Plus: autonomous trucking just raised $113M, California is fighting to keep 20,000 drivers, Arrive's 2026 truckload freight forecast, and more.
Two bills just dropped in the Senate that could reshape trucking faster than anything since deregulation. Plus: Russian hackers targeted your load board, flatbed rejection rates just hit 40%, and a robot is taking the Houston-Dallas overnight run.
This week: The Dalilah Law, a trucking bankruptcy that wiped out thousands overnight, a FreightGuard civil war on Reddit, and the payroll data that's predicting Q4 capacity.
Happy Hump Day. A tentative five-year contract deal has been reached between UPS and the Teamsters, which would prevent a strike involving 340,000 employees. Meanwhile, diesel prices have surged, rising by 9.9 cents. However, that's not the only surge we're seeing. The well-known digital freight brokerage, Surge Transportation, is filing for Chapter 11 bankruptcy. Can you guess the amount that Surge owes to trucking companies and their factoring partners? On a different note, American TikTok trucker, Tierra Young Allen, recently discovered a new way to get detained in the United Arab Emirates...
In today's email:
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🐔 WHAT’S COOKIN’ IN FREIGHT
📦 US Box Shipments Continue Weak Trend in Q2. US box demand remains weak, continuing the months-long trend. This weak demand, a leading economic indicator, reflects a stunted goods economy. In Q2, the Packaging Corp. of America reported a severe 9.8% decline in box shipments. Despite optimism expressed in Q1, no improvement is in sight. Future forecasts hint at improvement in Q3, but no reasoning was provided. Factors such as reduced regional bank lending, ended SNAP benefits, resuming federal student loan payments, and tightened monetary policy from the Federal Reserve cast doubts over increased box demand. Current box demand mirrors 2017 levels, suggesting no growth in six years.
🤝 UPS and Teamsters Strike Tentative Five-Year Contract Deal. UPS & the International Brotherhood of Teamsters have tentatively agreed on a five-year contract, covering over 340,000 workers, preventing a possible nationwide strike. UPS CEO, Carol Tomé, dubbed it a "win-win-win" agreement. Key elements of the deal include a pay raise for full- and part-time workers of $2.75 per hour in 2023 and a total of $7.50 more per hour over the contract's length. Part-timers' pay will rise to at least $21 per hour immediately. Furthermore, the contract abolishes the two-tier wage system and adds 7,500 new full-time union jobs, while filling 22,500 open positions. Other perks include in-cab air conditioning for all large vehicles and Martin Luther King Jr. Day as a full holiday.
⛽️ Diesel Price Surges 9.9¢, Reaching $3.905 per Gallon. The national average price of on-highway diesel has soared by 9.9 cents, hitting $3.905 per gallon, marking the most substantial one-week increase since March 2022. This significant leap comes after a week of no price fluctuation, as reported by the Energy Information Administration (EIA). All ten regions surveyed by the EIA noted a rise in diesel prices. On a related note, the national average gasoline price also climbed, increasing by 3.7 cents to reach $3.596 per gallon. This fluctuation in fuel costs impacts various sectors, from logistics and transportation to consumer goods pricing.
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Yesterday, when I received a DM on our Instagram page featuring a FreightWaves article about Surge Transportation filing for Chapter 11 bankruptcy, I was shocked. How could Surge be filing for bankruptcy? They have been a headline sponsor at almost every major conference and event I've attended in recent years. Their name was ubiquitous, having been one of the sponsors of FreightWaves' "What the Truck?!?".
This news just didn't make sense to me. How could a 'digital' freight brokerage with revenues exceeding $100 million file for bankruptcy? Even with the current freight market being in the condition that it is, Surge Transportation didn't own any equipment. Their overhead consisted only of their employees and technology. Therefore, I decided to delve deeper into Surge Transportation's history and its CEO, Omar Singh. Here is what I found.
According to Omar's LinkedIn profile, Surge Transportation was established in October 2010 and had been in business for nearly 13 years. With headquarters in Jacksonville, FL, and satellite offices in Chicago, IL, and Ashburn, Virginia, Surge was a dominant player in the industry. FreightWaves reported, "Surge posted gross revenues of around $135 million in 2023, a substantial drop of approximately $65 million from the $200 million reported in 2022." The company's LinkedIn page listed 89 current employees, although this might not be entirely accurate as some people don't update their employment status. At their peak, they had over 100 employees.
Portraying itself as a digital freight broker akin to Uber Freight or Convoy, Surge operated without the backing of venture capital. They were a habitual sponsor of events and shows, which is why their bankruptcy was such a shock. It begs the question: why would a company sponsor high-priced events and shows without significant cash reserves? This situation is a stark reminder of how online appearances can often deceive us.
According to FreightWaves, Surge Transportation "owes about $12 million to 5,000 trucking companies," as well as to various factoring companies. This includes RTS Financial Services of Dallas, which is owed nearly $2.5 million; Triumph Financial Services, also based in Dallas, owed more than $1.4 million; and Apex Capital Corp. of Fort Worth, Texas, which is owed nearly $660,000.
Reactions to the news have been varied and intense. A comment from a former Surge Transportation employee on the FreightWaves article caught my eye.
Then there's Tim Higham, CEO at AscendTMS, who offered a different perspective on LinkedIn, "Being 'big' ($150m in sales is 'big' in this industry) doesn't protect you from ANYTHING...not even bankruptcy. Big does NOT mean strong. Big does not mean you're invincible." He went on to explain, "OPPORTUNITY comes from collapse and chaos. In this case, other brokers will move in to eat the scraps (and perhaps find a few meaty morsels, too). This is ALWAYS the process...and opportunity is always a by-product of failure." Tim's post is both educational and entertaining.
So, what’s next for Surge Transportation? Following their Chapter 11 bankruptcy filing, the company intends to restructure their business while continuing operations. They aim to remedy the overdue payments to 5,000 trucking companies, totaling around $12 million, by amending their factoring agreement with Triumph. This strategy, along with other emergency motions, is expected to be filed in the next two weeks. Meanwhile, Surge will also need to address the owed wages to its employees and payments to partners Valoroo and Hubtex. The preliminary hearing for this case is scheduled for Thursday in Jacksonville.
Sources: FreightWaves, Bankrupt Company News
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AROUND THE FREIGHT WEB
🚚 Yellow Stops Pickups. Yellow has halted pickups in various regions due to strike threats and decreased shipments amid bankruptcy concerns.
🚓 Big Rig Operation Nabs Thieves. "Project Big Rig" operation in Ontario arrested 15 individuals involved in a major auto theft ring targeting commercial vehicles and cargo, with stolen goods worth $9.24 million recovered.
🚔 K-9 Attacks Surrendering Trucker. An Ohio K-9 officer is on administrative leave after his police dog attacked a truck driver who was surrendering following a chase.
🔥 Nikola Truck Fire Sparks Concerns. A fire reigniting in a previously damaged Nikola electric truck has raised safety concerns and prompted questions about potential recalls due to possible battery defects.
🚛 American TikTok Trucker Detained in Dubai. American TikTok and trucker influencer, Tierra Young Allen, is embroiled in a legal dispute with a car rental office in Dubai. She hasn't been able to leave the country since April.
FREIGHT MEME OF THE DAY
Plus: autonomous trucking just raised $113M, California is fighting to keep 20,000 drivers, Arrive's 2026 truckload freight forecast, and more.
Two bills just dropped in the Senate that could reshape trucking faster than anything since deregulation. Plus: Russian hackers targeted your load board, flatbed rejection rates just hit 40%, and a robot is taking the Houston-Dallas overnight run.
This week: The Dalilah Law, a trucking bankruptcy that wiped out thousands overnight, a FreightGuard civil war on Reddit, and the payroll data that's predicting Q4 capacity.
Indiana pulled the trigger on carriers employing illegal CDL holders. Plus: tariff ruling could flood LA with imports, DC finally moves on double brokers, spot rates are outrunning contract, and more.
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