🎣 FMCSA’s Damning Report

TGIF. We're closing out the week with a scathing report released by FMCSA's Truck Leasing Task Force, exposing a seemingly parasitic practice that's taking advantage of truck drivers nationwide.

Plus:

• 📈 Knight-Swift Eyes 2025 Growth
• 🤝 Logistics Confidence Amid Tariff Risks
• ☕ Brokerage Sued Over Missing $84K
• & more...

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🐔 WHAT’S COOKIN’ IN FREIGHT

☕ Coffee Wholesaler Sues Logistics Firm Over Missing $84K Shipment. Coffee Holding Co. has filed a lawsuit against Ryaan Logistics for breach of contract and negligence following the disappearance of an $84,500 coffee shipment. The load was allegedly brokered to AFC Trucking, whose identity was later revealed to have been stolen with its information changed online. A different carrier, Maya Transportation, collected the shipment but failed to deliver it to United Natural Foods in Centralia, Washington. Communication with the driver was subsequently lost. Ryaan Logistics tracked the load to two warehouses in California but never recovered it. Coffee Holding claims Ryaan failed to properly vet the carrier and seeks compensation. The case, overseen by U.S. Magistrate Judge Joseph Marutollo, is scheduled for its first hearing on March 14.

📈 Knight-Swift Closes 2024 With Potential Growth in 2025. Knight-Swift Transportation ended 2024 with a 3.5% revenue decline and a net income of $69.5 million. CEO Adam Miller expressed optimism, citing "more conviction" in moving past the prolonged down cycle. Despite revenue dips in Truckload (-4.4%), LTL grew 20.2%, driven by a 30% increase in door count, thanks in part to their acquisition of Dependable Highway Express and other organic network expansions in 2024. Miller emphasized reinvestments in technology, acquisitions, and cost discipline to prepare for market recovery, stating, "We have sustained efforts to develop technologies...to be more efficient." Knight-Swift anticipates improving conditions in 2025, leveraging its scale and diverse offerings.

🤝 Logistics Operators Maintain Confidence Amid Tariff Risks. Logistics companies continue to invest heavily in US-Mexico trade infrastructure, betting on nearshoring trends despite potential tariff increases. Schneider partnered with CPKC to transport containers between Mexico and the Midwest, with CEO Mark Rourke stating the firm is poised for growth "regardless of what happens with the tariffs." C.H. Robinson, XPO, Ryder System, and others have expanded their cross-border operations, driven by manufacturing shifts to Mexico. Meanwhile, CPKC’s $31 billion merger and a $100 million Rio Grande bridge project underscore the sector’s long-term confidence in future trade despite impending tariffs. Prologis CEO Hamid Moghadam affirmed continued investments in Mexico and Canada “even as trade policies evolve.”

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Lease-Purchase Scandal: FMCSA’s Damning Report of the Programs

A new FMCSA report has pulled back the curtain on lease-purchase agreements in trucking, labeling them exploitative schemes designed to trap drivers in debt rather than help them achieve truck ownership.

The findings from the Truck Leasing Task Force (TLTF) paint a grim picture of an industry rife with misleading contracts, sky-high turnover, and financial ruin for drivers.

Key Findings From the Report

• A Mirage of Ownership: The FMCSA found that less than 1% of drivers in lease-purchase programs ever own their trucks. Dart Transit Company, one of the few carriers to provide data, revealed an average of just 34 buyouts per year across its 1,500 owner-operators—a success rate so low it barely registers.
• Debt Overload: Drivers are saddled with steep deductions for truck payments, maintenance, and other expenses, often resulting in negative paychecks. Some drivers end up owing money to carriers even after weeks of hard work.
• High Turnover, Low Transparency: Programs boast alarming turnover rates, sometimes exceeding 300% annually, with drivers cycled in and out while paying for trucks they’ll never own. Contracts often include opaque language, making it nearly impossible for participants to understand the financial risks.
• Misclassification Woes: Many drivers are misclassified as independent contractors, robbing them of legal protections while keeping them tethered to carriers’ control over routes, loads, and pay.

FMCSA’s conclusion? These programs are structured to prioritize carrier profitability at the expense of drivers, who are sold dreams of independence but delivered a financial nightmare.

"The Task Force heard no evidence that lease-purchase arrangements were an important means for drivers to achieve truck ownership or to become small business owners. In fact, all the comments and data TLTF saw suggested that driver success is rare enough that programs seem designed to ensure failure for the overwhelming majority of drivers."

Lawsuits Shine a Light on Exploitation

The damning FMCSA findings echo legal battles that have exposed the predatory nature of lease-purchase programs.

"It was common in office culture to dread Tuesdays and Thursdays because most driver managers would be assuming that they would be having difficult conversations with their drivers regarding negative paychecks. As in, they owed the company money" (Cervantes v. CRST).

• Brant vs. Schneider National: Lease-purchase drivers alleged misclassification as contractors, inflated truck payments, and underpaid loads, creating a system that made truck ownership nearly impossible.
• Cervantes vs. CRST: Drivers claimed CRST’s lease program led to negative paychecks due to excessive deductions, alleging misclassification and labor law violations.
• Roberts vs. TransAm: This case highlighted how TransAm’s lease-purchase agreements left drivers in financial ruin, with hidden fees and deductions that made it nearly impossible for drivers to break even, let alone own their trucks.

What This Means for Trucking

Lease-purchase programs are more than just bad deals for drivers—they threaten the stability of the trucking industry itself. Trucking moves over 67% of U.S. domestic freight, yet the practices exposed by FMCSA and these lawsuits show an industry at odds with its workforce.

Drivers, the backbone of freight, are being pushed out due to unsustainable conditions. FMCSA and industry advocates are calling for sweeping reforms, including a ban on lease-purchase agreements and stricter oversight of driver classification.

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🌎 AROUND THE FREIGHT WEB

🚧 Problem Snow. A jackknifed semi-truck on a snowy Highway 231 in Alabama left 200 drivers stranded. Fortunately, no injuries were reported. Meanwhile, jaw-dropping drone footage captured snow-covered interchanges in New Orleans.

💰 Tive Massive Funding. Tive, a shipment tracker company, raised a staggering $40 million in Series C funding. CEO Krenar Komoni thanked World Innovation Lab, Sageview Capital, and other investors for their support, stating the company is ready to “execute” its future plans.

📈 Triumphant Q4 Earnings. Triumph Group's Q4 earnings of 31 cents per share exceeded estimates of 12 cents, though the company’s bottom line declined by 3.1% from the prior year’s earnings of 32 cents per share.

🏛 Lytx Class-Action Settlement. Drivers have settled a class-action lawsuit with Lytx over BIPA violations. Lytx “vigorously denies all of the claims and allegations.” The settlement totals $4.25 million, though it remains uncertain how many individuals fall under the settlement umbrella.

🚛 RI’s Truck-Only Tolls. Rhode Island’s truck-only tolls are projected to generate $10 million in 2025, pending equipment inspections and upgrades, and $40 million in 2026. No date has been set for when the tolls will reopen.

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• FreightCaviar Podcast: This week on The FreightCaviar Podcast, NFL start turned Brokerage CEO Desmond Clark shares how outsourcing, mindfulness, and smart strategies transformed his business. Catch it now on YouTube, Spotify, or Apple Podcasts.
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