Plus, we provide a clarification on Wednesday's story about the truck driver who killed five people while distracted by TikTok, report on Mexico-U.S. truck crossings reaching record numbers, and discuss a new law in Massachusetts that could drastically reduce truck registrations.
Good morning & happy Friday. Today's newsletter covers the sudden closure of Universal Capacity Solutions, which left 130 employees jobless. We also highlight record Mexico-U.S. truck crossings and the Canadian Rail lockout's economic impact.
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The FreightCaviar Podcast: Listen to this week's episode, where we interview Harvard alum and freight tech founder Dhruv Gupta.
*Greenscreens.ai, forecasts real-time truckload buy prices that are suited to each freight brokerage's purchasing power using AI and machine learning. Its engine takes into account over 130 attributes and data points in each rate forecast.
🐔 WHAT’S COOKIN’ IN FREIGHT
In Wednesday's newsletter, we didn’t clarify that the Logiflex driver was not at fault. He was hit by another truck, whose driver was distracted by TikTok, leading to an accident that killed five others.
❗Clarity on Wednesday's Story. We would like to address an article posted on Wednesday regarding the sentencing of a distracted driver in Arizona. The image accompanying the article could have been misinterpreted, potentially implicating an uninvolved carrier. To clarify: The Logiflex truck (trailer) pictured was not at fault. It was legally stopped when struck by the distracted driver working for Mr. Bult's Inc. (MBI), which then caused the Logiflex vehicle to collide with others. Logiflex has no connection to the sentenced driver. We apologize for any confusion our article may have caused and stand by Logiflex's innocence in this tragic incident.
🚛 Mexico-U.S. Truck Crossings With Record Numbers. Northbound truck crossings from Mexico to the U.S. hit an all-time high in Q2 2024, with 1.97 million crossings, marking a 4.3% year-over-year increase and a 21% jump from Q2 2018. Supply chain professor Jason Miller's offers potential reasons for the increase: increased agricultural shipments, more freight-intensive manufacturing exports, and potential tariff avoidance tactics. Despite previous fluctuations due to pandemic-related disruptions, this robust growth indicates a strong rebound in Mexico-U.S. trade relations with potential for further increase.
🚂 Canadian Rail Lockout Threatens Economic Disruption. The Canadian Rail shutdown has halted Canadian rail operations, potentially causing $250 million in daily economic losses. The stoppage affects around 9,000 workers and impacts various sectors, including grain exports, chemical supplies, and auto manufacturing. With 60% of western U.S. chlorine sourced from Canada, water treatment facilities face potential shortages as well. The Canadian government initially hesitated to intervene but has now ordered binding arbitration to resolve the dispute. U.S. freight could potentially see an increase in demands for trucks, rate increases, and supply chain delays.
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Universal Capacity Solutions (UCS), a Nashville-based freight brokerage, ceased operations on Tuesday, leaving approximately 130 employees jobless, reports say. An insider revealed the closure came without warning from the parent company, Universal Logistics Holdings Inc. (ULH), catching both employees and carriers off guard.
Key Points:
Abrupt Closure: UCS, a wholly-owned subsidiary of ULH, shut down operations unexpectedly on Tuesday.
Job Losses: Around 130 employees were laid off as a result of the closure.
Carrier Concerns: Initial reports suggested some motor carriers were stranded under loads, but this may have been due to communication breakdowns.
Wind-Down Process: A skeleton crew remains to manage the closure and ensure carriers are paid for ongoing loads.
No WARN Notice: ULH did not file a required Worker Adjustment and Retraining Notification (WARN) Act notice with the Tennessee Department of Labor.
The closure of UCS is another casualty of the ongoing freight recession, which has forced numerous trucking and logistics companies to downsize or shut down entirely over the past few years.
Behind the Scenes:
A manager at UCS, speaking anonymously to FreightWaves, revealed:
The brokerage was under significant pressure to generate profits.
All tenured employees (>6 months) received severance packages.
Freight fraud, stolen loads, and double-brokered loads have become significant issues in the current market.
Tight profit margins (8-10%) mean that a single stolen load can wipe out an account's monthly profit.
Company Background:
UCS began as Cavalry Logistics, acquired by ULH in December 2009 and rebranded in January 2020. ULH, headquartered in Warren, Michigan, operates several logistics and transportation subsidiaries across North America.
As of writing, there has been no public comment from ULH CEO Tim Phillips.
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⛽ No More Diesel Trucks in MA. Starting January 1, 2025 Massachusetts is banning the sale of new diesel trucks. Only electric truck are allowed to be sold in the state afterward.
📈 Trucking Owner's Financial Update. Ted Johnson, CEO of ECE Trucks, has reported positive trends within his company, accrediting it to his team’s hard work and “perhaps and indication of modest improvements in the market.”
📉 Werner Enterprises Struggles. Werner Enterprises is underperforming in the stock market, facing challenges that have left investors concerned about its future prospects.
🛰️ Breakthrough in Tracking Tech. Tern AI has announced a milestone with their breakthrough tracking technology, with them now being able to track far more accurately than the chaotic triangulation of normal GPS.
🎣 THE FREIGHT CAVIAR PODCAST
On the FreightCaviar Podcast, we sat down with Dhruv Gupta, Co-Founder and CEO of Drumkit, (formerly known as Axle Technologies), an integration tool that automates tasks. Dhruv reflects on his experiences at Harvard, provides insightful perspectives on what differentiates brokerages, and discusses their future.
I’m Adriana, a writer and editor at FreightCaviar. I’ve covered everything from freight tech to industry lawsuits and market shifts, helping scale us to almost 14K subscribers. My goal: to make logistics stories digestible, clear, and fun to read.
Hello! I'm Jerome FreightCaviar! I’m into the politics of freight and the impact it will have worldwide. I'm always eager to learn more. Follow me on X @JeromeFreightC
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