A Third of the Carriers, Gone

Happy Monday. One of the biggest brokers in the country cut a third of its carriers, and the timeline says there's more going on than fraud or vetting.

Plus:

• FMCSA Doubles Down on ELP

• KLLM Wants Your Spouse's OK

• Shippers Are Shifting to Rail

💡 QUESTION OF THE DAY:

Landstar's revenue was up ___% year-over-year last quarter.

🍳 WHAT’S COOKIN’ IN FREIGHT

🚛 FMCSA Doubles Down on ELP. Since April, FMCSA has enforced a narrower exception for English proficiency violations at the U.S.-Mexico border: only drivers whose entire trip remains within the commercial zone at the border are exempt from being placed out of service. Today, FMCSA is writing that exception into federal regulations, making it permanent rather than just guidance. FMCSA estimates that locking it in will place 9,000 more drivers out of service annually, costing carriers $14.4 million at $800 per day and 2 days to replace a driver. ELP out-of-service orders are already climbing: more than 16,000 issued this year, versus roughly 12,500 in the second half of 2025.

⚖️ KLLM Wants Your Spouse's OK. The U.S. Equal Employment Opportunity Commission sued KLLM Transport Services, alleging the Richland, Mississippi-based carrier's driver training academy gave female students worse access to trainers than male students. Female students who requested a female trainer waited longer to start training and went unpaid during the wait, while male students requesting a male trainer were paid while they waited, according to the complaint. The suit also alleges female students had to notify their spouse before requesting a male trainer, with no similar requirement for men, and that trainers and students shared truck sleeping berths regardless of sex.

🚂 Shippers Are Shifting to Rail. Domestic intermodal volume is up 10% year-over-year while long-haul truckload demand, loads over 800 miles, has gone flat and started falling faster than normal for August, according to FreightWaves SONAR data. Chicago, the largest U.S. market for domestic container shipping, is growing 9% versus Los Angeles's 3%, and Atlanta is up more than 20%. The reason: truckload pricing from Chicago to Elizabeth, New Jersey, is up 31% year-over-year, including fuel, versus 5% for intermodal, and truckload pricing from Atlanta to Elizabeth is up nearly 60% versus just 6% for intermodal. FreightWaves analyst Zach Strickland says rate hikes are "a certainty" for intermodal carriers, who could raise prices into the double digits without losing this new business.

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Why Landstar Trimmed a Third of Its Carriers?

The Supreme Court's May ruling in Montgomery v. Caribe Transport ended the federal preemption defense brokers relied on in negligent-hiring suits. The most recent nuclear verdict showed what that shift looks like in practice.

Landstar CFO Jim Todd said on the company's Q2 earnings call: "There's certainly going to be some element of plaintiffs being more emboldened to pursue these cases [after the Montgomery decision]."

Two Stories, Same Four Years

On that same call, Landstar disclosed something no other major broker has. Its approved carrier network shrank from more than 100,000 to just over 64,000 in four years, which is a 35% cut. That decline started in 2022, four years before Montgomery. So what actually drove it?

Chief Safety and Operations Officer Matt Miller attributed the drop to fraud vetting: "That all started with cargo fraud, right? The investment in technology and the available technology that became available to us out of the advent of fraud helped us begin to drive further vetting standards within our organization and drive down those overall approved carriers in the network."

CEO Frank Lonegro wasn't asked about the cuts, but earlier on the call he described the broader market: "Market conditions which have favored the shipper since late 2022 have begun shifting rather rapidly in favor of the transportation provider." That's the same four-year window Miller cited, from 2022 until now.

Landstar hasn't disclosed how many of the 36,000 carriers it removed versus how many left on their own. FTR's Avery Vise has tracked industry-wide carrier revocations, which peaked at roughly 24,000 in a quarter in early 2023.

Landstar's Post-Montgomery Optimism

Broker interest in Landstar's independent agent network, where brokers operate under its insurance and scale, has grown since the ruling.

"What you're seeing is an environment where small to medium-sized brokers are concerned about an existential risk," Lonegro said.

He also pushed for a federal vetting standard: "We believe greater federal clarity around carrier vetting and selection standards would help support a more predictable operations, insurance, and claims environment." TIA filed a petition with FMCSA in June asking for the same thing.

Landstar added an $18 million Midwest broker as a new agent in July and reported $1.43 billion in revenue for the prior quarter, up 18% year-over-year.

PRESENTED BY HIGHWAY

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 🌎 AROUND THE FREIGHT WEB

👁️ CHP Catches Truckers From the Sky. The California Highway Patrol paired an aerial unit with ground units on I-80 to catch semis skipping the mandatory brake-check area at Donner Pass, a stretch where recent brake fires have raised alarms.

⚖️ Shippers Try to Block the Rail Megamerger. Five shipper groups, including the American Chemistry Council and the Fertilizer Institute, told regulators this week that Union Pacific and Norfolk Southern still haven't provided enough information for regulators to approve their merger.

🦎 No Room for Chameleon Carriers in Canada. The Canadian province of Alberta shut down 20 unsafe trucking companies since October, with 13 of them being chameleon carriers, and blocked 40 more before they could get certified.

🏭 Daimler Truck's Biggest US Plant Has No Home Yet. Daimler Truck's supervisory board approved its largest-ever U.S. truck manufacturing plant. Construction will start late this year, but the company still hasn't chosen a location.

🤝 BlueGrace Buys Its Way Into the Pacific Northwest. BlueGrace Logistics has acquired Truk TMS, an Idaho-based LTL broker that has operated as a BlueGrace partner for years, marking its third acquisition in this roll-up after STB Freight Group and FreightCenter.

🍰 The Snack Cakes Never Left the Warehouse. A West Virginia man faces 15 felony counts, including forgery, for billing three Pennsylvania retail chains for Little Debbie deliveries that simply never happened.

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😂 FREIGHT HUMOR

🎧 THE FREIGHT CAVIAR PODCAST

Founder & CEO at Kovin Group, Serge Raducan, joined Paul-Bernard Jaroslawski on the FreightCaviar Podcast to discuss how Moldova became a hub for U.S. dispatching, the challenges of running U.S. freight operations from overseas, whether AI will replace dispatchers, and more.

Watch it on YouTube, or listen to the full episode on Spotify and Apple Podcasts.