FreightWaves Today

Aifleet is cutting its fleet size from approximately 180 trucks down to about half and letting go of nearly 100 personnel, triggered by the abrupt termination of a contract with a key supplier.

The air cargo market is facing its own shock following a tragic crash, resulting in the temporary grounding of MD-11 freighters by both UPS (27 planes) and FedEx (28 planes) as a precautionary measure, following Boeing's recommendation. Since the MD-11 makes up about 9% of both companies' main fleets, this temporary loss of lift creates significant capacity tightness systemwide heading into peak season.

Simultaneously, U.S. tariff policies are forcing real, fundamental supply chain changes, with IKEA, for example, estimating over $400 million in additional tariff-related costs this year alone. This pressure is accelerating nearshoring efforts, with Mexico emerging as the strongest beneficiary, evidenced by investments like Motherson putting $50 million into a new auto parts plant and Kuehne+Nagel expanding its cross-border infrastructure in El Paso.

Looking overseas, the shift in sourcing is accelerating the decline in container import volumes, which are now projected to keep falling into early 2026, with December expected to be down almost 18% year-over-year. Meanwhile, the Suez Canal Authority, whose revenue plummeted 60% this year, is offering a 15% discount on tolls, hoping that stability returns and ships start coming back through the Red Sea in the new year. Finally, carriers must be cautious about immediate operational risks, as early blizzard conditions are severely hitting Chicago and the Midwest, causing major delays and poor visibility, especially around I-57.

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Aifleet is undergoing drastic cutbacks, reducing its fleet from about 180 trucks to a much smaller, undisclosed number, following the abrupt termination of a contract with a key supplier. CEO Marc El Khoury described these fleet reductions as "drastic," but necessary to allow the company a chance to survive in the freight recession, enabling them to pivot almost entirely away from the spot market and focus on a contracted freight model.

In air cargo news, UPS and FedEx halt MD-11 flying to conduct safety review after a fatal crash in Louisville last week, following a recommendation from manufacturer Boeing to conduct a safety review and engineering analysis. This grounding affects approximately 9% of their mainline fleets, with UPS operating 27 and FedEx operating 28 of the 70 MD-11 freighters currently in service, though both carriers are using contingency plans to mitigate disruption.

The logistics sector is also feeling the impact of capacity constraints caused by the long-running government shutdown, which led the FAA to order airlines in high-volume markets to reduce schedules by up to 10%. Businesses relying on passenger aircraft for domestic freight transport have the most exposure to these flight restrictions, while cargo-only airlines are collaborating with the FAA to adjust operations and minimize customer disruption.

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The FAA has mandated flight reductions—ramping up toward a 10% cut at 40 of the busiest domestic hubs due to air traffic controller shortages—which severely restricts domestic "belly cargo" capacity for high-value shipments but largely spares all-cargo carriers like FedEx and UPS.

The ground market is defined by a financial squeeze hitting 3PLs like RXO, who are struggling as locked-in, lower contractual sales rates are undercut by suddenly spiking buy rates for trucks, evidenced by the National Truckload Index climbing from $1.68 per mile to $1.80 more recently. RXO's CEO calls this structural capacity exit—driven by tighter regulations and spiking insurance costs forcing smaller carriers out—one of the largest structural changes since deregulation, prompting the company to execute $165 million in total cost cuts and rely heavily on technology to achieve a 19% boost in broker productivity.

We pivot to the ocean sector, where Maersk upgraded its full-year EBITDA guidance ($9.0-$9.5 billion) despite facing a jaw-dropping 30.7% year-over-year decline in Q3 freight rates, a success attributed to superior operational execution, 7% container volume growth, and an integrated network that provides a "better moat" against spot volatility. Finally, we track localized labor pressure, including over 900 supply chain layoffs in Texas across diverse sectors like crude oil transport, and monitor the rigorous, impartial review promised by Surface Transportation Board nominees for the massive proposed $85 billion Union Pacific/Norfolk Southern merger.

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A federal appeals court has reinstated Yellow Corp.'s $137 million lawsuit against the International Brotherhood of Teamsters, overturning a previous dismissal by a lower court. The former LTL carrier can now amend its complaint against the union, which it claims deliberately blocked the "Yellow One" restructuring plan necessary for the company’s survival.

The latest U.S. Bank Freight Payment Index shows a strong reversal in the freight market, with national shipment volumes falling 2.9% while shipper spending paradoxically increased 2% in the third quarter. This ongoing divergence, where shippers are paying more for moving less, suggests that carriers are continuing to exit the market, contributing to capacity constraints.

Additionally, new bipartisan legislation introduced in the Senate aims to broaden human trafficking bans as they apply to truck drivers and extend permanent restrictions to workers in the rail, maritime, and air sectors. This proposed bill, the TRAFFIC Act, would broaden the scope of disqualification by removing the requirement that the felony was committed using a commercial vehicle.

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We begin with the tragic UPS cargo jet crash near Worldport in Louisville, UPS's critical global hub, which resulted in at least nine confirmed fatalities and exposed the fragility of single-point logistics assets.

This immediate physical disruption led UPS to cancel initial express and deferred operations and suspend the money-back guarantee for all US packages, even as the NTSB worked quickly to recover the flight recorders. Following the accident, night sort operations at Worldport partially resumed to enable next-day air deliveries, though delivery commitments were relaxed for Thursday.

Wall Street severely reacted to 3PL RXO’s Q3 earnings report, sending the stock plummeting over 14% pre-market after the company reported adjusted net income of just $2 million compared to $7 million last year and missed analyst estimates on EPS. RXO’s CEO cited a "deadly combination" of rising truckload capacity costs alongside persistently weak demand, forcing the company to launch aggressive new cost initiatives targeting over $30 million in savings.

Broader market data confirms this complex landscape, revealing a persistent trucking paradox where Q3 national shipment volumes fell 2.9% but shipper spending paradoxically increased 2% quarter-over-quarter, suggesting that capacity is leaving the market faster than demand is declining. This divergence grants remaining carriers unexpected pricing power, while regional differences were severe, including a massive 15.7% volume drop in the Southwest amplified by stricter DOT English language proficiency rules.

Further underscoring the market weakness, recent CarrierSource data shows shipper search activity for trucking capacity fell to its lowest point in over a month, driven by macroeconomic uncertainty and production slowdowns. In response to this volatility, global terminal operator DP World is focusing on resilient supply chains by leveraging its vast network across 78 countries and strategically investing in technology, particularly AI and predictive tools.

DP World is offering adaptive solutions such as deploying "pop-up warehouses" for temporary surge capacity in locations like Olive Branch, Mississippi, and Miami, and strategically using alternative gateways like Prince Rupert and Vancouver for fast rail access into the US Midwest and Northeast. These strategies emphasize building options and flexibility into the network to navigate volatility, whether it stems from physical crashes or financial squeezes.

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The episode opens with the volatile reaction on Wall Street to 3PL RXO's third-quarter earnings, which saw the stock plummet over 14.8% in pre-market trading after the 6:30 a.m. The logistics provider reported performance that was largely stagnant year-over-year, including a decline in adjusted net income to $2 million and a GAAP net loss of 8 cents per share, prompting the CEO to emphasize strategic scale and cost initiatives for future profitability.

We also cover the ongoing disruption at UPS Worldport in Louisville following the deadly cargo jet crash that happened on Tuesday. Although night sorting operations resumed Wednesday evening to enable next-day air deliveries for Thursday, UPS has relaxed delivery commitments, extending some time-definite services by 90 minutes or 72 hours due to the continuing investigation and resulting runway closure.

National Transportation Safety Board investigators have successfully recovered both the cockpit voice recorder and the flight data recorder from the MD-11 freighter. Authorities have confirmed 12 fatalities from the incident, including the three crew members, as investigators work diligently to determine the probable cause and minimize slowdowns to the critical freight network, which moves life-saving drugs and postal products.

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The October Logistics Managers' Index data, detailed in the article October LMI shows price increases outpacing capacity growth, shows transportation utilization (57.3) and pricing (61.7) surged, reversing the prior negative freight inversion.

This tight market prediction is worsened by the immediate air cargo capacity shock stemming from the UPS MD-11 crash on November 5th, a tragedy covered in LATEST: Death toll in UPS cargo jet crash rises to 7. This incident led to seven confirmed fatalities and resulted in the indefinite closure of the Louisville Muhammad Ali International Airport and the complete halt of UPS Worldport operations.

Regulatory pressure is further squeezing the driver pool through the FMCSA’s new non-domiciled CDL rule, which prevents Ukrainian war refugees from renewing legally obtained licenses, a complex issue explored in CDL overhaul tailspins Ukrainian truckers. Meanwhile, labor friction is mounting as the Teamsters union accuses UPS of violating its contract by diverting delivery work to non-union gig drivers at subsidiaries like Roadie and Happy Returns, a conflict covered in Teamsters union to press UPS over Roadie use of gig drivers.

Shifting focus to corporate performance, Uber Freight revenue flat in Q3 as company posts strong delivery gains reports the freight unit's Q3 revenue remained flat at $1.31 billion and incurred a loss, even as Uber’s overall mobility and delivery divisions saw strong growth and record adjusted EBITDA. Conversely, TFI CEO Alain Bedard anticipates a weak fourth quarter, yet offers a strongly positive long-term outlook, particularly for 2026, due to operational improvements in LTL and potential infrastructure impacts, as detailed in TFI’s Bedard sees a stronger 2026 after a weak 4Q.

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Details emerge on the devastating UPS MD-11 freighter crash that occurred during takeoff from Louisville, Kentucky, while the widebody cargo jet was bound for Honolulu. The death toll has tragically risen to seven individuals, with 11 injuries reported, leading to the indefinite closure of the Louisville Muhammad Ali International Airport and the halt of package sorting operations at Worldport.

The Panama Canal Authority is moving full steam ahead with an $8.5 billion, 10-year modernization plan designed to maintain the canal's competitiveness as climate pressures and global trade patterns evolve. This strategy includes constructing two new container terminals, implementing a liquefied petroleum gas pipeline, and initiating the Río Indio reservoir project, all aimed at expanding capacity and reducing dependence on water-intensive operations.

Finally, we discuss the ongoing labor tensions between UPS and the Teamsters union regarding alleged contract violations, which is explored in Teamsters union to press UPS over Roadie use of gig drivers. Teamsters Local 804 claims that UPS is improperly diverting partial delivery work to its subsidiary, Roadie, which uses a technology platform to match freelance drivers to packages, thereby violating their 2023 collective bargaining agreement to avoid safety laws and overtime payments. UPS denies the accusation, maintaining that Roadie and Happy Returns operate distinct business models for specialized deliveries that do not mix with the main UPS parcel sortation network, though the Teamsters' national office is consolidating grievances for arbitration.

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For-hire trucking capacity is contracting significantly due to a 32% reduction in tractor builds (taking equipment below replacement levels) and stricter FMCSA English Language Proficiency enforcement, which could affect up to 10% of the driver pool.

Despite shrinking capacity, freight rates are only seeing marginal spot market improvements of 1-2%, failing to keep pace with 3% inflation, due to volume volatility and broader macroeconomic risks. Regulatory friction is also widespread, as a federal judge issued a preliminary injunction blocking the California Air Resources Board from enforcing its Clean Truck Partnership against major OEMs (like Daimler, PACCAR, and Volvo). This legal development was driven by the judge's conclusion that CARB's lawsuit was attempting to enforce potentially federally preempted standards, creating an "impossible situation" for manufacturers after federal waivers for rules like the Advanced Clean Truck rule were withdrawn.

In stark contrast to regulatory tangles, technology offers surprisingly frictionless solutions: fleets using complete AI safety solutions saw a 73% reduction in crash rates over 30 months, nearly double the industry average. Within just six months of implementation, these systems also achieved a 49% drop in harsh driving events and an 84% reduction in mobile phone use behind the wheel, alongside a 57% boost in Hours of Service compliance.

Serious, hyperfocused investment is flowing into specialized logistics globally, notably in air cargo where Cargojet launched a new direct weekly service connecting its Canadian hubs to Liege Airport in Belgium. Latam Cargo also boosted its Europe-South America capacity by 25% (reaching 15 weekly frequencies), adding specialized routes like São Paulo to Brussels with a stop in Recife to handle mango exports.

Domestically, TRAC Intermodal is focusing on standardization and efficiency by partnering with Florida East Coast Railway to stage standardized, GPS-integrated 53-ft domestic chassis directly at FEC terminals, aiming to build a national footprint for their T-53 program. Meanwhile, UPS completed its $1.6 billion acquisition of Andlauer Healthcare Group to strengthen its specialized Canadian cold chain and accelerate its strategic goal of doubling high-margin healthcare logistics revenue to $20 billion by 2026.

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A federal judge issued a preliminary injunction stopping the California Air Resources Board from enforcing the Clean Truck Partnership against truck manufacturers. This block occurred because a state court lawsuit filed by CARB seeking OEM compliance was viewed by the federal court as an attempt to enforce potentially preempted zero emissions standards, particularly since Congress withdrew the EPA waivers that allowed the Advanced Clean Truck rule to go into effect.

UPS has completed the acquisition of Canadian logistics provider Andlauer Healthcare Group for $1.6 billion in cash. Michael Andlauer, AHG's founder and CEO, will now lead UPS Canada Healthcare and AHG, significantly bolstering UPS’s specialized cold chain network and strategic focus on the high-margin healthcare sector.

Learn how AI is reshaping fleet operations with the release of Samsara’s Safety Report: Benchmarking the Future of Safety. The report reveals that fleets implementing complete AI safety solutions saw a 73% reduction in crash rates over 30 months, with visibility and immediacy provided by dual-facing dash cams being identified as the biggest difference-maker.

Don't miss today's FreightWaves TV lineup, including an episode of Loaded and Rolling with Thomas Wasson and Check Call with Mary O'Connell. You can always find your favorite FreightWaves shows on the FreightWaves YouTube channel if you miss the live broadcast.

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