🎣 The Opposition Is Celebrating

Happy Friday. A nearly 7,000-page merger application to combine Union Pacific and Norfolk Southern just got rejected twice. We break it down in today's feature.

Plus:

• USPS Signs a Contract With DHL
• 20+ Trucking Companies Closed in May
• Hub Group's $77 Million Accounting Error

🍳 What's Cookin' In Freight

📬 USPS Locks In DHL For $10B+. The United States Postal Service just signed a multi-year contract with DHL eCommerce, replacing a long-standing relationship with UPS that ended after UPS walked away earlier this year, citing profitability concerns. DHL now becomes USPS's primary partner for last-mile parcel delivery. Valued at well over $10 billion, it's the largest and longest exclusive contract in the 25-year history of the DHL eCommerce and USPS partnership. UPS handled an estimated 10% of its total volume through the USPS partnership before pulling out, a deliberate move to protect margins as the deal became less profitable.

📉 Another Wave Of Carriers Is Going Under. More than 20 trucking and logistics companies filed for Chapter 7 liquidation or Chapter 11 restructuring in May alone, according to FreightWaves. The list spans regional carriers, oilfield haulers, and 3PLs across Illinois, Texas, Arkansas, Oklahoma, and beyond. Among the most notable is Standard Forwarding Freight, a 92-year-old Georgia-based carrier with 302 trucks and 230 drivers, which finalized its liquidation this month. Carrier exits are running 31% higher than the same period in 2025, while new authority issuances have dropped 22%.

🚨 Hub Group's CFO And COO Are Out. Kevin Beth and Brian Meents have both vacated their C-suite roles at Hub Group following an audit committee review. It's a direct consequence of the $77 million accounting error disclosed in February, in which Hub Group understated purchased transportation costs for the first three quarters of 2025. The error sent shares down 19% in a single day. Todd Heeter, founder of an outside advisory firm, has stepped in as interim CFO for at least six months while a permanent search is underway. The COO role is being absorbed by other senior leaders. Hub Group still hasn't filed its periodic reports with the SEC. The stock price has recovered to its year-start level, but the audit is still open.

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The Merger That Can't Get Approved

Union Pacific wants to buy Norfolk Southern. Two of America's seven major freight railroads want to merge into a single coast-to-coast system. The biggest railroad merger in U.S. history (if it ever actually gets approved).

Yesterday, the federal regulator in charge (the Surface Transportation Board) said yes and no at the same time. Yes, we'll consider your application. No, we're not starting the review yet. Both stocks dropped 5% the moment the decision came out.

This is the second time it's hit a wall.

The first application (roughly 7,000 pages) was rejected in January due to missing required information. They rewrote it and resubmitted it in April. Yesterday's answer: still not good enough. File more information by July 27, or nothing moves.

"The application lacks clarity and detail and does not yet afford parties a meaningful opportunity to comment on the merits of the Transaction." - STB

The Opposition is Celebrating

Companies that actually move stuff by rail are worried they'll have fewer options and higher prices under one mega-railroad.

The National Industrial Transportation League said the application "sidesteps the public-interest standard." The Freight Rail Customer Alliance, representing 3,500+ energy, agriculture, and chemical companies, called the freeze "a step in the right direction."

CN (Canadian National), a competing railroad with everything to lose, didn't hold back: 

"The Applicants have not done their homework, and they cannot expect anyone else to bail them out."

Why Brokers Should Care

A meaningful chunk of the brokerage market is intermodal. Brokers arranged roughly 4.2 million intermodal moves in 2023 alone, and the intermodal segment held the biggest share of the global freight brokerage market in 2024.

The UP-NS pitch to regulators is that the combined network would pull 2.1 million truckloads off highways annually. Less truck demand on long-haul lanes means more capacity chasing the same freight.

But Rob Liss, who wrote an in-depth breakdown of the merger for our next edition of FreightCaviar Print, thinks the rail vs. truck framing might already be the wrong lens:

"The future of autonomous trucking is railroading... and the future of railroading is autonomous trucking... and that future is now. It belongs to whichever railroad has the guts and courage to embrace the technology first and deploy it at scale."

His argument: autonomous trucks will hit intermodal dray economics before they disrupt OTR, because the unit economics on a 100-mile dray to a rail terminal are completely different than a 1,000-mile dry van move. Railroads with deep pockets that have operating ratios in the low 60s versus truckload carriers in the mid-to-high 90s are the most likely early buyers. When that happens, intermodal gets cheaper and more competitive faster.

Rob Liss's full breakdown runs in the next issue of FreightCaviar Magazine. Subscribe here.

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 🌎 Around the Freight Web

🏛️ Only The Best Drivers Should Have CDLs. Duffy told a House committee on May 21 that up to 200,000 non-domiciled CDL holders could be forced out of trucking under the new final rule.

🕐 Yellow's Gone, But Do Workers Finally Get Paid? Almost three years after 30,000 workers at LTL carrier Yellow lost their jobs, the money is finally in sight — $601 million sitting in a liquidating trust that will go live in June or July. The lawyers just need to agree on who gets how much.

⚖️ SCOTUS Just Redrew The Interstate Line. A delivery worker who never crosses state lines can still be classified as interstate if they're involved in the final leg of an interstate supply chain.

⛽ If Hormuz Stays Closed, Someone Has To Use Less Oil. That's the Fed's warning. Dallas Fed President Lorie Logan said U.S. production can't replace the 10% of global supply stranded in the Persian Gulf, and if the Strait doesn't reopen soon, consumption will have to fall.

🤖 Motive Just Dropped A Lot Of New AI. New dashcam with stereo vision, an AI assistant that drafts driver messages and generates insurance reports, and an automation engine that responds to fault codes without a manager touching anything. Motive claims $3.4 million in annual savings for a 1,000-truck fleet.

🤖 Motive Just Rebuilt the Dashcam. The fleet management platform unveiled an AI-powered unit that runs 30+ AI models simultaneously and says a 1,000-vehicle fleet saves an estimated $3.4 million a year on accidents, insurance, and fuel.

🎣 The FreightCaviar Corner

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Freight Humor