I think what’s happened over the years, and then we’ve also led an effort in that to right-size from a standpoint that I think the Amazon effect, warehouses got closer, you wanted it next day, et cetera. So that took down the team, side somewhat. But at the end of the day, it comes this. To get the ROI on a team operation, you’ve got to be somewhere in the mid-80s ORs. 85, 86, maybe 87. If you want to get a good ROI, and that’s what we started on and says customers, and my customers know I love them to pieces. I don’t make a dollar without my customers. So thank them for the ones, but we’ve actually gone to our customers and we say, listen, if you do not need these teams and do not want to pay me for these teams, I will get rid of them. And the market answered back in 2020 when the world came to an end. And we went from 1,200 teams down to about where we’re at currently. And we’re continuously asking that question, are you willing to pay? Because these teams, guys, let me tell you. Yeah. Every 18 months. Okay, how much is Freightliner or Peterbilt wanting for a truck? Oh, another eight or ten or twelve thousand more dollars. Think about how often I’m having to trade these trucks, and if you don’t get the ROI, I can put them in my chicken business. I can put them in my dedicated business and run these trucks five years.

Speaker 1 [12:34] So many. So the headaches—it’s interesting. We need to get a segment with David called Hug a Customer because we have a hug a hug a I love them. Web Estes. Sent us a pallet. He was the inaugural chauffeur.

Speaker 4 [12:48] We could do a segment just on the chicken business.

Speaker 1 [12:49] That’s right.

Speaker 3 [12:50] Honestly.

Speaker 1 [12:50] We’ll get into the chicken business in a while. We know Clyde and Max aren’t eating chicken. Didn’t— Clyde didn’t. You know, it’s interesting because you talk about the challenges of you’re running these things, you’re high utilization. But the idea with teams is you do get a lot of miles. What you’re saying is a little different. It’s the CapEx side that is— you have to constantly replace them.

Speaker 2 [13:08] That’s right. We’ve got to get the revenue. I mean, these guys, these trucks need to be generating about $10,000 a week. On these trucks, not $8,500 a week.

Speaker 1 [13:17] So I’ve known you guys both for years.

Speaker 4 [13:19] And the drivers work so hard.

Speaker 2 [13:20] They work so hard. It’s a hard job.

Speaker 3 [13:22] Well, and you’re also talking about, you know, you said first quarter was kind of down on teams. Well, that’s every year. So it cycles in and out.

Speaker 2 [13:29] In and out.

Speaker 3 [13:29] So you have to adjust, constantly adjust up and down.

Speaker 2 [13:32] That’s right.

Speaker 3 [13:33] In order to keep that count at the right count.

Speaker 1 [13:35] So I’m going to ask both of you guys, by the way, they are stepbrothers. Clyde Fuller, Frank Caviar did a Fantastic.

Speaker 2 [13:43] It was good.

Speaker 1 [13:44] A fantastic cover on Freight Alley. The credit— this is a Countrywide. There’s Clyde. He’s the bigger than life character, sort of like Boss Hogg is how I describe him. Big old cigars, bigger than life and bigger than reality. But he had these old cabovers that, in my opinion, went hard. Both of you guys growing up, I’ve known you both my whole life. There was this rivalry in Chattanooga of building 2 big companies, 2 big trucking companies, a family The team dynamic plays into it, but the truck count was also a piece of that. Who had the most teams? Who had the most trucks? David, you’ve talked about this change in direction, the fact that you guys have become disciplined. When did you decide that the number of trucks just did not matter?

Speaker 2 [14:29] Yeah, when my profits told me that. You know, I mean, first of all, in 40 years of being in business, I’ve been broke 2 times and just didn’t shut the doors. And every company probably at one time or another has been broke and just didn’t shut the doors. And so you’re continuously looking about how do I revamp the company and how do I make sure that we’re on the— we’re going to be longevity and that you’re going to continue going. And so it was all along those kind of lines that made us make all those kind of decisions that says, here’s who we need to be when we grow up. And so in 2015, when I made that decision, went to the board, and what I told the board that day was this. I’m so tired of the ups and downs of my earnings. Up— let me tell you one good thing about a team operation. When it’s running like a third shift manufacturing, you’re printing money.

Speaker 3 [15:19] Mm-hmm.

Speaker 2 [15:20] But let me tell you, let the weather in January, let the GDP go to 1 instead of 2.5, and you don’t have the freight, you are not making those widgets 3 shifts. And all of a sudden, that cost Took too many people on payroll, too many people, too many mechanics to fix my trucks. The cost just kills you.

Speaker 3 [15:40] It does.

Speaker 2 [15:40] And your margin, you can literally go from 83 ORs to 97 ORs in a week.

Speaker 1 [15:47] Well, Wall Street is awarding you. This is in 2008, your stock was as low as 78 cents a share.

Speaker 3 [15:54] Yeah.

Speaker 1 [15:54] There was a belief, this is 2008, high liquidity price.

Speaker 3 [15:58] Absolutely, we were gone.

Speaker 1 [15:58] You guys might file bankruptcy at some point.

Speaker 3 [15:59] Yeah.

Speaker 1 [16:00] You were on bankruptcy watch.

Speaker 3 [16:01] Yeah, that’s right.

Speaker 1 [16:02] You’ve now got nearly a billion-dollar market cap. Your stock has been— I mean, it’s right up to the right. We’re up and to the right. Wall Street is rewarding you, but you’re a smaller— I mean, revenue’s there, but in terms of total truck count, you’re smaller. When you decided to go on this journey, how painful was it to think, am I making the right decision in terms of getting out of the OTR business?

Speaker 2 [16:23] Yeah, it wasn’t. Again, so in 2015, I went to the board and I said, I don’t know what this means, but here’s what we’re going to do. I’m going to get deeper in the supply chain. Have no idea what it means. Thank the Lord Delta Airlines came up there. And Delta, which we’re still with them 11 years later, Delta wanted our teams to haul their engines and their tires out of Atlanta, Georgia that had to be in LaGuardia, had to be in Minneapolis and Chicago, Detroit next day.

Speaker 3 [16:49] Yes.

Speaker 2 [16:50] But they also wanted me to do Chattanooga, Tennessee and Columbia, South Carolina and Auburn, Alabama. Every location for Delta went to. And so when you land in Atlanta and you look over there where they’re working on planes, we got people in there and have for 11 years. Since then, we’re now operating a warehouse for Delta Airlines. And that started it. It was a blessing. I don’t know if Delta sold me or I sold Delta because they were scaring me when they was telling me what they wanted me to do in 2015. David, if my flight’s delayed or it’s a maintenance problem, the first thing I do is, is this, is this, is this plane because of tires or brakes? Okay, that’s where all of its tires and brakes— tires and brakes. Interesting. If it’s tires and brakes, it’s me.

Speaker 1 [17:35] By the way, we need those. We need tires and brakes. We got to have brakes especially. I’ve had my brakes fail on my own airplane as a pilot. Tort reform is a big conversation. Yeah, um, it, you know, we have been covering back to back. Matt Leffler, uh, And I are going to get into torts. So he’s— he is going to talk about this whole legal situation happening for 8. But this all comes down to the fact that no matter where you’re at in this, you are subject to these massive, massive lawsuits. What are you hoping that the government does about tort?

Speaker 2 [18:07] You know, I heard Max say earlier that if we don’t get tort reform, it’s not going to matter. I’m paraphrasing. That’s right. And it’s true. It’s not going to matter. That’s why I believe we have to get it. I am so happy with what DOT, but I’m happy with what ATA. Chris Spears is doing a wonderful— leading this effort. I have probably been to Washington 6 or 7 times since October, and I’m very blessed in one side to have Ben Carson on my board. That allows me to get some meetings when I need some meetings. And we are running with that effort to get tort reform. And I will tell you, we’ve went from forever, forever, all of our careers, 0% chance of getting tort reform. I got it at 20% only because of Donald Trump, only because he knows it’s affected him in court cases. Yeah. Only because he knows how hard it has been. And we’ve been fortunate enough to meet with him 2 times. We’ve been fortunate enough to meet with the Judiciary Committee 2 months ago. We have met with Jim Jordan 2 months ago. We are— we’re going. We’re going. And I think I’m happy at 20% chance.

Speaker 3 [19:34] Well, look, it’s got to happen. It’s got to happen. If it doesn’t happen, we’re not going to have an industry at all. Yes.

Speaker 1 [19:39] You can’t have this.

Speaker 3 [19:41] The losses are coming on so strong and so hard against these carriers and it’s destroying their balance sheets.

Speaker 2 [19:48] Yes, it is.

Speaker 1 [19:49] Well, the risk is, I mean, the insurance numbers are piling up. How much does insurance cost you more? Are you having to deal with insurance changes over the last—

Speaker 2 [19:56] Let me tell you, thank the Lord, a couple of things. Ours does not expire until next April, but in the last 3 or 4 years, we’ve got 50% of insurance And my costs are up about 300%. 300% cost for 50% of total coverage. And guys, I’m going to tell you, I don’t know what kind of insurance any of us got. I mean, it’s like I’m, I’m naked on this quarter. We’re dividing it by 2 on this quarter. As it goes up, the exposure just gets larger and larger.

Speaker 3 [20:31] Well, the problem is that the courts are awarding such Such large awards that the insurance companies have to continue to increase their charges. And the carriers are having to, in order to keep the costs down, are having to take bigger exposures. And I mean, that’s a big problem for this industry. We’ve got a problem with returns anyway. And then you compound it with that. I mean, it’s got to happen.

Speaker 1 [20:58] I got to tell you, Having been around this industry, grown up in a trucking family, have diesel in my blood, the thought of having to deal with this unknown risk of what this means, the pressure, I just— for any operator who’s got risk out there and these existential risks, it just seems like it’s a lot to stomach.

Speaker 2 [21:21] It is. And as Max can relate to, and all of us can relate to, and that is What’s the first thing we wake up of a morning? The first thing we do is get our phone to see if we had any bad accidents, right?

Speaker 4 [21:32] I used to do that every morning.

Speaker 2 [21:33] Every morning. And the first thing is going to be—

Speaker 4 [21:36] I don’t miss that every morning, like checking if I got any alerts or emails overnight of anything.

Speaker 1 [21:40] What do I need to know? I mean, that, that, look, I, I think there’s an argument that some of the unregulated parties that are out there Having more regulation, more risk management is important. There’s definitely— this industry has gotten too loose. But when you’re talking about the fact that we’ve covered multiple stories, there’s the Utah nuclear lawsuit with now QXO, one of Brad Jacobs’ companies, Beacon Roofing.

Speaker 3 [22:11] Yeah.

Speaker 1 [22:12] The jury decided that the driver was not negligent, or the carrier was not negligent. Still, Matt Leffler, we have Matt Leffler. Matt, that whole story was absolutely insane that the jury decided that the carrier wasn’t negligent, but then still awarded an $86 million nuclear judgment against QXO. What, what was that nonsense?

Speaker 3 [22:38] The key to remember in all this is that juries get it wrong, trial courts get it wrong, and that’s why you have an appellate process. Ultimately, these things take years to unpack. There’ll be the same case with C.H. Robinson in Dallas. So even though you might get a verdict like, that doesn’t make any sense, there’s going to be appeals, there’ll be change. But you might not hear that for a year or 2 years down the road. That’s why it’s so dangerous for motor carriers and brokers right now. You just don’t know where the cards are going to land.

Speaker 1 [23:03] You just never know what the risks are. And that’s the issue. I mean, there’s so many cases in terms of just this unknown risk. And a lot of times, it’s just up to the jury emotion. These plaintiffs’ attorneys get all fired up and get people fired up. It’s a big issue. Matt Loeffler and I are going to dive into that. Stay tuned later for Afraid Expectations. Real quick, I want to ask David a couple more questions. Production, just calm down. We don’t need the music just yet. We’ll get there. David, what is it that you’re most excited about right now in this industry?

Speaker 2 [23:34] Where the cycle is, and quote, the supercycle that I think is at the beginning stages. That’s the most exciting thing.

Speaker 1 [23:41] You think this is going on for years? You think it turns over in a year?

Speaker 2 [23:44] No, no, no. Here’s what I believe. I believe what the DOT has done is unbelievable from a standpoint, and you’ve had Derek Barnes here, and that is we don’t care how much money a trucking company makes. We don’t care how much money the customer makes, a shipper, a manufacturer. Here’s what we do care about is that the motoring public knows that the safety is on the interstate when they pass a truck. That’s their whole goal. And they don’t care about What that means, he is driving that process. Doing that, I believe, has taken out somewhere between 2% and 3% of capacity. Keep in mind, 2% moves the market.

Speaker 1 [24:24] Look, John Kingston, our oil reporter who’s been reporting on commodities his whole life, has argued, and he educated us, it is not the percentage that matters, it’s the incremental. As he says, the incremental barrel of oil sets the oil price. Same thing in trucking. You need to— in any market, if you have one more load than you have a truck, People will pay whatever. And that’s why these markets can flip 20%, 30% in a given hour.

Speaker 2 [24:46] Absolutely. So let’s say that they’ve taken out 2% to 3% of capacity. I’m saying we’re at first base.

Speaker 1 [24:53] Because there’s a lot more coming.

Speaker 2 [24:54] I think there’s a lot more.

Speaker 3 [24:55] And you and I are aligned on that totally.

Speaker 1 [24:58] Yeah, a lot more is coming. The regulators, whether we’re talking state government— and look, we’ve had conversation with Derek Farrars. We’ve had conversation with DOT. The fact is that just like the STB, and we had our rail summit earlier this week, we had the benefit of Union Pacific and Norfolk’s CEOs here in Chattanooga, along with the chair of the STB. What they’ve said is one of their roles as the STB is to stabilize the economics of the rail industry, because they will— and they’ve said this is one of their charters— if they don’t stabilize the economics of the railroads, and we all saw what happened in the ’80s.

Speaker 2 [25:32] Yes.

Speaker 1 [25:33] then you’re going to have safety issues. And so having an economic return, given the benefit of companies that operate safely to make investments— and that’s the other problem. When you can’t operate safe, and you’ve got to deal with a lot of the cost increases, inflationary issues, and you haven’t made a profit because of this excess amount of capacity, even though— look, companies like Covenant, companies like US Express—

Speaker 3 [25:58] Yeah.

Speaker 1 [25:59] The companies that we’re covering, they have no choice but to make these safety investments.

Speaker 3 [26:03] You have to.

Speaker 1 [26:03] But it’s that mid-market carrier that oftentimes will sacrifice the investments in training and in equipment. Matt Leffler likes to remind us that 1/5 of all trucks on the road are not roadworthy because they’re just trying to stay in business. And that is not what you want if you’re a safety regulator. Your responsibility is to keep the truck safe on the road, but the companies must make a return. And you’re talking to— we’re bragging about the fact that— I know this is great, and I don’t mean to dismiss it— a 96% OR, I know, pathetic. Like, that is not great. No, in the world of companies. Congratulations, by the way.

Speaker 2 [26:43] But that’s the fact. I know it’s pitiful. Tells you everything you need to know about how— how hard it is to do better.

Speaker 3 [26:48] Well, yes, what people don’t understand about ORs Is you almost have to make at least a 92 just to break even.

Speaker 2 [26:56] That’s right.

Speaker 3 [26:56] Because you’ve got to pay your working capital. Most shippers think when you say 92 that you’re making an 8% profit. That’s not true. You’ve got interest, you’ve got taxes, you’ve got all kinds of things that gets added to it. And it really takes at least a 92 to break even. You know, and this industry doesn’t break even very often.

Speaker 1 [27:13] I would love to track— we should do this at some point. We’ll have you back, David. to track the history of Covenant and US Xpress and other carriers and how many times you guys actually got to 92. Because like the history is—

Speaker 2 [27:26] All 5 times.

Speaker 1 [27:28] You have these businesses that are among the most successful, have all the benefits in the world, and you’re just struggling to have oxygen.

Speaker 2 [27:37] I know.

Speaker 1 [27:38] It is a difficult, brutal, brutal—

Speaker 2 [27:39] But it’s getting better.

Speaker 1 [27:40] It is getting better. I do hope that—

Speaker 4 [27:42] That’s the closer of that. is that the FMCSA, the DOT, we know that they’ve asked for our data. They use it to ensure freight market health, right?

Speaker 1 [27:50] I got a text. I don’t know if Derek wants me to share this, but I’m going to anyways. I was sitting down here with Weston Walp, our county mayor, Mitch Patel, who runs— he’s one of the local hoteliers in town. And I get a text message from Derek, call me. And I’m like, okay, the guy in charge of the FMCSA, the primary regulator, I probably should step out of this meeting. Like, no offense against Weston Wampler, our county mayor. I thought that maybe Derek Barnes is a little bit more important. So I step out, and I’m like, what’s up, man? He goes, I need to know how rates are today. So I told him the NTI rate. And he goes, what were they pre-regulation? Or I mean, pre-COVID? And I told him the rate, the NTI rate. And I said, Derek, what’s going on? He goes, the White House wants to know. And I think this goes back to the fact that the regulators— and I use the STB as the example of this— understand that when you don’t make a profit, when this industry isn’t making a profit, we clearly know you aren’t making the kinds of investments.

Speaker 4 [28:51] You can’t invest in safety. You can’t invest in quality drivers.

Speaker 1 [28:56] It’s not the big companies that are cutting the corners. It’s the mid-level operators, those family businesses with hundreds— Carol Former went bankrupt. They went bankrupt because there’s too many drivers on the road, and many of them were unregulated. And what’s not What’s not fair, David, is that the government allowed non-regulated entities, non-regulated drivers to make lots of money. Super Ego rented money.

Speaker 2 [29:21] Yeah. Yeah.

Speaker 1 [29:22] They weren’t operating compliantly. You guys are just struggling to survive.

Speaker 2 [29:25] That’s right. Absolutely.

Speaker 1 [29:26] Man, we could do this all day long. But Matt Leffler is in the box waiting to talk about the biggest story in freight, which is all of the regulatory lawsuits. And because we are generous here at FreightWaves Today, we are giving you free legal information, not, not advice, as Matt Leffler likes to remind us. If you listen to— if you’re using Matt Leffler as your attorney and you’re not paying him, you need a real attorney. I mean, you’re a real attorney.

Speaker 4 [30:01] He’s a real attorney. He’s just not working for me.

Speaker 1 [30:03] You’re a real attorney. What was your quote? Your favorite quote?

Speaker 3 [30:06] If you think you need a lawyer, you probably do. And I’m not your lawyer unless you’re paying me, then I’d love to represent you. So yes, I am a real-life lawyer, but I’m not your lawyer. That’s—

Speaker 1 [30:14] No one is paying you on FreightWaste Today, so just use his advice. That’s the disclaimer. Uh, we’ll be right back with Freight Expectations. David, thank you so much for coming in.

Speaker 3 [30:22] Glad to be here.

Speaker 1 [30:23] Always, uh, congratulations on a great quarter. We look forward to, uh, to have you back next quarter to tell us all the great things.

Speaker 2 [30:29] Come back anytime.

Speaker 1 [30:30] It is fun to talk to the two of you guys. I, I, the newspaper, I bought the Times Free Press. For our audience that doesn’t know, it’s the local newspaper, uh, here in Chattanooga. They’re gonna do a story on Sunday. I was talking to the reporter, he’s in this, this conversation about the history of the family. And, uh, we were talking, I was telling him about, um, Clyde and, and David and Max, uh, you, you guys. And, uh, he asked a question, was it always friendly? I said, not so much.

Speaker 3 [30:59] Yeah.

Speaker 1 [30:59] And, uh, so, In the ’90s and the early 2000s, there was a lot more rivalry. You guys were arm wrestling and competing.

Speaker 2 [31:08] You know, the thing is though, Max and I always loved each other. We do. We do.

Speaker 3 [31:12] We always loved each other. If I couldn’t haul the freight, I want him to haul it. That’s right.

Speaker 1 [31:15] I don’t know if that’s true. We’re gonna go back and find some people to dispute that. We’re gonna fact check that all because I know better than that. There’s a story behind it. There’s a great story behind it. We’ll be right back.

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$20M in cocaine found beneath floorboards of commercial truck trailer at California border

Phil Brink — Sat, 01 Aug 2026 13:15:00 +0000

Federal officers uncovered more than 1,000 pounds of cocaine concealed beneath floorboards on a commercial truck’s attached flatbed trailer. The truck arrived at California’s Calexico Port of Entry. Authorities estimated the recovered narcotics were worth more than $20 million. The shipment also included 269 bundles of rebar.

The driver, Jose Manuel Lopez Lopez, was the truck’s only occupant, according to federal prosecutors. Lopez, 44, entered the United States from Mexicali, Mexico. Officers arrested him after finding 366 packages within the trailer. The cocaine weighed 1,002.13 pounds, or 454.56 kilograms.

Inspectors find drugs beneath trailer floor

Customs and Border Protection officers X-rayed the attached flatbed during the border inspection. The scan showed anomalies in its wooden floorboards. A drug-sniffing dog then alerted officers to the equipment. Investigators unloaded the rebar before removing the planks.

Officers found packages stuffed beneath those boards, the U.S. Attorney’s Office reported. Homeland Security Investigations agents assisted the inquiry. Drug Enforcement Administration personnel also participated in the case. Prosecutors described the amount as “a tremendous amount of drugs, even by the standards of this district.”

The recovery marked the Southern District of California’s second-largest cocaine seizure during 2026. The larger May investigation began with a months-long task force inquiry into a supposed retail store near Otay Mesa. Agents later found a 1,933-foot cross-border tunnel stretching from Tijuana to the business. Authorities estimated the passage reached 55 feet deep and included reinforced walls, rails, ventilation and electricity.

Federal prosecutors charged four people after officers seized 1,029.60 kilograms of suspected cocaine, or 2,269.87 pounds. Authorities estimated that May recovery had a value of more than $45 million. Investigators found the tunnel’s exit beneath a storage-room floor at the Buy 4 Less store. A hydraulic lift concealed the access point, according to the U.S. Attorney’s Office.

Driver enters not-guilty plea

Lopez pleaded not guilty during his federal arraignment July 28. U.S. Magistrate Judge Lupe Rodriguez Jr. scheduled his detention hearing for Aug. 3 at 10 a.m. Court records list the matter as case number 26-mj-08705. Assistant U.S. Attorneys Paul Benjamin and Lawrence Casper are prosecuting the case.

Prosecutors charged Lopez with importing cocaine into the United States. The charge falls under Title 21, U.S. Code, Sections 952 and 960. It carries a mandatory minimum prison term of 10 years. A conviction could bring a maximum sentence of life in prison.

The California Homeland Security Task Force investigated and prosecuted the matter through Operation Take Back America. Customs and Border Protection, Homeland Security Investigations, and the Drug Enforcement Administration handled the investigative work. The federal charge remains an accusation. Lopez is presumed innocent unless proven guilty in court.

Why it matters

Criminal organizations can use legitimate commercial equipment and ordinary cargo to conceal high-value contraband. Freight professionals should understand how a routine-looking shipment can carry risks beyond theft or fraud.

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

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Aurora reports Q2 results, details per-mile pricing

Thomas Wasson — Sat, 01 Aug 2026 12:00:00 +0000

Autonomous trucking developer Aurora Innovation (NASDAQ: AUR) reported a second-quarter net loss of $270 million on $2 million in revenue Wednesday. Executives restated the driverless truck rates behind the two business models the company is selling to carriers and shippers.

Chief Financial Officer David Maday said Aurora’s transportation-as-a-service offering carries a per-mile revenue outlook in the $2-plus-per-mile range, while its driver-as-a-service subscription targets $0.85+ per mile. Maday said the company had put both figures out previously. Aurora plans to begin moving customers from the first model to the second in 2027.

The gap between those two numbers is the practical question for any fleet weighing autonomous capacity. Under TaaS, Aurora holds a U.S. Department of Transportation operating authority, controls the truck, carries the insurance, and bills a full-service rate. Under DaaS, according to the company’s Form 10-Q, customers “acquire, manage, and maintain fleets directly, while subscribing to the Aurora Driver and a suite of related services.”

Aurora’s loss amounted to 14 cents a share, wider than the 12-cent average of analysts’ estimates. Revenue rose 100% from $1 million a year earlier, which the company attributed in its Form 10-Q to increased utilization, geographical expansion, and higher fuel surcharges.

Driverless truck rates split by business model

“Obviously the TaaS deals have a higher per mile revenue outlook because it’s the full service,” Maday said. “As we’ve said before, kind of in that $2 plus range, whereas DaaS is targeting the $0.85 plus. There’s a substantial difference in TaaS versus DaaS on a revenue side, but there’s also a substantial difference on the cost side and on the margin side.”

Aurora describes the shift as customer-by-customer rather than a single cutover.

“For every customer that we sign up with a Transportation as a Service agreement, it is with the intent to then move into the DriverasaService in the following year. That’s why we’re actively working with multiple folks,” Maday said. “If you’re a Transportation as a Service customer today, we would expect that you’ll start to add Driver as a Service business model in 2027.”

The anchor for that transition is Hirschbach Motor Lines. CEO Chris Urmson said the Iowa-based refrigerated carrier is expected to put 500 tractors into its fleet across 2027 and 2028 under a memorandum of understanding announced in April, and that the agreement will set the template for later deals. Final commercial terms and a binding agreement were expected to close later this year. Hirschbach runs 2,948 power units, so the commitment amounts to roughly a sixth of its fleet.

“That really will create the framework for the rest of the partnerships that we have in the space,” Urmson said. “Customers want to own these assets. They want to see the benefit from it.”

Insurance moves with the model. Maday said Aurora carries coverage on every truck today because it is the DOT authority holder under TaaS, and that per-truck rates reflect the system’s safety record.

“When we shift over into Driver as a Service, this is an opportunity for both sides,” he said. “For our customers, it’s an opportunity for them to have an increased level of confidence and reduce incidents in safety and coverage for them. All things that they don’t have today.”

Analysts pressed for more detail on the economics with Aurora’s OEM partner, Volvo and got little. Morgan Stanley’s Ravi Shanker asked whether Volvo, which projects $3 billion in autonomous revenue within five years on trucks running the Aurora Driver, had shared the math behind that target.

“We certainly can’t share anything of Volvo’s model with you,” Urmson said, adding that Aurora has a clear understanding of the economic arrangement between the two companies.

How driverless truck rates compare with fleet costs

Aurora’s figures land close to what fleets already spend, though the two sets of numbers measure different things.

The industry-average cost to operate a truck was $2.336 per mile in 2025, the highest in the history of the American Transportation Research Institute’s annual operational costs report, released July 15. Driver compensation accounted for $1.028 of that, split between $0.818 in wages and $0.210 in benefits. It was the first year ATRI’s combined driver compensation figure topped $1 per mile.

That puts Aurora’s DaaS target of “$0.85 plus” a mile, roughly 17% less than what a fleet currently pays to employ a driver, according to Aurora. The subscription replaces the driver line while leaving fuel, equipment, maintenance, insurance, tires, and tolls with the carrier. Aurora has not said what share of terminal or remote-assist cost shifts to customers under DaaS.

A caveat: comparisons are directional rather than exact. ATRI measures carriers’ actual costs across sectors and fleet sizes, and its figures are 2025 actuals. Aurora’s are a forward-looking revenue outlook and a target for a fleet that does not yet exist.

Geography cuts the same way. Aurora’s lanes are concentrated in Texas, and the South-Central U.S. is the cheapest region ATRI tracks, at $2.23 per mile against the $2.336 national average, with driver wages of $0.781 versus $0.818 nationally. Measured against the lanes Aurora actually runs, the gap narrows.

The utilization gap is wider. ATRI put average annual mileage at 85,991 miles per truck in 2025, up 4% and rising steadily since 2022. At the bottom of Aurora’s stated rate range, the mileage implied by its own run-rate math is just under 200,000 miles per truck, more than twice the ATRI average. That assumption carries much of the weight in Aurora’s economics.

The fleet math behind an $80 million run rate

Aurora said it is fully allocated to exit 2026 with 200 driverless trucks, which it said equates to roughly an $80 million annualized revenue run rate for the TaaS business.

“We’re fully allocated to 200 trucks,” Maday said. “200 trucks at the end of year equals roughly a revenue run rate of $80 million.”

Spread across the fleet, that works out to about $400,000 per truck a year, and at the bottom of Maday’s stated range it implies just under 200,000 revenue miles per truck. The shareholder letter refers to “more than 200” trucks, and the $2 figure is a floor, so real per-truck revenue and mileage may come in lower.

That implied utilization rests on the round-the-clock running Aurora pitches as the core benefit. The company’s shareholder letter describes the Aurora Driver as adding “the potential for 24/7 capacity on key long-haul and high-volume routes.”

Aurora reaffirmed full-year 2026 revenue guidance of $14 million to $16 million, up 400% at the midpoint by the company’s math, with the fourth quarter expected to contribute more than half of the total.

Getting there depends on manufacturing. Upfitter Roush has begun building at a dedicated Aurora facility and is expected to reach an annual run rate of 1,000 trucks in October. Aurora expects 20 to 25 second-generation trucks in service by the end of the third quarter, from roughly 25 trucks operating across all generations today. That puts the bulk of the buildout in the fourth quarter.

Urmson flagged the risk in that schedule. “As you know, there’s a ramp-up that it takes whenever you stand up a new manufacturing line,” he said. “We also understand that there may be challenges along that path. We’re trying to provide what we think is reasonable guidance to where we expect that to net out.”

Older Peterbilt units will be phased out as International and Volvo platforms take over, though Urmson said Aurora expects to reintroduce Peterbilt trucks once its third-generation hardware is ready. Maday said Aurora would fund more company-owned trucks if demand warranted. “I think we’ve shared before that we’d be willing to support up to 500 TaaS trucks if needed,” he said.

Hardware cost is the margin lever

Aurora expects its second-generation hardware kit, deployed commercially for the first time in late July on the International LT platform, to cut Aurora Driver hardware costs by more than 50%. Aurora says the kit is engineered for 1 million miles of operation.

“In terms of the 50% cost reduction, this is what we’ve been talking about for some time, is how that second generation hardware ultimately allows us to get to a point where we can operate the business with unit economic profitability,” Urmson said.

Maday acknowledged component cost pressure but said it does not move the margin math when spread across the kit’s service life. “Certainly, there are some headwinds in terms of costs, but these kits are also designed and expected to last a million miles,” he said. “Some minor increases in component costs when you look at [it] on a unit economic basis … for gross profit over a per mile basis, are not materially going to impact our gross margin projections.”

A third-generation kit built by AUMOVIO, formerly Continental, has a planned start of production in the second half of 2027. Aurora’s 10-Q says the company plans to rely on AUMOVIO as a single supplier for that hardware and warns it “may be unable to find alternative suppliers to satisfactorily deliver its products, if at all.”

Funding the ramp

Aurora used $225 million in operating cash during the quarter and spent $31 million on capital expenditures. That operating figure sits above the company’s guided range of $190 million to $220 million a quarter; Aurora said the quarter landed within target once $63 million in cash bonus payments funded through its at-the-market equity program are excluded.

The company issued 30 million Class A shares through that program during the quarter for $215 million in net proceeds, lifting shares issued and outstanding to 1.998 billion from 1.943 billion at the end of 2025. Aurora ended June with nearly $1.2 billion in cash and short-term investments and said in the 10-Q that its liquidity is sufficient for at least 12 months.

What carriers are buying

Aurora added TaaS agreements with Charger Logistics on the Dallas-Laredo lane and Value Truck on Dallas-Laredo and Fort Worth-Phoenix, and has started to haul frac sand for Detmar Logistics with nobody behind the wheel between Midland and Monahans, Texas. Volvo Autonomous Solutions is running Aurora-powered freight for DSV and AVI-SPL in Texas.

Aurora said the Aurora Driver has logged nearly 440,000 driverless miles since launch through June 30, with a 100% on-time performance record and no collisions attributed to the Aurora Driver, against more than 6 million cumulative commercial miles.

Urmson disclosed one collision that fell outside the reported quarter. An Aurora truck in manual mode, with the autonomy system not engaged, was struck in Fort Worth in July by a vehicle that ran a red light. Both vehicles sustained significant damage and no serious injuries were reported. Urmson said log review and simulation confirmed the Aurora Driver perceived the other vehicle nearly six seconds before impact and would have slowed to avoid it.

Urmson said carriers are adopting the technology for capacity and asset utilization rather than headcount cost, and said he has made the competitive case before.

“This technology is so impactful, transformational, improving safety, improving fuel economy, improving utilization, for customers, that if you’re not using our stuff in the next five years, you just won’t be competitive in long haul,” he said.

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Erie truck driver faces 22 charges after police say he fled 9-vehicle crash carrying Bud Light

Phil Brink — Fri, 31 Jul 2026 20:41:05 +0000

An Erie, Pennsylvania, commercial driver faces 22 charges after a July 23 crash involving nine vehicles. According to the affidavit, police identified Irabaruta Ezechiel as the driver of a 2022 Freightliner semi-truck. A court-filed affidavit places the collision at West 12th and Myrtle streets in Erie PA. Judge Alison M. Scarpitti denied bail after Ezechiel’s July 24 arrest.

According to the affidavit, the semi traveled east through the 300 block of West 12th Street. Five motorcycles and four station wagons waited at a steady red light, the officer wrote. The document identifies one operator on each motorcycle and nine occupants inside the station wagons. Police claim the Freightliner struck the station wagons before it struck the motorcycles.

Affidavit describes flight from the truck

The affidavit states that Ezechiel stumbled from the cab after the collision. It claims he fled while carrying a case of Bud Light bottles. The officer wrote that one open Bud Light bottle remained in the center cup holder. Witnesses chased and subdued Ezechiel behind a nearby U-Haul before police arrived, according to the filing.

The affidavit states that officers transported Ezechiel to Saint Vincent Hospital after his arrest. The investigating officer noted a “strong odor of an alcoholic beverage” and bloodshot, watery eyes. A charge nurse later told the officer that Ezechiel needed emergency-room care because he was unconscious. The officer then obtained a nighttime warrant and collected two vials of blood.

The officer sent the blood kit to Pennsylvania State Police for BAC testing. Lab results remained pending when police filed the complaint. The affidavit does not provide a blood-alcohol result.

An investigator later visited UPMC Hamot Hospital, according to the affidavit. The filing reports that eight of 10 crash victims went there for treatment. It also lists two suspected serious injuries and six suspected minor injuries. X-rays and CT scans remained pending when the officer completed the document.

The affidavit first identifies five motorcycle operators and nine station-wagon occupants. It does not explain why the later hospital section refers to 10 victims. The document does not name injured people or provide current medical conditions. It also does not report a death.

Public docket lists 22 current charges

The public docket lists two aggravated-assault-by-vehicle-while-DUI charges. It also lists two aggravated-assault-by-vehicle charges. Three separate DUI counts involve commercial-vehicle alcohol use, high-rate alcohol and general impairment. Those charges remain accusations, and no court has entered a verdict.

The docket includes nine misdemeanor property-damage counts involving attended vehicles or property. It also lists reckless endangerment, open-container, reckless-driving and unsafe-speed charges.

FreightWaves uses the docket’s current 22-charge total. A preliminary hearing is scheduled for Aug. 7 in Erie County Central Court. Louis Callahan of the Erie County Public Defender’s Office represents Ezechiel. Callahan declined to comment.

Why it matters

Fleets need clear impairment policies, incident reporting and evidence-preservation procedures after serious crashes. Those practices protect people and create factual records for investigators, insurers and employers.

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

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Amazon ramps up delivery speed, robotics roll out

Eric Kulisch — Fri, 31 Jul 2026 18:29:15 +0000

Amazon continued to speed up delivery service and make improvements to its fulfillment network during the second quarter, executives said in conjunction with the release of financial results on Thursday.

Globally, Amazon (NASDAQ: AMZN) delivered more than 40% of items same day or overnight in the first half of the year versus the same period last year. And it expanded ultra-fast delivery service Amazon Now, which promises delivery in 30 minutes or less on thousands of everyday essentials, to 80 cities and towns across the United States and several major cities in Egypt.

Amazon Now is available in nine countries and over 250 cities and towns, including Atlanta, Houston and Denver. The service has proven popular, with more than 80% growth in gross sales and units sold quarter-over-quarter and more than 60% more customers served from the prior quarter, CEO Andy Jassey told analysts. Faster delivery speeds combined with a broad selection of products on the marketplace are driving consumers to make more purchases on the Amazon site, he added.

Ultra-fast delivery is the latest move to increase delivery speed and keep customers buying on Amazon’s marketplace by offering extreme convenience. Amazon also offers one-hour and three-hour delivery on more than 90,000 products and same-day delivery on millions of items.

Chief Financial Officer Brian Olsavsky said Amazon made progress optimizing inventory, shortening shipping distances, reducing touches per package, and improving consolidation rates. The company is also expanding deployment of robotics and automation, which have been at the center of logistics operations for many years.

Amazon recently surpassed 1 million robots developed, produced and deployed across its operations network.

“We’re retrofitting our facilities with our latest generation technology, and we expect to more than double our fleet of robotic arms, like Cardinal and Sparrow, in 2026,” he said on the earnings call.

Cardinal is a robotic arm that tightly loads packages up to 50 pounds into carts in a Tetris-like manner.

Sparrow is a robotic system that supports employees who aggregate items for customer orders. This robotic arm picks up and moves individual items from containers into specific totes to send off to employees before they’re packaged. It can lift packages up to 12 pounds. Sparrow uses computer vision and AI to identify the correct item and add it to the tote on its delivery journey.

In early June, Amazon said it planned to install three types of new robots across its European fulfillment centers as part of a $10 billion modernization plan.

[Why It Matters: Amazon continues to set the bar for speed to beat and fulfillment costs across e-commerce logistics.]

Amazon was able to partially offset rising transportation costs driven by fuel inflation from the Iran war and higher trucking rates by implementing a fuel and logistics surcharge in April for Fulfillment by Amazon customers, Olsavsky said.

“Looking ahead, we see meaningful opportunities to further enhance productivity across our global fulfillment network, all while continuing to raise the bar in delivery speed. While operating margin may fluctuate and progress may not always be linear, we take a deliberate approach to achieving sustained long-term improvement in our cost to serve,” he said.

Many merchants are rethinking the speed equation, betting that most customers will be satisfied with predictable delivery times.

“For years, retailers have treated faster shipping as the way to compete with Amazon. That’s becoming a harder strategy to justify as fulfillment costs rise and logistics networks become more fragmented. Amazon has the scale and logistics infrastructure to absorb rising fulfillment and delivery costs, but most retailers don’t have that luxury. Brands don’t need to match the delivery speed of industry giants; they need to focus on giving customers a reason to come back after the package ships,” said Eric Kobe, CEO of Route, a post-purchase tech platform, via email.

Amazon’s stock leaped 15% by midday on Friday as cloud services drove outsize earnings gains. Amazon Web Services delivered $42 billion in revenue during the second quarter. Overall, Amazon reported a 20% gain in net sales to $200.6 billion. Operating income was $27.5 billion, up 43% year over year.

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

Write to Eric Kulisch at ekulisch@freightwaves.com.

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Gains from equipment sales save Heartland’s Q2

Todd Maiden — Fri, 31 Jul 2026 17:36:21 +0000

Gains from equipment sales allowed truckload carrier Heartland Express to return to profitability in the second quarter.

Heartland (NASDAQ: HTLD) reported net income of $10.6 million, or 14 cents per share, for the period. That compared to a net loss of 14 cents per share in the year-ago quarter. However, the turnaround was entirely tied to a $22-million year-over-year increase on gains from equipment sales (a 22-cent-per-share tailwind at a normalized tax rate).

The North Liberty, Iowa-based company culled its fleet size by strategically disposing underutilized equipment.

“We expect to continue to dispose of excess trailers within our fleet as used equipment market conditions improve,” the company said in a news release.

Table: Heartland Express’ key performance indicators

Revenue totaled $184 million in the quarter, a 13% y/y decline. Excluding fuel surcharges, revenue was down 18% y/y.

Heartland does not host a quarterly call, nor does it provide operating metrics for utilization and pricing.

The company reported an 88.3% adjusted operating ratio (inverse of operating margin). However, the OR was closer to 103% without the outsized gains.

“The improved financial results delivered reflect stronger freight volumes and improved customer pricing resulting from ongoing industry capacity reductions along with reduced operating costs and strategic disposals of under-utilized assets,” said CEO Mike Gerdin.

SONAR: National Truckload Index (linehaul only – NTIL.USA) for 2026 (blue shaded area), 2025 (yellow line), 2024 (green line) and 2023 (pink line). The NTIL is based on an average of booked spot dry van loads from 250,000 lanes. The NTIL is a seven-day moving average of linehaul spot rates excluding fuel. Rates remain significantly higher on a y/y comparison in July.

Operating cash flows totaled $36 million in the first half of the year. Heartland reduced net debt by $33 million in the period to $73 million. It ended the quarter with $89 million available on an untapped revolving credit facility and was in compliance with financial covenants.

An average tractor age of 2.3 years was down from 2.6 years in the year-ago quarter.

Shares of HTLD were down 1.6% at 12:42 p.m. EDT on Friday compared to the S&P 500, which was up 0.4%.

Why it matters? The story shows how impactful gains on asset sales can be on a truckload carrier’s financial results.

More FreightWaves articles by Todd Maiden:

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Covenant’s earnings drop stock, company focused long-term

John Kingston — Fri, 31 Jul 2026 17:11:03 +0000

Covenant Logistics stock plunged Thursday on an earnings report that had little in it that reflected the strengthening truckload market.

It was clear from the opening remarks on the company’s conference call with analysts that CFO James Grant was directing his comments at countering the weak numbers in the financial report.

His core message was that Covenant (NYSE: CVLG) is not set up to take advantage of sudden surges in freight rates like those that have marked the first half of 2026, and that is a good thing.

Instead, according to Grant, Covenant has undergone structural changes designed to make it more resilient in good times and bad, and is built to benefit from a longer structural strengthening of the truck market.

Grant said ten years ago, Covenant was “almost entirely an irregular route carrier without multiple-year committed customer contracts. That meant our financial results were significantly linked to the ups and downs of the volatile freight cycle, making it difficult for investors to understand the long-term value proposition of our business.”

But Covenant pivoted from that to a “strategy to deeply embed ourselves in our customer supply chains.”

“We began moving away from a highly volatile, commoditized business, (and) intentionally invested in more specialized value-added businesses, such as dedicated and warehousing, which require multiyear committed relationships,” Grant said.

It showed during tough times

The success of that strategy, Grant said, could best be seen during the depths of the freight recession. “When the market bottomed, our margins held up much better than our peer group average and our own historical results,” Grant said.

The fact that Covenant has not soared during the surge in the current freight market is not deterring the company from sticking with that strategy, Grant said.

Instead, Covenant will chase three “execution priorities,” he said.

”Transitioning expiring contracts into new long-term commitments.”
”Moving more of our uncommitted capacity into committed revenue.”
Having its 3PL arm, Managed Freight, “return to normal levels as contract rates catch up to capacity costs.”

“We expect steady improvements, not a hockey stick” is how Grant described the longer-term goal.

Covenant stock Thursday was down 11.2% to $36.85, a decline of $4.65. For the month, the company’s stock after Thursday’s performance was down about 16.6%, though for the 52 weeks it is up 51.2%. Since a 52-week high of $49.88 on July 21, Covenant stock’s Thursday close totaled a drop of 26.1%.

Covenant stock Friday was unchanged to slightly lower mid-morning.

The reasons why the company’s earnings might spur a decline were not hard to find. On a 6.16% increase in freight revenue, adjusted earnings per share were down to 42 cents from 45 cents a year earlier.

Combined truckload operations recorded a 3.36% decline in revenue and a small deterioration in operating ratio (OR), to 94.8% from 94.5% a year earlier.

The source of the decline was primarily from its Expedited division. Freight revenue there excluding fuel was down about 12.9% and the adjusted OR was down 70 basis points, coming in at 94.6%.

Expedited a laggard

Grant addressed the lagging performance of the Expedited division.

That segment, according to the company’s 10-K published earlier this year, “primarily provides truckload services to customers with high service freight and delivery standards, such as 1,000 miles in 22 hours, or 15-minute delivery windows. Expedited services generally require two-person driver teams on equipment either owned or leased by Covenant.”

“The segment’s profitability improved sequentially from the first quarter by 450 basis points, but still fell short of our expectations for the quarter,” Grant said on the conference call in discussing Expedited. “Over the past 12 months, this segment has undertaken a considerable amount of transition. While the fleet was reduced by 17%, freight revenue per average tractor has improved by 6.8%. Our focus on growing our customer base with high-value cargo through multiyear committed capacity agreements has resulted in improved freight revenue per total mile but has been partially offset by a reduction in miles per average tractor for the period.”

Tough quarter for insurance costs

Insurance was a significant part of the discussion on the conference call. Paul Bunn, the company’s president, said the OR performance for both the Dedicated and Expedited segments had 1.5 to 2 points of a negative impact from insurance costs, relative to what he said was the “run rate” for the prior 24 months.

Insurance and claims were $18.1 million in the second quarter, up from $17.3 million a year earlier. In the first quarter, that expense was $12.6 million.

“We had a number of mediations pop up in the second quarter,” Bunn said. “As you know, in this litigious environment, if you can get a mediation and get it settled and off the books, that’s what you do.”

Bunn added that the number of mediations in the quarter was more than normal. While none were “monsters,” Bunn said “it doesn’t take much for a claim to be seven figures anymore.”

In the wake of the latest nuclear verdict against trucking, one of the largest ever against C.H. Robinson, insurance came up on the Covenant call as it has done in numerous other earnings calls this quarter.

“I won’t call them smaller but a high volume,” Grant said of the second quarter claims.

“With the amount of self insurance we carry, there’s no doubt that it can be volatile from quarter to quarter, and having to forecast that is difficult,” Grant said.

Grant said the insurance claims in the quarter were “the highest quarter historically.”

More articles by John Kingston

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Atlas grows Kodiak driverless truck fleet to 100 rigs

Thomas Wasson — Fri, 31 Jul 2026 16:25:11 +0000

One of autonomous trucking’s most convincing commercial proof points isn’t running down an interstate. It’s hauling frac sand along a 42-mile conveyor in the Permian Basin.

Atlas Energy Solutions (NYSE: AESI) announced Friday an expansion of its driverless proppant delivery program with Kodiak AI (Nasdaq: KDK), adding a second simultaneous load-out point along its Dune Express sand conveyor system. The companies also agreed to a timetable that grows the Atlas driverless truck fleet from 28 trucks to 100 by mid-2027.

Two Depots, One Basin

The second load-out point changes what Atlas can promise to a customer. Atlas is now running driverless trucks concurrently from sites in Texas and New Mexico, roughly 90 minutes apart. Previously, its autonomous trucks worked one load-out point at a time.

The practical effect: Atlas can serve well sites across a wider slice of the Permian at the same time, rather than sequencing deliveries around a single origin.

Atlas supplies proppant to oil and gas producers and manages last-mile delivery to the well site, pairing mining and transportation automation with logistics management. Sand is the least glamorous input in a completion job and one of the most schedule-sensitive. A crew waiting on sand is a crew burning money.

“This partnership with Kodiak is a critical part of the Atlas strategy to transform oilfield sand logistics through innovation,” said John Turner, CEO and president of Atlas Energy Solutions. “Our mission is to seek critical energy infrastructure with inefficiencies, then engineer solutions that improve efficiency, reduce risk and enhance our customers’ operational success.”

A Driverless Truck Fleet Measured in Tons

Atlas has scaled its autonomous program steadily since its first driverless deployments in 2024. As of March 31, 2026, the company operated 28 driverless trucks across 15 distinct routes.

Those trucks have carried roughly 7,000 loads and hauled more than 450,000 tons of sand. The fleet logged more than 23,500 driverless hours in the first quarter of 2026 alone.

The single-day record came on July 20, when Kodiak-powered trucks delivered 176 loads of sand. That is the highest daily count across 18 months of driverless deployments with Atlas in the Permian Basin.

In the release, Kodiak notes it became the first company to deploy customer-owned and -operated driverless trucks in commercial service in 2024. The trucks run the Kodiak Driver, an autonomous system pairing the company’s software with modular, vehicle-agnostic hardware.

“Together, Atlas and Kodiak have deployed the world’s largest fleet of driverless big-rig trucks,” said Don Burnette, founder and CEO of Kodiak.

Three Trailers, 135 Tons

Earlier this year, the two companies introduced a capability that lets a single autonomous truck haul three connected trailers at once. Atlas and Kodiak describe it as the first autonomous triple-trailer trucking operation, with a combined loaded weight above 135 tons.

For a sand hauler, that math adds up. Fewer tractors moving the same tonnage compresses cost per ton on the most repetitive leg of a completion job.

The Public Road Test Ahead

Looking ahead, Atlas and Kodiak expect the fleet to operate on public roads in early 2027. Kodiak-equipped Atlas trucks can already operate in mixed/two-way traffic. Timing is subject to regulatory and operational milestones, and so is the 100-truck target.

“We’ve demonstrated that autonomous trucking is delivering meaningful results today,” Burnette said. “Our expanding partnership, which now covers two unique locations, is creating a blueprint for how autonomy can transform logistics by improving efficiency, increasing productivity, and delivering lasting value for customers at commercial scale.”

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FedEx moves closer to deploying robots that can load trailers

Eric Kulisch — Fri, 31 Jul 2026 14:24:06 +0000

Thursday was a busy day for companies developing automated truck loading and unloading technology.

FedEx Corp. (NYSE: FDX) announced it is scaling up use of a specialized robot for loading truck trailers at its Hagerstown, Maryland, hub after validating the technology from startup Dexterity Inc. over several years.

And Pickle Robot Company said it will pair its trailer unloading robot with Ambi Robotics’s system to automate the movement of packages from the trailer through pallet stacking and warehouse receiving operations.

The expanded use case in Hagerstown will allow FedEx to continue evaluating Dexterity’s AI-enabled trailer-loading system at a larger operational scale in a high-volume logistics environment.

Technology assistance is being pursued to improve worker safety and network efficiency.

Loading and unloading trailers is one of the most physically demanding and challenging tasks for warehouse workers in FedEx’s package operations, requiring real-time problem solving. Automating that workflow has been difficult because of the variability of package sizes, weights, and loading conditions, as well as the need to implement it across thousands of trailers in the FedEx system.

The advent of physical AI — which lets autonomous systems like robots perceive, understand, reason and perform or orchestrate complex functions in the real world by executing movements through motors, robotic arms or wheels — has brought the technology closer to commercial reality.

“Truck unloading and truck loading are a very difficult problem for robotics to solve — packages come in every size, shape and weight,” said CEO Raj Subrmaniam, in an interview with the New York Times in January. “We’re not looking for humanoid robots. We’re looking for super humanoid robots because maybe they need to have a couple of elbows. More degrees of freedom. It’s not ready for prime time yet.”

The ongoing tests with Dexterity allow FedEx to better analyze how AI-assisted robots perform in trailer-loading operations and how it can be integrated into broader hub operations, including destination planning, trailer assignment, maintenance and workforce processes, FedEx said in a news release.

Future deployment decisions will be informed by safety, operational performance, reliability, business needs, and lessons learned from evaluating the technology at a larger operational scale, said spokeswoman Christina Meek. The Dexterity loader is also being used at a facility in Tracy, California, she added.

Dexterity’s trailer loader is controlled by Foresight, an AI model that makes real-time decisions in dynamic environments. By combining vision, depth, and touch, Foresight predicts how physical AI actions impact the world. In autonomous trailer loading, it reasons across three spatial dimensions and time to optimize how packages are placed for space, stability, and speed across a wide range of operating conditions. Foresight powers Dexterity’s dual-armed “human-like” robot, Mech, which is designed for heavy industrial operations, while remaining compact enough to operate inside trailers.

FedEx hopefully can begin scaling up automated trailer unloading at more facilities within a couple of years, Subramaniam said last month on Fortune’s “Titans and Disruptors of Industry” podcast.

In February, FedEx announced a pilot implementation of the Scoop autonomous robotic package unloader from Berkshire Grey Inc., a subsidiary of SoftBank pursuing AI-powered robotic solutions for supply chain processes, after a multiyear collaboration. The Scoop has been engineered specifically for bulk automated trailer unloading, delivering a continuous flow and handling all package types. FedEx said at the time that the first Scoop will be operating in a live environment this year.

(Why It Matters: Automating the process of loading and unloading trailers could unlock huge savings for trucking companies and reduce heavy lifting for employees.)

The Scoop trailer unloader. (Photo: FedEx)

In 2021, FedEx deployed Berkshire Grey’s Robotic Product Sortation and Identification (RPSi) systems to robotically sort small packages that arrive daily and require distribution. In 2022, the companies expanded their relationship, announcing an agreement for developing broader AI robotic capabilities to help improve the safety and efficiency of FedEx package handling operations globally.

Pickle partnership

Meanwhile, Berkeley, California-based Ambi Robotics and Pickle Robot, Charleston, Massachusetts, said they had successfully integrated their robotic systems to provide an end-to-end, trailer-to-warehouse automated solution in response to demand from Fortune 500 retail and logistics companies.

The deployment combines Pickle Robot’s trailer-unloading robots with Ambi Robotics’ AmbiStack multi-purpose stacking solution, enabling a continuous and autonomous flow of packages from inbound trailers through receiving operations, the startup companies said in a news release. Cases are unloaded from trailers by Pickle Robot’s systems, then inducted via conveyor into AmbiStack for identification, scanning, and stacking for downstream warehouse operations. The technology leverages existing warehouse infrastructure and systems, enabling customers to fully automate critical inbound processes without major facility redesigns.

The collaboration demonstrates how warehouse operators can deploy specialized automation technologies from multiple providers to address labor-intensive workflows, such as dock-door transfers, while maintaining operational flexibility, according to the announcement.

“As Physical AI transforms supply chains, interoperability will become increasingly important. We believe the future of warehouse automation will be built on collaboration across the industry, where specialized systems work together to solve complex operational challenges,” said Ambi Robotics CEO Jim Liefer.

“Customers want automation that improves real-world throughput while fitting into existing operations,” said AJ Meyer, founder and CEO of Pickle Robot Co. “This collaboration shows how robotic unloading can integrate seamlessly with downstream automation systems to help move goods more efficiently through the warehouse, and it sets the stage for orchestrating multi-robot processes that can self-improve and self-correct over time.”

More robotics deployments for trailers

In May 2025, DHL Group signed a memorandum of agreement to deploy more than 1,000 additional units of Boston Dynamics’ Stretch robot, designed to automate container unloading, following initial DHL trials. Boston Dynamics said then that deployments of Stretch have achieved case unloading rates of up to 700 cases per hour and contributed to higher employee satisfaction by reducing the need for physically demanding work in hot or cold trailers.

New UPS tool helps online shoppers calculate import fees before buying

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

Phil Brink — Fri, 31 Jul 2026 13:53:21 +0000

California Highway Patrol investigators recovered more than $500,000 in stolen merchandise from a discount retail store in Rialto. The recovery followed a July 28 search warrant. CHP linked the business to multiple cargo thefts across Southern California. Authorities returned the merchandise to the victims.

Search warrant follows cargo theft inquiry

The CHP Inland Division Cargo Theft Interdiction Program handled the investigation. Detectives determined the retailer stored merchandise connected to several theft cases. The agency did not identify the store in its announcement. CHP also did not name any suspects or disclose potential charges.

A semi-truck holds merchandise recovered during CHP’s July 28 cargo-theft operation in Rialto, California. (Photo: California Highway Patrol)

“Cargo theft impacts businesses, consumers, and our economy,” CHP wrote in its announcement. The agency described the operation as part of its ongoing work against organized theft. Investigators focus on recovering stolen property for affected companies. CHP also seeks accountability from those responsible.

California created the Cargo Theft Interdiction Program after lawmakers passed Assembly Bill 813 in 1994. The measure provided funding for statewide cargo-theft suppression efforts. CHP created the program to investigate thefts involving commercial freight. The agency also uses a statewide information system to share case details and identify trends.

CHP highlights Southern California enforcement

The Cargo Theft Interdiction Program works within CHP’s Inland Division. Its investigators handle cases involving stolen freight and merchandise. The Rialto operation centered on goods connected to more than one reported theft. CHP did not provide a breakdown of recovered products.

The announcement did not identify the victim companies. It also did not state when the underlying thefts occurred. CHP gave no estimated loss beyond the recovery’s value. FreightWaves requested comment from CHP Inland Division before publication. The agency had not responded when this story published. The request sought releasable details about the merchandise, victims and potential charges. FreightWaves will update this article if CHP provides additional information.

Why it matters

This recovery shows how cargo theft can extend far beyond the original crime scene. When stolen freight reaches a retail shelf, the trail becomes harder to follow and recovery becomes less likely. Brokers, shippers and carriers need verification and shipment records that help investigators connect the cargo back to its source.

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

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Schneider National pushes price amid market imbalance

Todd Maiden — Fri, 31 Jul 2026 13:13:57 +0000

Multimodal transportation provider Schneider National handily beat second-quarter expectations and raised its full-year earnings outlook. It said a capacity constrained truckload market is “only in the early stages of rate recovery” and that it will use the favorable imbalance to “recoup multiple years of significant cost inflation.”

Schneider’s (NYSE: SNDR) network fleet (one-way) captured double-digit rate increases on contract renewals in the quarter. Mini-bid activity is up as shippers grow more concerned with securing capacity for peak season. Schneider increased its spot market exposure, noting June closely resembled March 2021, the prior cycle peak.

Schneider reported adjusted earnings per share of 29 cents for the second quarter, which was 6 cents above the consensus estimate and 8 cents higher year over year. Consolidated revenue of $1.57 billion was 10% higher y/y and better than the $1.52 billion consensus estimate.

The company raised its full-year adjusted EPS guidance to a range of 90 cents to $1.10, an 18% increase from its previous outlook (at the midpoints). The 2026 consensus estimate was 96 cents at the time of the print. (The company reported full-year 2025 adjusted EPS of 63 cents.)

“The positive impact of non-compliant capacity exiting the market has been realized more quickly than initially anticipated, and we remain confident that the enterprise will continue to deliver strong operating leverage,” said President and CEO Jim Filter.

Table: Schneider National’s key performance indicators

Truckload revenue increased 1% y/y to $628 million as a 5% increase in revenue per truck was partially offset by a 4% decline in average trucks in service. The company said the lower tractor count was largely due to a tighter driver hiring market. However, improved asset utilization is offsetting the lower truck count.

The one-way fleet recorded a 16% y/y increase in revenue per truck per week, with dedicated reporting a 1% increase.

It flagged the loss of a large dedicated customer, which will be a headwind in the third quarter. This has been accounted for in the company’s guidance. It sold dedicated service on 500 new trucks in the first half of the year. It said new dedicated contracts will backfill some of the open trucks from the customer departure, but it may also move some units over to the one-way fleet to take advantage of the spot market.

The TL unit reported a 91.8% operating ratio (inverse of operating margin), which was 180 basis points better y/y.

Intermodal revenue slid 1% y/y to $262 million. Revenue per load was down 2% as length of haul declined. It said the unit has been getting low-single-digit rate increases, but more recent contract renewals are garnering mid-single-digit increases. Finding drayage drivers is getting more difficult, but Schneider isn’t adding third-party operators to chase volume.

The intermodal unit reported a 93% OR, 90 bps better y/y.

Logistics revenue increased 11% y/y to $376 million. The unit booked a 96.8% OR, 90 bps better y/y.

Net debt leverage ended the quarter at 0.2x, down from 0.3x at the end of 2025. Schneider lowered its full-year net capex plan to a range of $350 million to $400 million as it will purchase fewer trailers than previously planned. Net capex totaled $289 million in 2025.

Why it matters? Schneider National’s results serve as a bellwether for the health of the truckload and intermodal markets. Its commentary on rate recovery and capacity management provides a benchmark for other asset-based carriers.

More FreightWaves articles by Todd Maiden:

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

Phil Brink — Fri, 31 Jul 2026 12:00:00 +0000

Law enforcement officers in South Carolina and North Carolina recovered 13 semi-trucks, three trailers and two motor vehicles worth more than $1 million. The recovery came during an ongoing Florence County commercial vehicle theft investigation. Florence County detectives arrested two North Carolina men last week. Each defendant faces nine counts of grand larceny.

The Florence County Sheriff’s Office accuses Andre Horace David Jumpp and Prince Raymond Leon Betts of stealing nine commercial motor vehicles. The reported thefts occurred between Nov. 8, 2022, and Oct. 4, 2025. Authorities place the value of that equipment at $876,500. The cases involve locations in the Florence, South Carolina, area.

Two arrested after multiyear theft probe

Detectives arrested Jumpp, 38, on July 22. Betts, 37, entered custody two days later. Jumpp lives in Home Mills, North Carolina, according to the sheriff’s office. Betts lives in Raeford, North Carolina.

Both men face nine grand larceny charges under South Carolina law. The sheriff’s office also listed criminal conspiracy among the counts. Prosecutors charged each defendant with unlawful entry into enclosed places. The cases also include malicious injury to property charges.

Recovery includes 18 vehicles

The Florence County Sheriff’s Office worked with the Brunswick County Sheriff’s Office on the matter. Other North Carolina law enforcement agencies also participated. Officers located two motor vehicles during the investigation. They also found 13 tractors and three trailers.

The agency did not identify the owners of the recovered equipment. Its release did not disclose where officers found the vehicles. Officials also did not specify when each recovery occurred. The announcement does not explain whether every item directly connects to the charges against Jumpp and Betts.

Jumpp left the Florence County Detention Center on a $68,436 surety bond. Betts posted a $137,596 surety bond, according to the release. The release notes that additional charges and arrests remain possible.

The charges represent accusations, not convictions. Prosecutors must prove the allegations in court. Both defendants retain the presumption of innocence. The Florence County Sheriff’s Office told FreightWaves its release remains the agency’s only public comment because the investigation is ongoing.

Why it matters

Stolen tractors and trailers can disrupt freight movement long after the equipment leaves a yard. This case also highlights the value of equipment records, secure parking controls and fast reporting when commercial vehicles disappear.

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

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Inside Hirschbach’s push into AI driver communication

Thomas Wasson — Fri, 31 Jul 2026 11:00:00 +0000

Every large fleet chasing AI eventually runs into the same fork in the road: buy a partner solution or build the technology in-house. Hirschbach Motor Lines picked a partner, and the trucking carrier is now automating driver communication through an AI agent built by Augment.

The rollout began on the brokerage side, where the agent, named Augie, now handles all outbound driver outreach across three interaction types: driver information requests, pickup arrivals and delivery arrivals.

Those three interactions represent the automatable slice of the work. They account for roughly 40% of Hirschbach’s overall track-and-trace volume, excluding power-only freight. Within that slice, Augie is already reaching drivers on more than 85% of the carrier’s Logistics Solutions loads and automating over 300 pickup and delivery check-ins a week.

“For me, the early success isn’t simply about the number of calls or messages Augie handles,” Ivan Ramirez, CTO at Hirschbach Motor Lines, told FreightWaves. “It’s that we’re proving AI can become part of the operating model and reliably own a defined portion of the work. That was the big unknown: it works really well in demo environments. How does it actually work in real environments? And we’ve gotten it there.”

Customers can also rename Augie. In the case of Hirschbach, they refer to their AI teammate as Hirschie.

The Buy-Versus-Build Decision Behind AI Driver Communication

The decision to bring in an outside AI partner came after roughly a year and a half of evaluating vendors, many of whom showed up with polished voice demos and little else built.

“I knew none of these guys had anything built,” Ramirez said. “They’d all just gone and raised a bunch of money and had this great idea on how they were going to build out these different AI platforms. For me and our team, it was really about the team. What team are we going to partner with?”

Augment stood out on three fronts, Ramirez said: a team that combined logistics experience with technology depth, a product roadmap that stretched beyond track-and-trace into appointment scheduling, load creation and carrier communication, and a willingness to let Hirschbach shape that roadmap rather than wait on a vendor’s release schedule.

“We did not want a traditional vendor relationship where we purchased a fixed product and waited for features,” Ramirez said. “We’ve done that before and it’s been a horrible experience. We wanted a partner willing to learn alongside us.”

That led to a deliberate build-versus-buy decision, even with a technology team capable of doing more in-house.

“We made a decision early on that Hirschbach is a transportation company that uses AI to operate better,” Ramirez said. “We’re not trying to become an AI infrastructure company. So let’s go find a really good partner where we can get to value a lot faster and get real operational value.”

Why Large Fleets Are Different

Selling AI into an enterprise carrier looks nothing like selling it into a startup-friendly niche, according to Harish Abbott, co-founder and CEO of Augment. Dedicated operations alone carry layers of complexity: multiple stops, multiple loads, bill of lading handling and facility-specific assignment rules.

“The very first thing in all of this is: how do we get folks out of the day-to-day busy stuff, the unglamorous work, so they can be freed up to do more creative work,” Abbott said.

Appointment scheduling is one of the biggest pain points large fleets bring to the table, Abbott said, particularly through high-volume retail portals.

“It’s not easy to make appointments, especially in these large portals like Walmart and others,” Abbott said. “Power-only is very different than live load, very different than dedicated runs.”

The bigger opportunity, he said, is tying appointment data back into hours-of-service and driver planning so fleets can see the whole network rather than one appointment at a time.

The Data Problem Behind the 20%

Roughly 70% to 80% of Hirschbach’s shipments arrive through EDI already structured for automation. The rest shows up messier: tender emails, PDFs, or a bill of lading handed straight to a driver on a dedicated run.

“How do you get them into the system, assigned to the right customer code, with a high degree of certainty so humans aren’t entering that, but also faster?” Abbott said. “So everything is detention. Accessorials are all tied to that shipment very early on versus finger-pointing that happens after a load is delivered.”

Ramirez pointed to the EDI 214 status message as an example of the inefficiency AI is meant to erase.

“If I look at my EDI transactions, the biggest part of the 214, that’s where the biggest expense is,” Ramirez said. “I’m already giving you guys all this stuff. Why are you reaching out for this stuff again? … We’re a low-margin business. I’m trying to figure out a way, and AI is a perfect answer to this stuff. It’s the stuff that we absolutely need to do. Let’s just let AI handle it and we’ll forget about it.”

Abbott said narrow, specific use cases, not a broad AI rollout, are what earn an operator’s trust.

“If you sprinkle AI across the board like ‘here’s this cool stuff and it’s going to make everybody’s life better,’ the operator’s like, ‘Okay, my life hasn’t changed. I’m still doing the same thing,'” Abbott said. “For operators, you have to be extremely specific: ‘Hey, you’re spending this much time on X and now let’s have AI or Augie take care of it.’ And they see that.”

The AI Agent Hirschbach Wants for Driver Retention

The next use case Hirschbach plans to activate is an AI assistant sitting between drivers and their driver leaders, fielding routine questions so leaders can spend their time on the conversations that actually keep drivers around.

“The biggest complaints we get right now from our drivers is ‘I can’t get ahold of my driver leader,'” Ramirez said. “I’m a driver leader. I have 50 to 60 drivers that I’m handling. I can’t be available for everyone at every single time to answer those calls.”

“I’ve listened to some of these conversations that driver leaders have with their drivers. A lot of it is, they’re literally psychologists,” Ramirez said. “A lot of these conversations are not freight-related. They’re 30-minute conversations about their family, their pay, ‘I need more miles.’ Those are the conversations we want our driver leaders having with their drivers because that’s how you retain more drivers.”

The longer-term vision goes beyond answering questions after the fact. Abbott described a model where the agent anticipates a delay and reschedules an appointment before a customer ever has to ask where a load is.

“What would be cool is that before the email comes from the customer, we reach out to the customer or the facility and say, ‘Hey, this driver is running late. I’m rescheduling the appointment. It’s done,'” Abbott said. “It’s sort of anticipating exceptions and actually being proactive about it versus today, in all our use cases for AI it’s very reactive.”

That kind of proactive rescheduling helps both sides of the load, he said, since a warehouse that knows a truck is running late can reallocate the labor it had lined up to unload it.

“Driver retention is a big thing for everyone,” Ramirez said. “I can’t wait to get to that use case.”

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They Watched the Family Business Get Rolled Up. Then They Built the Version They Wanted to Work For.

Adam Wingfield — Fri, 31 Jul 2026 00:55:08 +0000

A Business That Did Not Exist Yet

In 1997, if a fleet needed a repair, the truck went to a shop. That was the entire menu.

That was the year Bob Dickinson started what became Dickinson Fleet Services out of a small operation in Indianapolis, and his grandsons Kyle and Kevin Coltrain grew up around it. Their father, Ted Coltrain, and their uncle, Mike Dickinson, ran the company as it scaled. The brothers were in the shop on weekends before either of them had a title.

The early product was narrow because the market had no idea what to ask for. As Kevin Coltrain described it on The Long Haul, mobile maintenance in the early 2000s meant oil changes, preventive maintenance and minor repairs, and most of the job was explaining to customers what mobile maintenance even was.

Both brothers went to work in the family business after college. Kyle, a wide receiver at the University of Central Florida who thought he was headed into coaching, went into field sales in Tampa during the years when the pitch still required starting from scratch. Kevin managed regional operations across multiple markets.

Then they watched what happened to it.

The Roll-Up They Lived Through

Dickinson Fleet Services took on Ridgemont Equity Partners as majority shareholder, and in an acquisition announced January 5, 2021, Cox Automotive bought the company outright, folding it into its Pivet fleet services platform. At the time of that deal, Dickinson operated more than 700 mobile repair units and employed roughly 800 technicians. Under Cox the business grew past 1,500 technicians serving more than 14,000 clients annually and was rebranded as Fleet Services by Cox Automotive. In early 2025, Cox acquired the remaining minority stake held by Mike Dickinson and Ted Coltrain.

Kyle’s account of that arc is notably measured. He describes going from a small family owned business to a private equity backed company to a subsidiary of a large corporation, and says there was good and bad in all of it. He is not claiming the buyers were villains. His argument is narrower and harder to dismiss.

When large capital arrives, it comes with goals and agendas and timelines. Those timelines get translated into quotas. And the quota that concerned him most was the technician headcount target, because in his telling, a manager carrying a mandate to add ten technicians in a month will hire someone off a phone screen who says he can turn a wrench.

That risk is specific to this line of work. A mobile technician is alone. Kyle put it plainly: a tech in the field does not have a buddy in the next shop bay to ask for help, and is often working nights, early mornings and weekends. A shop can absorb a marginal hire because someone more experienced is standing nearby. A mobile operation cannot.

The second pressure runs the same direction. Push a technician to finish a four-hour job in two, Kevin said, and things get missed. Not because anyone set out to do poor work. Because the clock was set wrong.

The brothers launched Coltrain Onsite Fleet Care in August 2025 with seven states of coverage. Kyle told the podcast the company now runs about 70 mobile technicians across 15 states, largely east of the Mississippi plus Texas.

What a Mobile Unit Can Actually Do in 2026

Most small carriers are working from an outdated picture, and the gap costs them money.

Coltrain’s units are equipped with the Miller Trailblazer 330 Air Pak, a combination welder, generator and compressor. That single piece of equipment changes the conversation. It means welding and trailer body work happen in the yard, which Kyle described as close to unheard of in a mobile environment and something that surprises most of the people he sits down with.

The company’s own materials put the figure at 95 percent of routine repairs and maintenance handled on site. In the episode, the brothers filled in what that covers: engine diagnostics through a direct plug into the truck, after-treatment work including DEF system sensors and diesel particulate filter replacement, brake jobs down to shoes, drums and chambers, air conditioning, lighting, and bolt-on components including starters, alternators and radiators.

The remaining 5 percent is defined by two things, and Kevin was direct about both. Internal engine work means opening the engine, and an open engine in an outdoor environment invites contamination. Pulling a motor introduces a safety exposure for a technician working without a shop’s lifting infrastructure. Catastrophic body and accident damage goes to a body shop for paint. Those jobs leave the yard because quality and safety say so, not because the truck cannot carry the tools.

Knowing that line before you need it is the operational point. A carrier who understands what can be handled in the yard stops treating every fault code as a tow decision.

The Hours Are the Product

The most useful reframe in the conversation was about scheduling, not wrenching.

Kyle said that when a prospect asks what hours his mobile units operate, his answer is a question: what hours is your fleet not running? Coltrain’s technicians work early mornings, nights and weekends by design, because that is when the asset is idle anyway.

That is where the cost comparison most small carriers run goes wrong. Kyle’s claim is that mobile rates run roughly on par with a quality shop, and that the real gap opens against quick-lube operations doing a five-point inspection and an oil change, where the savings are front-loaded and the bill arrives later.

The costs that never make it onto the comparison are the ones that matter. A shop keeps business hours, so the truck is down during revenue hours. Somebody drives the unit to the shop and back, on the clock, or sits in a waiting room, or a second driver goes to retrieve the first. None of that appears on the invoice.

Kyle’s summary is the line worth writing down: planned downtime is easier to manage and more cost effective than unplanned downtime. When a truck breaks down, the carrier is paying a driver sitting on the shoulder while a load misses its appointment.

Kevin’s observation is that most fleets never calculate this, though they feel it. The common workaround is buying spare units, which is a real answer that carries its own cost of ownership. Tightening the maintenance program is the cheaper version of the same insurance.

Billing for Work That Was Never Done

The uncomfortable part of the conversation was about invoices for inspections that did not happen.

Kevin framed it as a structural feature of mobile work rather than a character problem. Nobody is standing over the technician’s shoulder. Kyle went further and said he does not believe anyone sets out to do a poor job, and that the failure is a pressure problem: told to complete a trailer inspection in ten minutes, a technician does a fast walk-around, applies a pass sticker and moves on.

Coltrain’s answer is a proprietary field service application that date and time stamps every individual inspection point rather than the sheet as a whole, with required photo prompts at each point. That produces two things. The customer gets photographic evidence of every item. And the company gets a timing record it can audit, so an inspection point that should take a good technician 20 minutes and instead took two gets flagged for a manager conversation and a quality check.

For a carrier evaluating any provider, the takeaway is not the specific software. It is that the technology to verify this work exists now, which means a provider who cannot produce point-level documentation is making a choice.

How to Vet a Provider Before You Need One

Asked what a small carrier should look for in any mobile provider, not just his own, Kyle offered questions that cost nothing to ask.

Request copies of technician certifications. Brake certifications, DOT inspector certifications. Kyle said he welcomes that request and that a provider who balks at it, or does not have the records on file, has told you something.

Then ask the local manager how many technicians he supervises. Coltrain caps its mobile service managers at 10 to 15 technicians. Kyle said he has seen ratios of 40 to 1 across three states and does not understand how a manager at that load can lay eyes on the work, know the customers or understand their problems. Ask how often that manager sees his technicians in the field, where he is based, and how to reach him directly. If the answer is a call center number, that is a legitimate model that some fleets prefer, but the carrier should know which one he is buying.

The Documentation Exposure Most Carriers Miss

There is a compliance argument sitting underneath all of this, and it is the piece most likely to bite a small operator.

Kyle noted that the Department of Transportation can audit a carrier’s DOT inspections and request copies of the certifications held by the technician who performed them. A carrier who collected those records at the start of the relationship has them. A carrier who did not is calling a vendor mid-audit.

His second point concerns what carriers do with a passing inspection. A unit can pass and still carry write-ups, brake pads flagged as wearing, items noted for attention before the next service. Kyle’s observation is that carriers see the pass, file the sheet and move on. He put it bluntly: do not wait for that part to fail.

Kevin added that Coltrain retains preventive maintenance sheets, DOT documents and repair records on its own side, and that carriers do call asking for a copy of a last inspection they have misplaced. For a two-truck operation without a maintenance manager, that recordkeeping is part of what is being purchased.

Where the Argument Actually Lands

Asked when a small carrier should stop doing its own maintenance, Kyle declined the framing about return on investment.

His answer moved to the road. He described a wheel-off event or an accident, and the fact that his own family drives next to these vehicles. Coltrain’s internal mantra is “defend the road.” The brothers’ shared framing is that a loaded tractor-trailer at 70 miles an hour is not a cost center to be optimized down to the last dollar.

Deferred maintenance is the first thing to go when money is tight. That is exactly when the math is least forgiving.

Why It Matters

The failures the Coltrains describe are not caused by bad technicians, they are caused by clocks set too short and hiring quotas set too high, which means a carrier evaluating a maintenance provider is really evaluating whether that provider’s growth model leaves time to do the work. The questions that surface it are free to ask and take ten minutes: how many technicians does the local manager carry, can I see your certifications, and can you show me point-level proof the inspection happened.

The post They Watched the Family Business Get Rolled Up. Then They Built the Version They Wanted to Work For. appeared first on FreightWaves.

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