Rate Hike Is Getting Burned

Happy Monday. Four major LTL carriers posted earnings last week, and diesel drove more of those numbers than pricing did.

Plus:

• Mexican Trailers Just Got Up To 80% Pricier

• $5K Got You a CDL, No Test

• Driverless Trucking Just Undercut Driver Pay

💡 QUESTION OF THE DAY:

Diesel prices have climbed ____% since the Iran conflict began in February.

🍳 WHAT’S COOKIN’ IN FREIGHT

🚛 Mexican Trailers Just Got Up To 80% Pricier. The U.S. Department of Commerce imposed preliminary anti-dumping duties as high as 79.92% on enclosed trailers imported from Mexico, ruling manufacturers sold below fair market value. Duties range from 3.21% up to that ceiling and apply on top of separate countervailing duties already imposed for foreign government subsidies. The petition came from the American Trailer Manufacturers Coalition, representing domestic builders Great Dane, Stoughton, and Wabash, who say the practices cost roughly 50,000 U.S. jobs. Commerce issues its final determination later this year. "These preliminary determinations represent another meaningful step toward restoring fair competition," said Robert E. DeFrancesco, trade counsel to the coalition and a partner at the law firm Wiley.

🚨$5K Got You a CDL, No Test. Three people pleaded guilty this week to a Louisiana bribery scheme that let at least 124 drivers skip CDL testing entirely for roughly $5,000 each. Mahmoud Alhattab admitted to bribing two Donaldsonville motor vehicle office employees to fabricate knowledge test answers, while co-defendant Jonathan Parsons faked training and skills test records for at least 118 more applicants. A third defendant, Marline Roberts, admitted forging skills test scoring sheets to back the fake results. The scheme ran from 2020 to 2024 before the Federal Bureau of Investigation and the U.S. Department of Transportation's Office of Inspector General cracked it, and other defendants are still awaiting trial.

🤖 Driverless Trucking Just Undercut Driver Pay. Aurora Innovation detailed pricing for its subscription driverless model: carriers own the truck, Aurora supplies the automated system, targeting $0.85-plus per mile. That's roughly 17% below the $1.028 per mile the American Transportation Research Institute says the average fleet already pays a human driver. Hirschbach Motor Lines is the first real test, committing 500 autonomous tractors, about a sixth of its fleet, across 2027 and 2028. Aurora CEO Chris Urmson wasn't hedging on the timeline, saying carriers not using the technology "in the next five years" won't be competitive in long haul.

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Blame Diesel For This Rate Hike

LTL pricing jumped 18% year over year in June — the government's most recent reading. Carriers are only responsible for about half that number, and with diesel still averaging $5.313 per gallon this week, the pressure hasn't let up.

XPO, Saia, ABF Freight, and Old Dominion Freight Line all reported second-quarter earnings last week, and the message was consistent: capacity is tightening, and pricing power is back.

XPO Chief Financial Officer Kyle Wismans called it a "productive pricing environment," with contract renewals landing in the high mid-single digits.

Saia CEO Fritz Holzgrefe said its contractual renewal rate hit 10.7% for the quarter, plus a 7.1% general rate increase in early July.

ABF Freight Chief Commercial Officer Eddie Sorg reported a 5.8% year-over-year increase in contract rates.

None of that explains an 18% jump in the government's own LTL pricing gauge, which followed 20.9% in May and 20% in April.

Fuel Is Doing The Heavy Lifting

Diesel is averaging $5.313 a gallon, up $1.51 from a year ago and 36% higher since the Iran conflict began in February.

LTL fuel surcharges rose more than 60% year over year in June, according to AFS Logistics, pushing its rate-per-pound index to 76.5% for the quarter, a new high.

For the week of July 27, the LTL fuel surcharge is 31.5%, effective July 29.

Strip out fuel, and Old Dominion's yield gain drops from 15.2% to 5.5%. The base-rate story is real; it's just a fraction the size of what's showing up on shippers' invoices.

Truckload Freight Is Bleeding Into LTL

Tighter truckload capacity is pushing what carriers call "bubble shipments," freight that sits on the line between LTL and truckload, back into LTL networks.

Michael Castagnetto, president of North American surface transportation at C.H. Robinson Worldwide, said the company's LTL volume grew roughly 2% year over year in the second quarter while truckload volume grew about 0.5%, which he called share gains in both modes.

According to JOC, shippers should expect higher LTL base rates and fuel surcharges into next year, as tightening truckload capacity continues to push more freight into LTL networks.

Adam Satterfield, chief financial officer at Old Dominion Freight Line, pointed to a leading indicator on his company's earnings call: the U.S. inventory-to-sales ratio just hit its lowest point since 2021. "That's a precursor," he said, to more volume and market-share opportunities for LTL carriers.

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 🌎 AROUND THE FREIGHT WEB

💰 Bankruptcy Didn't Save Them From This Bill. STG Logistics will pay at least $2.775 million to settle a New Jersey misclassification case. The debt survived Chapter 11 because it counts as a legal priority claim.

🚨 $20 Million Was Hiding Under The Floorboards. Customs agents allegedly found cocaine packages stashed beneath a trailer's floorboards at the California border, valued at north of $20 million.

🤖 Two-Thirds Of UPS Volume Now Skips Humans. UPS says 68.5% of its U.S. package volume now moves through automated buildings, up from 64% a year ago, and that shift already cost tens of thousands of jobs.

🚆 Rails Might Get Their Own English Rule. USDOT wants locomotive engineers and conductors certified in English, and it has just drawn a hard line for crews crossing from Mexico.

🍺 He Fled A 9-Car Crash With A Bud Light. A trucker fled a nine-vehicle crash in Erie, Pennsylvania, and now faces 22 charges. Police say he still had an open case of beer in the cab when they caught up with him.

🎣 THE FREIGHT MAGAZINE

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😂 FREIGHT HUMOR

🎧 THE FREIGHT CAVIAR PODCAST

Co-Founder at Easy Truck Shop, Yuri Zgherea, joined Paul-Bernard Jaroslawski on the FreightCaviar Podcast to discuss why truck shops often sit on millions of dollars in parts simply because they don't track inventory properly, and how a road trip helped him build software around the problems trucking companies actually face, and more.

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