FreightWaves Today | September 17

Julie Van de Kamp (0:36)

All right. Hello, and welcome to FreightWaves Today. I am Julie Van de Kamp, joined today by Zach Strickland. We got a great show coming up. We have Peacock Tariff Consulting's Kyle Peacock to break down the collapse in US-Canada trade and talk about what's happening with Mexico and those negotiations.

Obviously, we'll get into the headlines. We've got a great sonar update. Always fun to do the sonar update with Zach who is so much better at it than I am. So love that. Then we also have Emerge's new CEO, Mark McEntire. It'll be a great show.

Zach Strickland (1:09)

Yeah, it's a big show. It's Thursday.

Of course, you get some Freightonomics here at the end. We're going to break apart the rate hike situation, which I think most people, myself included, don't fully understand all the downstream influences and what all this means. A lot of the financial community gets really excited about this stuff and it's like you don't need necessarily to have a finance degree to really understand it.

Julie Van de Kamp (1:34)

Well, I do want to understand. We're talking about that a little bit before the show that I'm excited that they're going to be talking about it on Freightonomics because I understand a little bit of an increase in the interest rate. But what does that mean for me? What does that change? What are the downstream effects?

What are the impacts of that? So I'll be really excited for you guys to get into that.

Zach Strickland (1:51)

Yeah. Then of course, we're going to have Stuart Chirls on to break down some of the port volume. We had record volumes, a third all time in August for Long Beach.

Then of course, nationally or all over in all port. The top 10 ports of course showed pretty high elevated volumes too. We've been tracking that in Sonar. So we saw this coming with our bookings data. So we're going to have him on and also talk about what that means. Of course, it'll line up well with Peacock coming on to talk about the tariffs.

Julie Van de Kamp (2:19)

Absolutely.

Also, the morning minute, we'll be talking a little bit about container delays based on the port volumes. So let's actually go ahead and get into the headlines.

We kick things off with a brutal earnings warning that sent Wall Street running for the exits. Shares of JB. Hunt Transport Services plummeted 12 percent in early Wednesday trading after company executives disclosed that near-term cost pressures are severely outpacing pricing gains, likely resulting in a 5-10 percent sequential decline in earnings per share for the third quarter. The logistics giant pointed to a sharp run-up in diesel fuel prices and driver-related expenses as the primary culprits, flagging $25 million in incremental driver-related costs and at least a $10 million sequential fuel headwind. The warning implies third quarter EPS of $1.77 at the midpoint, roughly 16 percent light of the current $2.10 consensus estimate. While JB. Hunt characterized the cost inflation as more cyclical than structural and continues to see really strong demand across all businesses, the timing is particularly painful because 96 percent of its operating income comes from intermodal and dedicated units that are slow to capture rate inflections. Over in the private fleet sector, the persistent driver shortage is fundamentally rewriting the playbook for safety management. With qualified truck drivers, difficult to replace and accident litigation increasingly expensive, private fleets are putting greater emphasis on developing the drivers already behind the wheel, rather than simply dismissing struggling performers. At DOT Foods, which operates nearly 2,200 trucks across the US and Canada, that strategic shift has meant moving away from a largely reactive safety model toward one increasingly based on data, technology and patterns of driver behavior. The company focuses heavily on roughly the bottom 10% to 20% of its driver population, requiring drivers scoring above 70 on its to 100 scale to have a professional development plan. As of the week before the International Food Service Distributors Association's 2026 Solutions Conference in San Antonio, only about 30 DOT drivers had scores above 70, down substantially from when the program began. Finally, a troubling bottleneck is emerging at the nation's busiest port complex, even as local truck operations remain remarkably fluid. Rail-destined cargo dwell at the Los Angeles-Long Beach Gateway rose to 6.75 days in August, from 6.34 days in July, according to the Pacific Merchant Shipping Association, extending a period of elevated intermodal dwell as the ports handled near record 1.88 million 20-foot equivalent units. Meanwhile, average local truck dwell improved slightly to 2.95 days from 3.03 days in July, remaining broadly consistent with the sub-three-day levels recorded over the past year. The divergence between truck and rail dwell highlights the critical importance of intermodal performance to overall cargo fluidity as a significant share of containers arriving at the gateway is destined for inland US markets, making the reliability of on-dock and near-dock rail service a key factor in terminal productivity.