Business Archives

C.H. Robinson names Rajan as chief strategy and innovation officer

Dana Guthrie - June 24, 2024

EDEN PRAIRIE, Minn. — In a pivotal move, global logistics leader C.H. Robinson Worldwide, Inc. has announced that Arun Rajun, who is COO, will transition into the role of chief strategy and innovation officer, effective immediately. “Innovation is at the heart of Robinson’s competitive differentiation, and I am excited to serve in this role and help ensure that we deliver industry-leading ideas, solutions and expertise while remaining relentlessly focused on continuous improvement,” Rajan said. ”The strategy process is not static. It requires diligent monitoring of internal execution and capabilities and the constantly evolving external landscape to take advantage of opportunities. This organizational evolution is the start of something really powerful for the future of Robinson and the industry.” Rajan’s focus will be to drive strategy and foster innovation across the company while also working closely with the Chief Financial Officer to deliver near-term and long-term enterprise strategic planning, development, and deployment across C.H. Robinson. “With a single-threaded leader at the helm of strategy and innovation, we are doubling down on efforts already underway to bring industry-leading products, technology, solutions, and ways of working to the global logistics marketplace,” said Dave Bozeman, President and CEO of C.H. Robinson. “This new role is a testament to C.H. Robinson’s unwavering commitment to innovation, discipline and profitable growth, and we are confident it will help enable strategic outcomes to better serve our customers and carriers.” In partnership with the senior leadership team, the Rajun will help drive long-term, sustainable and profitable growth by maximizing the strategic opportunities of Robinson’s leadership position in the industry in support of our customers, carriers and employees. Rajun will lead the strategy process and operating mechanisms to track progress and implementation of strategic initiatives against objectives as well as lead research and analysis to inform major company decisions related to portfolio, mergers and acquisitions and organizational transformation. According to a statement released by C.H. Robinson, the transition marks a critical point in the company’s journey as it continues to drive operational excellence and strategic vision to become fit, fast and focused. As C.H. Robinson implements its new operating model that is infusing tighter accountability, discipline and collaboration across divisions as One Robinson, it is ready for a chief strategy and innovation officer to help advance the operating model while enabling strategic outcomes at an even faster rate. The position of COO will not be backfilled. “The COO role has been instrumental in laying the foundation for Robinson’s success, driving tight alignment between business teams and digital investments, and delivering measurable value toward business growth and productivity improvements,” Bozeman said. “This evolution underscores the effectiveness of the company’s collective efforts, and the logical next step is to transition some of these digitally-oriented operating structures into the core operation and turn Arun’s focus to accelerating strategy and innovation to drive the company and the industry forward.”

UPS offloads Coyote Logistics to RXO for just over $1B

Bruce Guthrie - June 24, 2024

According to a release issued on Monday, June 24, RXO has entered into a definitive agreement to acquire Coyote Logistics, an asset-light freight brokerage business, for $1.025 billion from UPS. RXO states the acquisition will enhance RXO’s market position, diversify and expand its customer base, and broaden its carrier network. At closing, RXO will be the third-largest provider of brokered transportation in North America. UPS announced the transaction on Monday morning as well. “As UPS positions itself to become the premium small package provider and logistics partner in the world, the decision to sell our Coyote Logistics business allows an even greater focus on our core business,” said UPS Chief Executive Officer Carol B. Tomé. Based in Chicago, Coyote Logistics is a leading global third-party logistics (3PL) provider, working with 100,000 network carriers and managing 10,000 loads per day. “RXO’s highly accretive acquisition of Coyote will immediately increase the scale of our brokerage business, providing customers with more capacity across a wider array of power lanes,” said Drew Wilkerson, chief executive officer of RXO. “RXO will realize significant synergies from the acquisition by quickly integrating Coyote’s business into RXO and leveraging our cutting-edge technology. The addition of Coyote’s customer base will diversify RXO’s vertical mix and will increase the number of customers that do more than $1 million in business with us by approximately 80%. This acquisition will provide RXO with both immediate and long-term opportunities for revenue and earnings growth and will generate significant returns for shareholders. I look forward to welcoming Coyote’s employees to our team and working together to achieve excellent results for our customers, shareholders, carrier partners and employees for years to come.” The transaction is expected to be immediately and significantly accretive to RXO’s adjusted diluted earnings per share and adjusted free cash flow. Under the terms of the agreement, RXO will pay $1.025 billion in cash for Coyote. RXO will continue to serve UPS’s brokered transportation needs under a contract that runs through January 2030. The acquired business generated approximately $3.2 billion in revenue in 2023 with approximately $470 million in gross margin and approximately $86 million of adjusted EBITDA. RXO expects annualized cost synergies of at least $25 million. The transaction is expected to close by the end of the year, subject to regulatory review and approval. Upon completion of the transaction, the company will update its financial outlook.

NFI CEO among 6 indicted by New Jersey Attorney General

Bruce Guthrie - June 24, 2024

TRENTON, N.J. — In a case that has been tabbed as exposing a criminal enterprise going back more than 10 years, NFI CEO Sidney Brown has been included in an indictment aimed primarily at a key political figure in the state of New Jersey. On Monday, June 17, Attorney General Matthew J. Platkin and the Office of Public Integrity and Accountability (OPIA) announced the filing of criminal charges against six defendants including Brown following what he called “a years-long investigation into a criminal enterprise.” In a press release announcing the charges, Platkin says the enterprise was run by George E. Norcross III and his associates in South Jersey and elsewhere, based on an investigation conducted by the OPIA, the FBI and the New Jersey State Police. The 13-count indictment alleges that “through a series of unlawful acts, the Norcross Enterprise obtained property and property rights on the Camden Waterfront for itself and others, collected millions of dollars in government-issued tax credits, and controlled and influenced government officials to further the interests of the enterprise.” The Attorney General alleges that from as early as 2012 through the present, the Norcross Enterprise used its power and influence over government officials to craft legislation tailored to serve the interests of the enterprise, and with the cooperation of then-Camden Mayor Dana Redd and other officials, used parts of the city’s government to aid the enterprise in acquiring property and property rights for itself and others through coercion, extortion, and other criminal acts. All six of the defendants are charged with first-degree racketeering They include: • George E. Norcross, III, 68, of Palm Beach, Florida, Executive Chairman of the insurance firm Conner, Strong & Buckelew and chairman of the board of trustees for Cooper Health. • Philip A. Norcross, 61, of Philadelphia, Pennsylvania, Attorney and Managing Shareholder and CEO of Parker McCay, a New Jersey law firm. Philip Norcross also serves on the board of Cooper Health and is the registered agent for the groups that own buildings in Camden that are the subject of the criminal allegations. • William M. Tambussi, 66, of Brigantine, New Jersey, Attorney and partner at the law firm of Brown and Connery. He is the long-time personal attorney to George Norcross. Since 1989, he also served as counsel to the Camden County Democratic Committee – which George Norcross chaired from 1989 to 1995. Tambussi has also served as outside counsel to the City of Camden, the Camden Redevelopment Agency, Cooper Health, and Conner Strong. • Dana L. Redd, 56, of Sicklerville, New Jersey, current CEO of Camden Community Partnership, which was formerly Cooper’s Ferry Partnership. She previously served as a member of the Camden City Council, the New Jersey Senate, and from 2010 to 2018 was the Mayor of Camden, and she is alleged to have abused that position to benefit herself and the Norcross Enterprise. • Sidney R. Brown, 67, of Philadelphia, Pennsylvania, CEO of NFI, a trucking and logistics company. He also serves as a member of the board at Cooper Health, and is a partner in the groups that own several of the Camden buildings at the center of the allegations. • John J. O’Donnell, 61, of Newtown, Pennsylvania, has been in the executive leadership of The Michaels Organization, a residential development company, in a variety of roles including COO, President, and CEO. He is also a partner in the groups that own several of the Camden buildings at the center of the allegations. He has also served on the Board of Cooper’s Ferry Partnership at various times since 2018. The release from Platkin states the defendants are also charged with various counts of financial facilitation, misconduct by a corporate official, and official misconduct and conspiring to commit theft by extortion, criminal coercion, financial facilitation, misconduct by a corporate official and official misconduct. “The indictment unsealed (on June 17) alleges that George Norcross has been running a criminal enterprise in this state for at least the last 12 years,” Platkin said. “On full display in this indictment is how a group of unelected, private businessmen used their power and influence to get government to aid their criminal enterprise and further its interests. The alleged conduct of the Norcross Enterprise has caused great harm to individuals, businesses, non-profits, the people of the State of New Jersey, and especially the City of Camden and its residents. That stops today. We must never accept politics and government — that is funded with tax dollars — to be weaponized against the people it serves. Today we reaffirm that no one in our state is above the law — period.” The release clarified the magnitude of the charges stating that all of the offenses alleged in the 111-page indictment are violations of the first and second degrees. First-degree charges carry a sentence of 10 to 20 years in state prison and a fine of up to $200,000. The crime of first-degree racketeering is subject to the No Early Release Act, and thus carries a mandatory 85% parole disqualifier. The Attorney General’s office also clarified that racketeering convictions also exposes criminal defendants to the potential for additional financial penalties – including the forfeiture of ill-gotten proceeds from their criminal activity. Platkin said in his statement, that the state intends to seek such forfeitures. Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000. The offense of official misconduct carries a mandatory minimum term of imprisonment of five years for public officials convicted of that offense related to their office. Where Brown fits into the equation is as of a property owner on the parcel in question, and is not mentioned in Platkin’s statement by name other than as one of the six defendants listed. However in the indictment, Brown is included in the membership of what is called the Camden Partners along with O’Donnell and George Norcross III, represented legally by Tambussi. According to an Associated Press report, among the allegations against Norcross are charges that he threatened a developer who would not relinquish his rights to waterfront property in Camden, New Jersey, on Norcross’ terms. The indictment cites a profanity-laden phone recording of Norcross in which he tells the developer he will face “enormous consequences.” The person asks if Norcross is threatening him, according to the indictment. “Absolutely,” Norcross replies. The indictment also said Norcross and the co-defendants including Brown extorted and coerced businesses with property rights on Camden’s waterfront and obtained tax incentive credits, which they then sold for millions of dollars. Platkin described Camden as long suffering from economic decline. NFI is located at TRIAD1828 Centre, 2 Cooper Street in Camden, New Jersey, which is at the heart of the property involved in the indictment and the center of the extortion allegations. Platkin held a press conference when the indictment was unsealed in which George Norcross III sat on the front row and called Platkin a “coward” and demanded a speedy trial according to the AP report. The group is scheduled to be arraigned July 9 at 10 a.m. Messages seeking comment from NFI remained unanswered at the time of publication. The Associated Press contributed to this report.

Strong US Class 8 sales for May reflect atypical pattern for freight market

Cliff Abbott - June 24, 2024

U.S. sales of new Class 8 trucks in May were a virtual repeat of April results. Manufacturers reported sales of 19,764, just 34 trucks fewer than in April, for a decline of 0.2%, according to data received from Wards Intelligence. The long-expected downturn in sales continues to stubbornly defy expectations. Low freight rates tend to result in a subdued new truck market as carriers downsize or go out of business. The resulting smaller number of available trucks typically prompts higher freight rates as shippers compete for trucks to haul their product. This time, however, the cycle isn’t “typical.” Tim Denoyer, vice president and senior analyst at industry forecaster ACT Research, explained why. “The record number of operating authority revocations over the past 18 months shows considerable capacity contraction,” he said in a June 18 blog posting. “But we think the ongoing capacity expansion by private fleets is outweighing the capacity contraction.” There’s also another factor, Denoyer says. “Elevated equipment demand as fleets gear up for EPA’27 is a key factor likely to drag overcapacity on further,” he said. While carriers are still buying trucks, they’re placing orders for more. FTR Transportation Intelligence reported May preliminary Class 8 orders for North America at 18,900 units, up 25% from April and up 37% from May 2023 order numbers. “Despite the trend of stagnant freight markets, fleets remain willing to invest in new equipment,” wrote Dan Moyer, FTR’s senior analyst for commercial vehicles, in a monthly blog post. ACT Research reported final May Class 8 orders at 23,560 units, up 51% from May a year ago. Kenny Vieth, ACT president and senior analyst, says much of that order activity is going to build inventories rather than being delivered to customers. “Given the build was 6,900 units above retail sales in April and May, inventories should have risen,” he explained. Trailer Sales May 2024 On an adjusted basis, Vieth calculated that “inventories have risen by more than 22,000 truck in the past nine months, reaching levels not seen since 2019.” While May truck orders were rising, orders for new trailers were down 46% from May 2023 at 6,100 units. The largest decline, by trailer type, was dry van, which fell 85%. Unlike truck sales, trailer sales do not benefit from the EPA’27 pre-buy and are more likely to reflect the freight market as a whole. Rather than buying new trailers, many carriers are choosing to invest in tractors, allowing trailer inventories to remain stagnant until rates improve. Used Class 8 Sales May 2024 On the used Class 8 market, sales volumes were up again in May, according to ACT Research. May sales were 7% higher than April and were 30% higher than in May 2023. As carriers downsize or go out of business, those trucks end up on the used truck market, joining the units being traded in by carriers who are upgrading their fleets. The good news for buyers is this: Increased availability of used equipment has brought prices down. Compared with May 2023, the average used Class 8 truck on the market costs 12% less, has 3% fewer miles and is 6% younger. Insurance, Interest Rates Rising Two issues that undoubtedly will impact the sale of new trucks are interest rates and the cost of commercial auto liability insurance. The current Federal Discount Rate for banks to borrow money is 5.5%. Depending on creditworthiness and other factors, used truck buyers can expect to pay higher interest rates and will face tighter loan restrictions. Larger down payments may be required by some lenders, too. Avery Vise, vice president of commercial vehicles for FTR, used the Producer Price Index (PPI) from the U.S. Census Bureau to explain what’s happening. “The PPI for commercial auto insurance premiums was up 3% year over year in May,” he said in a June 17 podcast. “That matches the comparison in December of 2019 and is the highest since June of 2019. And 2019 is an interesting comparison because that is a year many of you will remember that we lost a lot of trucking operations, due principally to insurance costs going up.” While insurance rates are rising, the increase may push more small carriers into closure, decreasing available capacity and prompting freight rate increases. OEM Sales Freightliner led the way in May with U.S. sales of 6,800 Class 8 trucks in May, up 4.9% from April but about 27.4% behind sales in May 2023. For the year to date, Freightliner Class 8 sales are down 20.7% from last year’s pace, while the market as a whole is down 14.6%. Volvo sales of 2,334 represented a gain of 14.6% over April and were down just 5.5% from May of last year, outperforming the market. YTD Volvo sales are down 10.4% from last year’s pace. Volvo-owned Mack reported sales of 1,613 in May, up 5% from April sales and up 2.6% from May 2023. YTD, Mack sales are down 9.4%. International sales of 1,911 were down 1.4% from April but were 40.9% lower than an excellent May 2023. For the year to date, International sales are down 39.5%, the largest decline of the major manufacturers. Kenworth reported sales of 2,876, down 19.7% from April and down 10.1% from May 2023. Year to date, however, Kenworth is outperforming the Class 8 market as a whole with a sales decline of just 2.2%. Peterbilt has reported similar numbers with May sales of 3,266, down 1.6% from April and down 6.7% from May 2023. YTD Peterbilt sales are just 1.4% down from the same point in 2023. Western Star has stepped up production and sales this year. May sales of 935 were up 5.2% from April and were up 26.9% from May 2023. For the year-to-date, the company has seen sales rise by 47.8%. Hino, mostly known for its Classes 5-7 commercial vehicles, reported sales of 29 Class 8 tractors in May. Representing a tiny portion of the Class 8 market, Hino Class 8 tractors are mostly suited for local and regional runs rather than over the road applications. Continued robust sales of Class 8 trucks are delaying the capacity reduction necessary to start pushing freight rates upward, a situation that isn’t likely to change soon.

ACT Research: May Class 8 net orders unseasonally high

John Worthen - June 21, 2024

COLUMBUS, Ind. — Some of the recent Class 8 order strength is likely due to a small amount of pre-buying, but overall, May’s orders are likely anomalous, as the industry is in the weakest period of the year for orders, according to the latest report from ACT Research. Final North American Class 8 net orders totaled an unseasonally high 23,560 units in May (29,2000 seasonally adjusted), up 51% year-over-year. Total Classes 5-7 orders fell 4.9% year-over-year to 19,306 units (20,900 seasonally adjusted). “U.S. Class 8 tractor orders rose 51% year-over-year in May, and vocational truck orders increased 48% year-over-year,” according to Kenny Vieth, ACT’s president and senior analyst. “Again, these increases are largely untethered from current market conditions, and we expect next month’s orders to be more representative of the current market.” Regarding inventories, Vieth said that between strong production and softening U.S. tractor sales over the past eight months, Class 8 inventories have risen quickly. “The reported inventory decrease from March to May is attributed to a fire that broke out at a supplier plant, requiring OEMs to red tag units,” he noted. “Given build was 6,900 units above retail sales in April and May, inventories should have risen, rather than fallen the past two months. On that adjusted basis, Class 8 inventories have risen over 22,000 units the past nine months, reaching levels not seen since August 2019.” Meanwhile, Class 8 cancellations increased in May to 2,623 units and 1.8% of the backlog on a nominal basis. Seasonally adjusted, cancellations were 3,394 units and 2.3% of the backlog, above the long-term average of 2% for the first time in two years.

HDA Truck Pride partners with TreviPay

Bruce Guthrie - June 20, 2024

HAZELWOOD, Mo. — HDA Truck Pride, an independent provider of parts and services to the commercial vehicle aftermarket, and TreviPay, a business-to-business payments and invoicing network, have partnered in the new FUSE National Account Program. According to a news release, FUSE represents a national fleet program designed to seamlessly connect small to mid-sized fleets with an extensive network of more than 900 premier HDA Truck Pride parts and service providers across North America. TreviPay will enable service providers in the FUSE program the ability to offer invoicing and commercial payment terms to the fleets they serve. “HDA Truck Pride is dedicated to offering cutting-edge resources and initiatives to elevate the commercial vehicle industry,” said Curt Westphal, director of program development–end user at HDA Truck Pride. In a recent TreviPay study of 300 global business buyers, inefficient processes and incorrect invoices were identified as areas where B2B sellers are falling short. “This is a direct reflection of manual back-office systems, which can easily miss negotiated pricing or invoice scheduling agreements,” according to the news release. Through TreviPay, fleets getting serviced within the FUSE program at participating service providers can expect consolidated, online invoicing and payment options through a dedicated line of credit (payment terms of 30 days). Fleets can also take advantage of fast onboarding, Accounts Payable integration and customized purchase controls. “Today’s business buyers are increasingly looking for seamless payment experiences that are convenient, accurate and fast — and this includes heavy-duty trucking fleets,” said Brandon Spear, CEO of TreviPay. “TreviPay’s tailored program for the HDA Truck Pride network will connect service providers and fleets with the streamlined onboarding, invoicing and reporting capabilities, which will add value through the order-to-cash process.” According to the release, by partnering with TreviPay for payments and invoicing solutions, participating HDA Truck Pride service providers will be able to offer commercial payment (or net) terms to expand and cement loyalty among the market of fleets each serves. In addition to a 90% improvement in invoice accuracy in the FUSE program, service providers can experience seamless, easy-to-process billing, increased average order sizes and the ability to extend net terms without taking on a credit risk. TreviPay guarantees payment and manages collections through the program to help reduce Days Sales Outstanding. “Having observed TreviPay’s significant influence within our industry over the years, we are thrilled to collaborate with them to integrate their payment technology and invoicing solutions into our network.” Westphal continued, “The FUSE national accounts program fortifies our network’s competitive edge and market expansion and elevates the convenience and value proposition for our fleet customers. It’s a win-win partnership for all involved.”

NMFTA set to host 3rd CyberTruck Challenge

The Trucker News Staff - June 20, 2024

ALEXANDRIA, Va. — The National Motor Freight Traffic Association (NMFTA) will once again serve as the lead sponsor for the CyberTruck Challenge. This year marks the third year that NMFTA has served in this sponsorship role, according to a news release. During the five-day event, college students from the U.S. and Canada learn about cybersecurity challenges through hands-on instruction and take advantage of career-related opportunities. This year’s event is set to take place June 24-28 in Warren, Michigan. “The CyberTruck Challenge provides an opportunity for industry professionals and interested students to learn more about heavy-vehicle cybersecurity,” said Debbie Sparks, executive director for NMFTA. “It is an experience that covers various disciplines and organizations within the supply chain, providing awareness, expert influence, and academic training directly by accomplished dedicated leaders. NMFTA always looks forward to this event as it gives us the chance to positively influence the next generation of leaders while equipping them with all the tools and resources needed to excel in this space.” As the lead sponsor, NMFTA will cover airfare, lodging, and meals for all attending students. Additionally, Ben Gardiner, senior cybersecurity research engineer for NMFTA, will teach a session, “Vehicle Hacking 2,” during the instructional part of the challenge. The CyberTruck Challenge’s mission has two primary objectives: Develop the necessary talent that can come into the industry and address the existing cybersecurity challenges facing transportation and trucking Build a community interested in continuously collaborating to address and solve these challenges “As the industry leader in heavy-vehicle cybersecurity research, with various experts on staff, it’s our priority at NMFTA to dedicate both our time and knowledge to the next generation of professionals,” added Sparks. “We’re proud to sponsor the CyberTruck Challenge as this event does just that.” To learn more about NMFTA’s mission, advocacy, services, resources, and industry conferences, visit www.nmfta.org.

Love’s adds 89 truck parking spots with new Missouri location

John Worthen - June 20, 2024

OKLAHOMA CITY — Love’s Travel Stops’ newest location in Sarcoxie, Missouri, along Interstate 44 features 89 truck parking spots. The 24/7 location also offers all the amenities Love’s is known for, including fresh food and drinks, Love’s branded snacks and an Arby’s. In honor of the grand opening, Love’s will split a $5,000 donation between the Sarcoxie Public Library and Sarcoxie Police Department.

EY honors Bestpass-Fleetworthy CEO

Bruce Guthrie - June 20, 2024

NEW YORK, N.Y. – An honor was bestowed upon Tom Fogarty by a group of his peers this week. According to a release issued by Ernst & Young LLP, the partnership recently announced that Fogarty, CEO of Bestpass-Fleetworthy Solutions, was named an Entrepreneur Of The Year® 2024 New York Award winner. The award program recognizes the ambitious leaders of high-growth companies who are creating a more equitable, sustainable, and prosperous world for future generations. Fogarty was selected by an independent judging panel made up of previous award winners, leading CEOs, and other business leaders. The candidates were evaluated based on their demonstration of building long-term value through entrepreneurial spirit, purpose, growth and impact, among other core contributions and attributes.  “It’s truly an honor to be recognized by EY as a 2024 New York Entrepreneur Of The Year Award winner,” said Tom Fogarty. “This award is a testament to the hard work, innovation, and incredible teamwork that is driving our company forward. This honor would not be possible without the support of the entire Bestpass-Fleetworthy Solutions team. Our company’s mission is to bring new solutions to help make our roads safer and commercial fleets more efficient. We will do just that as we continue to grow the overall business.” Bestpass, founded in 2001 in Albany, New York, is a pioneer in toll management solutions for commercial fleets. In 2023, the company acquired Fleetworthy Solutions, a fleet safety and regulatory compliance service provider, to expand its offerings beyond toll management. The combined company is now Bestpass-Fleetworthy Solutions. As a regional award winner, Fogarty will now be considered for the Entrepreneur Of The Year 2024 National Awards, which will be presented in November at the annual Strategic Growth Forum®, one of the nation’s most prestigious gatherings of high-growth, market-leading companies.

US trailer demand under growing pressure, ACT reports

John Worthen - June 20, 2024

COLUMBUS, Ind. — May’s net trailer orders totaled 6,100 units, about 46% lower year-over-year, and 7,650 units below April’s intake. This is according to ACT Research’s latest State of the Industry: U.S. Trailers report. May’s tally brings the year-to-date net order activity to 68,200 units, 25% lower than the first five months of 2023, with its faster paced order environment, pent-up demand and moderately congested supply chain, ACT reports. “Seasonally adjusted (SA), May’s orders were nearly 7,200 units compared to a 17,300 SA rate in April,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research. “On that basis, orders decreased 59% month-over-month. Dry van orders contracted 85% year-over-year, while reefers, albeit at low volumes, were still an improvement from last May’s negative net order tally. Flats were 37% lower compared to May 2023.” McNealy added that total cancellations again oscillated to the higher side of the pendulum’s arc in May. “The cancellation rate rose to 3.2% of the backlog, from April’s 1.5% rate,” she noted. “Eight of 10 markets remained at or above the 1% mark, with OEMs indicating cancellations from multiple fleets and dealers.” McNealy said that this capex constrained environment, and with an expensive EPA mandate landing in 2027, fleet willingness to spend on trailers is under growing pressure. “Coupling these factors and overstocked dealer inventories that are proving harder to move and the absence of a need for carriers to boost trailer-tractor ratios in the short-term, as capacity remains plentiful and spot market volumes and rates remain under pressure from private fleet capacity expansions, and it adds up to a challenging part of the cycle for the US trailer industry,” she said.

Waabi rakes in $200M to launch fully driverless semis in 2025

John Worthen - June 19, 2024

TORONTO — Artificial intelligence (AI) transportation company Waabi has raised $200 million to help fund its goal of deploying fully autonomous Class 8 rigs on America’s highways in 2025. According to a news release, the fundraising effort was led by by Uber and Khosla Ventures. “The funding round includes participation from best-in-class strategic investors NVIDIA, Volvo Group Venture Capital, Porsche Automobil Holding SE, Scania Invest and Ingka Investments,” the news release notes. Additional financial investors include HarbourVest Partners, G2 Venture Partners, BDC Capital’s Thrive Venture Fund, Export Development Canada, Radical Ventures, Incharge Capital and others. The new funding brings the total investment in Waabi to more than $280 million. In addition to funding the autonomous rigs’ creation, Waabi’s new capital will also be used to grow the company’s commercial operations and expand its team in both Canada and the United States. The funding builds on recent momentum for Waabi, including the opening of its new Texas AV trucking terminal, a collaboration with NVIDIA, to integrate NVIDIA DRIVE Thor into the Waabi Driver. Waabi also maintains an ongoing partnership with Uber Freight, running autonomous shipments for Fortune 500 companies and top tier shippers in Texas. “Only three years on from the company’s inception, Waabi is on the verge of reaching Level 4 autonomy,” according to the news release. “This industry-leading pace and capital efficiency is made possible through the company’s revolutionary approach to unleashing generative AI in the physical world.” Level 4 is considered “high automation” by the National Highway Traffic Safety Administration. When engaged, a Level 4 autonomous system is fully High responsible for driving tasks. When engaged, a human driver is not needed to operate the vehicle. “Waabi has pioneered a single end-to-end AI system that is capable of human-like reasoning, enabling it to generalize to any situation that might happen on the road, including those it has never seen before,” the news release states. “Because it is able to reason, the system requires significantly less training data and compute resources compared to other end-to-end approaches.” Waabi’s system is also fully interpretable, and its safety can be validated and verified, company officials say. “I have spent most of my professional life dedicated to inventing new AI technologies that can deliver on the enormous potential of AI in the physical world in a provably safe and scalable way,” said Raquel Urtasun, founder and CEO of Waabi. “Over the past three years, alongside the incredible team at Waabi, I have had the chance to turn these breakthroughs into a revolutionary product that has far surpassed my expectations. We have everything we need — breakthrough technology, an incredible team, and pioneering partners and investors — to launch fully driverless autonomous trucks in 2025. This is monumental for the industry and truly marks the beginning of the next frontier for AI.” Dara Khosrowshahi, CEO of Uber, said his company believes in the potential of autonomous vehicles. He said that they can “revolutionize transportation, making a safer and more sustainable future possible.” “Raquel is a visionary in the field and, under her leadership, Waabi’s AI-first approach provides a solution that is extremely exciting in both its scalability and capital efficiency,” Khosrowshahi added.

PayCargo awarded $16M in trademark infrigement case against CargoSprint

John Worthen - June 19, 2024

CORAL GABLES, Fla. — Logistics payments and data infrastructure platform PayCargo has won its trademark infringement and breach of contract lawsuit against CargoSprint and its founder/CEO Joshua Wolf, following an appeal. PayCargo was awarded and collected a total of $16,395,683.90, inclusive of damages, attorneys’ fees, prejudgment interest and costs, according to a news release. The judge in the United States District Court of Florida had earlier issued her findings of facts and conclusions of law on Sept. 30, 2022, holding CargoSprint liable for “willful, pervasive and relentless” infringement of PayCargo’s federal trademarks and breach of contract. On Dec. 15, 2022, the court entered a permanent injunction against CargoSprint, enjoining them from using the PayAirCargo name in commerce, social media and other contexts. A day later, the court entered final judgment against CargoSprint, awarding PayCargo $15,191,277.50, comprised of $11,591,277.50 in damages, $3,531,630.00 in attorneys’ fees and prejudgment interest and $68,370.00 in costs, the news release notes. During the trial, the federal district court twice found CargoSprint in contempt of court, once for submitting fabricated financial records to the court. CargoSprint appealed PayCargo’s victory at trial to the Eleventh Circuit U.S. Court of Appeals. In April 2024, a three-judge panel of the Eleventh Circuit U.S. Court of Appeals unanimously affirmed the trial court’s decision. CargoSprint elected not to further appeal the appellate court’s decision, thus definitively concluding the matter in PayCargo’s favor. On May 28, 2024, CargoSprint paid PayCargo $16,395,683.90 in satisfaction of the judgment. In 2016, PayCargo reached a settlement agreement with Wolf and his company PayAirCargo to cease commercial use of the name and change it to CargoSprint. In 2019, PayCargo filed its federal civil suit because the defendants continued to use the confusingly similar PayAirCargo name. In finding that Wolf and CargoSprint infringed on PayCargo’s trademarks and breached the agreement, the court explained: “Customers and vendors alike expressed confusion over whether the two competitors were a single entity.” “We’re extremely gratified with the court’s decision,” said Mitchell Baxt, vice chairman of PayCargo. “As a company founded on the highest principles of honesty and transparency, we have taken very seriously this case of another business infringing on our trademarks and breaching our agreement. We’ve worked hard to build PayCargo’s reputation as the leader in the industry, so we owed it to our customers, employees, and business partners to defend it vigorously. Furthermore, the integrity of the industry needs to be protected to continuously advance and innovate.”

Total spot rates remain steady, with some gains shown in May

John Worthen - June 19, 2024

BLOOMINGTON, Ind. — Although spot rates increased for two of the three principal equipment types, total broker-posted spot rates in the Truckstop system were essentially unchanged during the week ended June 14 (week 24) due to changes in the freight mix. Meanwhile, spot truckload rates bounced higher in May in the DAT One freight marketplace as shippers sought capacity to move greater volumes of van and refrigerated freight, said DAT Freight & Analytics, operators of the DAT One freight marketplace and DAT iQ data analytics service. Truckstop’s report Total rates had barely moved in the previous two weeks. Refrigerated spot rates rose after two down weeks, and flatbed rates were up for a fifth straight week — a streak that had not occurred in more than two years. Dry van rates eased marginally from the prior week. Total loads Total load activity fell 8.4% after rising more than 14% during the first full week following the Memorial Day holiday. Total volume was more than 5% below the same 2023 week and more than 35% below the five-year average for the week. Flatbed was a drag on volume as both dry van and refrigerated load postings were higher y/y in the latest week. Total truck postings rose 5%, and the Market Demand Index — the ratio of load postings to truck postings in the system — fell. Total rates The total broker-posted rate was unchanged from the previous week. Rates were 2.6% below the same 2023 week and about 7% below the five-year average for the week. Total rates were flat despite higher flatbed and refrigerated rates and barely any change in dry van rates largely because of a substantial drop in volume for flatbed, which has the highest rates. If total rates were to continue holding steady, by week 27 they would be higher year-over-year for the first time since June 2022. Dry van rates Dry van spot rates declined by less than a tenth of a cent after falling 2.5 cents during the prior week. Rates were 0.2% above the same 2023 week but 10% below the five-year average. Dry van loads declined 1.4%. Volume was 1.5% above the same 2023 week but more than 30% below the five-year average for the week. Refrigerated rates Refrigerated spot rates rose nearly 4 cents after falling slightly more than 4 cents in the previous week. Rates were nearly 1% above the same 2023 week but more than 6% below the five-year average for the week. Refrigerated loads increased 2.3%. Volume was nearly 8% above the same 2023 week — the strongest year-over-year comparison since January — but about 29% below the five-year average for the week. Flatbed rates Flatbed spot rates rose just over 1 cent after rising by a slightly larger amount during the prior week. The last time that flatbed spot rates increased in more than four consecutive weeks was April 2022. Rates were 2.4% below the same 2023 week — the least negative year-over-year comparison since August 2022 — and 6% below the five-year average for the week. Unless flatbed rates fall by about a cent or more in the current week, they will be higher year-over-year in week 25. Flatbed loads fell 14.2%. Volume was nearly 12% below the same week last year and 42% below the five-year average for the week. DAT One’s report The DAT Truckload Volume Index (TVI), an indicator of loads moved during a given month, hit all-time highs for van and refrigerated (reefer) loads: Van TVI — 289, up 4% from April Reefer TVI — 224, a 4% increase month-over-month Flatbed TVI — 301, down 2% from April The van and reefer TVI numbers climbed 13% and 25% higher, respectively, compared to May 2023. The flatbed TVI fell month-over-month for the first time since December 2023. “Stronger van and reefer volumes are consistent with May, when shippers move seasonal produce and retail goods and truckload capacity tightens due to the Roadcheck inspection event and Memorial Day holiday,” said Ken Adamo, DAT Chief of Analytics. “Carrier attrition created further pressure on capacity.” Spot rates reflected higher demand Spot prices responded last month, with national average van and reefer linehaul rates within 2% of where they were in May 2023: Spot van — $2.01 per mile, up 2 cents Spot reefer — $2.41 a mile, up 9 cents Spot flatbed — $2.52 a mile, unchanged Linehaul rates, which subtract an amount equal to an average fuel surcharge, increased for all three equipment types. The average van linehaul rate was $1.58 a mile, up 5 cents compared to April; the reefer rate jumped 9 cents to $1.94; and the flatbed rate gained 4 cents to $2.01. National average rates for contracted van and reefer freight declined compared to April: Contract van — $2.43 per mile, down 2 cents Contract reefer — $2.79 a mile, down 3 cents Contract flatbed — $3.16 a mile, up 1 cent Load-to-truck ratios edged higher National average van and reefer load-to-truck ratios rose in May: Van ratio — 4.4, up from 1.9 in April, meaning there were 4.4 loads for every van truck on the DAT One marketplace Reefer ratio — 6.3, up from 4.8 Flatbed ratio — 18.0, down from 18.5 Load-to-truck ratios reflect truckload supply and demand on the DAT One marketplace and indicate the pricing environment for spot truckload freight.

Utility Trailer announces Texas expansion

Bruce Guthrie - June 18, 2024

EAGLE PASS, Texas — Utility Trailer is expanding again, announcing the opening of a new Cargobull North America assembly plant and warehouse in Eagle Pass, Texas, according to a recent news release. “As Utility Trailer and Cargobull North America (CBNA) continue rolling out new products, an additional facility has opened to boost production and support their cutting-edge innovations,” the release stated. Adjacent to the Utility Trailer Southeast Texas dealer location in Eagle Pass, officials say this new Utility and CBNA facility will focus on the final assembly operation of CBNA transport refrigeration units (TRU). The plant will also work on final assembly of remote evaporators, solar panels, telematics hardware and other essential TRU parts, and will also be a warehouse that will store materials and parts for CBNA and Utility, according to the release. “It’s an exciting time for Utility’s production efforts,” said Steve Bennett, president and COO for Utility. “The plant and warehouse are centrally located to best serve most of North America. Utility dealers can order CBNA parts directly with rapid response.” Along with the network of six Aurora Parts distribution centers, company officials say they believe the new Eagle Pass facility will further improve the accessibility and availability of CBNA parts and accessories.

ATA’s Truck Tonnage Index sees May jump

John Worthen - June 18, 2024

WASHINGTON — American Trucking Associations’ (ATAs) advanced seasonally adjusted For-Hire Truck Tonnage Index increased 3.6% in May after decreasing 1% in April. In May, the index equaled 115.9 (2015=100) compared with 111.9 in April, according to a news release. “May was the first month since February 2023 that tonnage increased both sequentially and from a year earlier,” said ATA Chief Economist Bob Costello. “While there was clearly an increase in freight before the Memorial Day holiday, it is still too early to say whether this is the start of a long-awaited recovery in the truck freight market.” April’s decrease was revised up slightly from the ATA’s May 21 news release, ATA officials note. Compared with May 2023, the index rose 1.5%, the first year-over-year gain in 15 months. In April, the index was down 1.3% from a year earlier. The not seasonally adjusted index, which represents the change in tonnage actually hauled by the fleets before any seasonal adjustment, equaled 120.4 in May, 7.1% above April. ATA’s For-Hire Truck Tonnage Index is dominated by contract freight as opposed to spot market freight. In calculating the index, 100 represents 2015. Trucking serves as a barometer of the U.S. economy, representing 72.6% of tonnage carried by all modes of domestic freight transportation, including manufactured and retail goods. Trucks hauled 11.46 billion tons of freight in 2022. Motor carriers collected $940.8 billion, or 80.7% of total revenue earned by all transport modes.

There’s a Class 8 tractor pre-buying spree ahead of 2027 EPA rules, ACT reports

The Trucker News Staff - June 18, 2024

COLUMBUS, Ind. — Trucking data in May reflected a temporary slowing pace of price inflation. There were higher truck orders, lower Cass Freight shipments and stalling spot trends — all showing an industry prioritizing planning for emissions rules over cost economics, according to the latest release of the Freight Forecast: U.S. Rate and Volume OUTLOOK report. As ACT references, starting with model year 2027 vehicles, NOx emissions must be reduced to 0.035 grams per horsepower-hour during normal operation, 0.05 grams at low load and 10 grams at idle, per the Environmental Protection Agency’s (EPAs) new rules. This is an 82.5% reduction from the current standard of 2 milligrams. The new standards are more than 80% stronger than current standards and take engine load into account. Many are worried that these new trucks will also cost more. As for current truckload capacity, Tim Denoyer, ACT Research’s vice president and senior analyst, said that small fleets remain resilient as ever, but the record number of operating authority revocations over the past 18 months shows considerable capacity contraction. For-hire truckload conditions are taking longer to improve this cycle than in prior ones, partly because of that resilience, Denoyer noted. “But we think the ongoing capacity expansion by private fleets is outweighing the capacity contraction in the small part of the market,” he said. “Elevated equipment demand as fleets gear up for EPA’27 is a key factor likely to drag overcapacity on even further. The for-hire cycle will improve once excess capacity additions end. That will likely be a while.” Denoyer said that, typically by this point in the cycle, Class 8 tractor orders have fallen considerably further, but longer-term considerations are outweighing cost economics in many cases. “Strong truck orders provide more evidence of pre-buying ahead of 2027 emissions standards, likely extending overcapacity a while longer,” he said. “To the ongoing question of whether the truckload market rebounds or continues to bounce along the bottom, this situation may lead to some more bounces.”

Preliminary net trailer orders dip, ACT reports

John Worthen - June 17, 2024

COLUMBUS, Ind. – Preliminary net trailer orders dropped nominally from April to May, and at 6,000 units, were lower compared to last May, down 46% year-over-year. This is according to ACT Research’s latest report U.S. trailer market report. Seasonal adjustment (SA) at this point in the cycle boosts May’s tally to 7,100 units, according to an ACT news release. Final May results will be available later this month. This preliminary market estimate should be within ±5% of the final order tally, the news release notes. “A year ago, we knew that with pent-up demand beginning to wane and supply-chain congestion, for the most part, cleared, 2024 order activity would be slower compared to 2023,” said Jennifer McNealy, director of commercial vehicle market research and publications at ACT Research. “With continuing weak for-hire truck market fundamentals, and already-filled dealer inventories, it looks like trailer demand will remain restrained for some time. For orders, we are now in the weaker months of the annual cycle, suggesting that there is no catalyst for stronger orders until the fall and the opening of 2025 orders.” McNealy said that while it’s expected that fleets will begin making more money later this year, thereby increasing their ability to purchase equipment, the impact likely will be muted for the trailer industry “as we continue to expect their willingness to spend will lean toward the purchase of new power units ahead of the EPA’s implementation of 2027 regulations, which we believe has already begun.” “Industry anecdotes suggest that the ‘pause button’ is expected to remain pressed in 2024,” she added. “The industry’s largest segments remain under pressure, cancellations remain elevated as dealers and fleets recalibrate their needs, and external forces like the US presidential election and interest rates remain on the closely watched list.”

FMCSA increases state fees collected from motor carriers, brokers

John Worthen - June 17, 2024

WASHINGTON — The Federal Motor Carrier Safety Administration (FMCSA) has hiked the fees that states collect from motor carriers, brokers and leasing companies. According to a posting from Monday, June 17, on the Federal Register, the increase will be 25% above the fees collected in 2024 and will vary “between $9 and $9,000 per entity, depending on the applicable fee bracket.” States use these funds to pay for state highway safety programs. “FMCSA believes this upward adjustment is within a reasonable range,” the Federal Register notice states. “This adjustment to the 2025 registration year provides the required $13 million in revenue allocations to the participating States and the UCR (United Carrier Registration) Plan.” FMCSA officials called the fee increase “a rare occurrence … which has only previously occurred once, over a decade ago.” This upward adjustment follows two years of reductions in fees affecting the 2023 and 2024 registration years, averaging a 37.3% decrease in fees, as well as steady, unmodified collections from 2010 to 2017. Many commenters viewed the increase in fees as unwarranted and unexpected, and explained the UCR Plan should be adjusting its own budget and spending instead. An anonymous commenter expressed confusion over the increase, claiming that the fees were intended to be eliminated “after full reciprocity.” A different anonymous commenter connected this increase to the UCR Plan’s poor budgeting, while another suggested the UCR Plan’s spending should be cut instead. In response, FMCSA officials said they disagreed the commenters’ statements that the fee increase was unwarranted, unpredictable and sudden. “FMCSA stated it anticipated the UCR Plan would recommend an upward adjustment in the fees for the 2025 registration year to comply with the statutory provisions discussed herein,” the Federal Register posting states. “By statute, the UCR fee is authorized for annual adjustment by FMCSA, either to increase or decrease the fee to ensure adequate funds to provide participating states with their revenue entitlement.” FMCSA also disagreed that the UCR Plan has not been operating within its budget. “To FMCSA’s knowledge, the UCR Plan has operated within its approved budget and in recent years has steadily decreased registration fees,” according to the Federal Register post. “In fact, this is the first upward adjustment since 2010. The UCR Plan’s approved allocation for the costs of administration of the Plan and Agreement over the last several years decreased from $5 million per year and is now at $4.25 million. For these reasons, FMCSA declines to modify the final rule in response to the commenters’ suggested changes.” The chart below, provided by the FMCSA, notes the coming fee changes.

KBX Logistics/Georgia-Pacific named Paper Transport’s CPG Dedicated Carrier of the Year

Dana Guthrie - June 17, 2024

DE PERE, Wisc. — KBX Logistics/Georgia-Pacific Paper Transport (PTI) has been awarded the 2023 CPG Dedicated Carrier of the Year award. “To be the best dedicated carrier for one of the largest companies in America is huge,” said Vice President of Operations Wes Kornowske. “That is the top of the mountain.” The company has received the award 10 times during its history. Kornowske highlighted the impressive work of the drivers and collaborative efforts made by the entire team. “We are a bigger company now than ever, but we all still touch that customer in some way,” Kornowske said. CEO Ben Schill also praised the team. “Everybody is working together to create an excellent experience for our customer,” Schill said. “Our goal has always been to be an extension of the KBX Logistics team who handles the transportation for Georgia Pacific. Through the years, we have made each other stronger, and this award is a testament to the valuewe provide year after year.” According to PTI, a top 100 for-hire truckload carrier, its best-in-class drivers are committed to providing outstanding service. Their driver coaching and hiring practices prioritize performance and safety, further enhancing supply chain efficiency. In its 30+ years, Paper Transport has established a notable national presence, offering both asset and non-asset solutions through strategic partnerships and versatile logistics capabilities.

Gerstenslager joins Utility Trailer Manufacturing

Dana Guthrie - June 17, 2024

CITY OF INDUSTRY, Calif. — Utility Trailer Manufacturing Company LLC has announces the addition of Matt Gerstenslager in a new dual role. Gerstenslager will head new dealer development, in addition to improving regional sales support for the east. He comes with seven plus years of experience with Hendrickson International, in various sales and marketing management capacities, and most recently as director of marketing for their suspension products. “Many of us know Matt and we welcome his technical and sales experience, and knowledge of our industry and the competitive landscape,” said Utility’s Chief of Sales Mark Glasgow. “His experience and understanding of our products will prove invaluable in providing excellent service to our dealers and widening our reach to underserved areas. We are thrilled to have him as part of our team.” Gerstenslager will be based out of Canton, Ohio. The hiring comes as Utility continues to strengthen its sales and service support to its extensive and growing dealer network.