FreightWaves Today | September 29

Craig (0:24)

Welcome to FreightWaves Today. It is Tuesday.

Julie, we're at the end of September, end of the third quarter. We're headed, October is really the start of peak season. So, what are thoughts at the end of this quarter?

Julie (0:38)

We'll talk about it a little bit in the Sonar Update, but I mean, thoughts are, just because the market is steady, right?

Craig (0:46)

Stable.

Julie (0:47)

Stable, volumes are holding up, rejections are kind of holding, doesn't mean it's loose, right? I mean, and I think that that's part of, you're coming off of a frame of reference of the summer, tender rejections being so high, so 14% feels like, oh, 14% is not that high. It is still quite high, right? So I think that that's sort of the story on the free market right now, is that while it's kind of steady, it doesn't mean it's loose, right? And when you compare it to last year, and really the last three years, we're still in a much healthier place than we have been.

Craig (1:17)

Yeah, I think the question is, as we go into October, are we gonna see a big peak season? Is it gonna be muted? Different schools of thought, and we're gonna get into that on our Center Update. In studio, we have David Parker, the founder and CEO of Covenant Logistics Group. In fact, he brought an entire audience, guys. Let's get a hand for everybody in the audience.

This is our largest in-studio audience that we've ever had. The entire sales team from Covenant is here. We're gonna hear from David Parker about his thoughts on market conditions, what's going on around the market. Always a lot of personality, a lot of opinion on the market, so David is always unfiltered, which I love. I loved having founders on the show.

Julie (2:04)

So much information.

Craig (2:05)

Yeah, it's fantastic. So here in Chattanooga, here in studio. And then we are bringing in Dr. Miller for another conversation about his perspective on the market. Usually has a contrarian take or a different take than what we talk about. So we're going to hear what he thinks about the overall freight economy.

I think all of the attention is on energy right now, Julie.

Julie (2:30)

Yeah, and diesel. Yeah.

Craig (2:32)

Yeah, I mean, that is-

Julie (2:33)

Specifically diesel, yes.

Craig (2:34)

That is what it's all about right now. And I think the question is, where do we go from here? Interesting is energy shipments, oil shipments out of the Middle East are actually largely have returned to their pre-war levels. Iran is not shipping anything. That is an interesting sort of geopolitical development. But I guess for the fourth quarter, it's all about energy. What does that mean for the consumer? What does that mean for the overall economy? We have an election coming up. All of this stuff is happening in the next couple of weeks.

Julie (3:00)

What does it mean for carriers, right? And the additional pressure it's putting on carriers as well.

Craig (3:03)

Absolutely. So lots to talk about. Let's get into the headlines.

Julie (3:07)

We kick things off with a fierce regulatory fight brewing in the engine manufacturing world over a controversial loophole in next year's nitrogen oxide emission rules.

Daimler Truck North America is publicly resisting proposed non-compliance penalties that would allow engine manufacturers to simply pay fines rather than meet the drastically tighter NOX standard of 0.035 brake horsepower hour that takes effect in 2027 The concern centers on comments from Packard's CEO, who suggested on a recent earnings call that paying the penalties of $6,000 to $7,000 per engine might be an acceptable business strategy, especially when estimates suggest that engineering a fully compliant engine could cost as much as $15,000.

Daimler officials argue this contravenes what Congress intended, turning what should be a punishment for technological inability into a calculated economic decision. The Engine Manufacturers Association backs Daimler's position, warning that companies like Daimler that invested heavily in compliance technology over the past decade could see those investments and jobs put at risk.

Meanwhile, in the freight technology sector, a potential blockbuster sale remains in limbo, as Trimble keeps all options on the table. Speaking Monday at the company's Insight 2026 conference in San Diego, CEO Rob Painter confirmed that multiple outside parties remain interested in Trimble's transportation and logistics business, but offered no timetable or indication that a sale has become more likely. Trimble disclosed in August that it had received credible, unsolicited interest from multiple parties and launched a strategic review with financial advisor Goldman Sachs. Painter characterized the transportation unit as a scarce asset with distinctive network and technology capabilities, but emphasized the company is operating the business as usual and remains super, super comfortable to be the ongoing owner. He left open the possibility that the review could result in a spinoff rather than a sale, saying its purpose is to determine what would be best for customers, employees and shareholders. Despite the uncertainty, Trimble continues to invest aggressively in the business, unveiling new AI-powered tools including ArcAgent, a single AI agent capable of acquiring multiple skills across freight processes. Finally, a critical gap in the US-China trade truce is leaving shipping lines in regulatory limbo over massive port entry fees. US port entry fees targeting China-linked and China-built vessels remain scheduled to resume November 10th, even after Washington and Beijing agreed last week to extend their broader trade truce until January 10th, 2027 The fees, which stem from the US Trade Representative Section 301 investigation into China's maritime policies, were suspended for one year beginning November 10th, 2025, as part of the broader economic detente. Under the original fee schedule, covered Chinese vessel operators and Chinese-owned vessels faced a $50 per net ton fee, while non-Chinese operators using Chinese-built vessels would face the higher of $18 per net ton or $120 per discharged container. The discrepancy leaves liner operators and cargo interests awaiting a formal USTR action that would align the maritime fee suspension with the newly extended diplomatic accord, as no formal notice extending the fee pause had been issued as of September 28th.