🚚 Warning Signs
Freight Day! 👋 The latest Logistics Managers' Index (LMI) shows growth continuing, but some early signs of softening are starting to emerge.
While transportation capacity, utilization, and pricing all saw gains, a significant dip in utilization towards the end of the month signals potential challenges ahead. The LMI's increase to 58.8 indicates improvement, but the underlying shifts suggest a market that’s not as steady as it seems. More ahead 👇
💬 More in Freight:
⚫️ Active Freight Brokerages Decline
⚫️ FMCSA Is Doing Nothing About Fraud, Fake Addresses
⚫️ May CVSA Blitz Week Upcoming
⚫️ Drivers Win $10M Verdict
Freight Brokerage Declines Continue 📉
The year-over-year decline in active freight brokerages slowed in April 2025, with a net loss of 92 brokerages—a drop of 8.1% from April 2024. The total number of active freight brokers now stands at 24,995, marking the first time the count has fallen below 25,000 since April 2021.
In Q1 2025, 937 new brokerage authorities were granted, while 1,317 were revoked. I’ll share more detailed quarterly stats on granted and revoked authorities later this week.
As of 5/1/2025:
- 6-Month: -3.0%
- 1-Year: -8.1%
- 2-Year: -18.0%
- 3-Year: -16.3%
- 4-Year: -1.1%
- 5-Year: +16.6%
FMCSA Is Doing Nothing About Fraud, Fake Addresses ❌
A trucking fraud expert says the Federal Motor Carrier Safety Administration (FMCSA) isn’t doing enough to stop companies from using fake addresses to hide their operations.
Dale Prax, owner of Freight Validate, which monitors fraud in the trucking industry, says many carriers use virtual addresses or PO boxes to evade federal oversight. One California office building, for example, is listed as the address for nearly 700 trucking companies—500 of which share the same phone number and email: WTFFMCSA@aol.
Prax reported the issue to FMCSA two years ago but says nothing has changed. FMCSA responded that the Signal Hill address belongs to a legitimate motor carrier consultant but warned that PO boxes or virtual addresses without a real connection to a business won’t be accepted as valid.
“If we all know about it and reported it, why isn’t anything being done?” Prax asked.
Prax also pointed to a Dallas address used by 20 trucking companies, which is actually a virtual mailbox service. A staffer there confirmed, “We just handle mail. No one works here physically.”
Prax says the use of PO boxes and virtual addresses by trucking companies has surged since 2023, calling it “a red flag.”
TOGETHER WITH ROSE ROCKET.
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What Else Is Moving 🚚
Warning Signs: April LMI Trends 📊
The latest Logistics Managers’ Index (LMI) for April shows a transportation market still expanding, but flashing some early warning signs. The LMI, which measures supply chain sentiment (with readings above 50 indicating growth), highlighted steady gains in capacity, utilization, and pricing, though shifts beneath the surface hint at softening ahead.
Transportation capacity rose to 55.2 in April, up 1.6 points from March. Utilization ticked up slightly to 53.3 but fell sharply toward the end of the month, dropping to 45.9—the lowest since November 2023. Transportation prices climbed to 62.3, rising 5.8 points even as utilization weakened. Overall, the LMI recouped some ground, rising to 58.8 after a steep drop in March.
Capacity Grows, but Utilization Wobbles
The report noted that the “negative freight inversion” seen in March—where capacity outpaced pricing—did not continue into April, keeping the market technically in expansion. However, the sharp drop in utilization late in the month suggests that market softening may continue into summer.
One clear trend: downstream (retail) sentiment remained much stronger than upstream (wholesale). Downstream pricing sentiment surged to 71.2, while upstream pricing came in lower at 58.3. This divide signals that while B2B freight is showing cracks, retail-driven demand is still holding firm.
💬 “The transportation market has remained resilient through early 2025,” the report said. “But with a slowdown in imports on the horizon, it remains to be seen whether this momentum will continue through the summer.”
Inventory Costs Climb as Stock Builds Cool
Inventory levels continued to expand, landing at 57.1, but at a slower pace compared to March, a sign of a return to normal seasonal patterns after Q1’s tariff-fueled stockpiling. The bigger story: inventory costs shot up to 75.6, while warehousing prices surged by 11.2 points to 72.3. This disconnect—rising costs even as stock growth slows, reflects how much freight remains stagnant in storage, driving up warehousing expenses.
Warehouse capacity posted moderate growth, rising to 55.4, but the trend points to a market where inventory is sitting longer and costing more to store.
Key Takeaway: Rising warehousing costs are a clear pain point to watch, as high stock levels continue tying up capital.
One-Year Outlook: What’s Coming Next
Looking ahead, supply chain managers expect:
- Capacity Growth: 53.4 (moderating pace)
- Pricing Growth: 72.3 (strong expansion)
- Downstream Inventory Costs: Record-high 94
- Upstream Inventory Costs: 70.6 (significant increase)
💬 “We may see dynamics similar to past freight downturns, with weaker upstream activity and steadier retail-driven downstream demand,” the report noted, drawing comparisons to the freight recessions of 2019 and 2022, where retail strength offset B2B slowdowns.
Why It Matters
The April LMI underscores a transportation market that’s holding its ground but facing some pressure points:
- Retail demand remains strong, keeping pricing and utilization from dropping too fast.
- Upstream softness signals caution, especially for brokers and carriers serving B2B clients.
- Warehousing and inventory costs are rising fast, squeezing margins and creating challenges for anyone storing large volumes of freight.
With import slowdowns looming and tariffs reshaping freight flows, the next few months could reveal whether this resilience holds, or if deeper softness starts to set in.
FREIGHT SNIPPETS ✂️
⚡️ C.H. Robinson Earning Surge | C.H. Robinson reported a 45.6% jump in Q1 2025 earnings despite lower revenue, the company announced April 30. Net income rose to $135.3 million from $92.9 million a year ago. Revenue fell 8.3% to $4.05 billion. Analysts had expected $1.02 per share on $4.31 billion in revenue. North American Surface Transportation revenue fell 4.4% to $2.87 billion, while Global Forwarding revenue dropped 9.8% to $774.8 million. Still, operating income rose 31.9% and 36.1% in those segments, respectively. Bozeman cited AI and automation investments, along with efforts to diversify supply chains amid trade uncertainty. Susquehanna noted C.H. Robinson’s strong execution but warned Global Forwarding may face headwinds in Q2 and Q3 due to lower China shipments. Read more.
🔋 Rivian Investing $120M | Rivian will start production of its new R2 SUV in Normal, Illinois by early 2026, shifting from its planned Georgia factory to speed up the launch. Construction of the Georgia plant was paused to save $2.25 billion but will resume in 2026 with help from a $6.6 billion Department of Energy loan. The facility is now slated to open in 2028, while production in Normal will continue. Illinois is providing $16 million in incentives, with Rivian required to invest $119.6 million and create 93 jobs. Read more.
🔔 31% Drop In Volumes | Universal expects logistics volumes to rise with the auto industry’s rebound. CFO Jude Beres said March auto production jumped 67% from January, though inventories have fallen 40% amid tariff concerns. Universal is advising customers on reshoring and touting its U.S. footprint, including Westport Machining in Louisville and expanded warehouse capacity near key ports. Two U.S. assembly plants it serves are also boosting production. Outside automotive, Universal is betting on its heavy-haul wind division to drive 2025 trucking revenue. Despite a 20% YoY trucking decline, revenue per load rose 24% due to a focus on specialized freight. Read more.
TOGETHER WITH CARRIERSOURCE.
GFS Group LLC: Review Of The Week 🏆
This week, we spotlight GFS Group LLC, a trusted freight transportation company based in Saint Peters, MO. With a fleet of 140 trailers, GFS Group specializes in providing reliable and efficient cargo transport services across the lower 48 states. Known for timely and secure deliveries, their team and modern fleet handle a wide range of freight needs. GFS Group has earned a 4.7/5 rating on CarrierSource from 6 reviews.
DOT Number: 3542116
Headquarters: Saint Peters, MO
Fleet Size: 140
🚔 Blitz Week | The Commercial Vehicle Safety Alliance’s (CVSA) 2025 International Roadcheck is just around the corner. Set for May 13–15 across the U.S., Canada, and Mexico, this annual inspection blitz will focus on drivers’ records of duty status (RODS) and vehicle tires, CVSA announced in February. Inspectors will conduct the full 37-step North American Standard Level I Inspection, covering driver requirements and vehicle mechanical fitness, with extra attention on RODS and tire compliance this year. Read more.
💰 $2 Billion Operations Expansion | Kimberly-Clark announced Thursday it will invest over $2 billion in its North America segment over the next five years to expand U.S. manufacturing and modernize its supply chain. Plans include $800 million for a new advanced manufacturing facility in Warren, Ohio, and $200 million for an automated distribution center in Beech Island, South Carolina. The rest will fund innovation and automation upgrades across North American sites. Read more.
🚨 Truck Stop Raided | The Alcorn County Sheriff’s Office raided the 45 Truck Stop in Corinth, Mississippi, after complaints of illegal substance sales. Deputies seized 27 bottles of ZaZa White (linked to Tianeptine) and over 3,500 Sildenafil (Viagra) tablets. Clerks were cited, and owner Adel Ahmed Bader turned himself in April 29 on possession and distribution charges before being released on bond. Read more.
Pallets of News 🚛
Freightmate Moves To Dismiss Lawsuit 🏛️
Freightmate AI has moved to dismiss Flexport’s copyright infringement lawsuit, calling the claims baseless. In its April 22 filing, Freightmate argues Flexport’s accusations of trade secret theft and copyright infringement don’t show the company’s direct involvement—focusing instead on alleged actions by former Flexport employee and Freightmate co-founder Jason Zhao.
“Flexport never should have named Freightmate,” the filing states, arguing the complaint offers little detail about Freightmate itself.
Zhao left Flexport in June 2024, and Freightmate contends the company was incorporated after his departure, with product development starting only afterward—without using Flexport’s data.
Flexport’s lawsuit, filed in the Northern District of California, alleges Freightmate built a competing product using stolen trade secrets. Freightmate denies the claims, saying its technology is “distinct from Flexport.”
A hearing is set for early June 2025.
Drivers Win $10 Million Verdict 💰
RSP Express Inc. has been hit with a $10.46 million judgment after about 100 truck drivers sued over unpaid cross-border freight compensation.
A Michigan federal judge awarded $3.5 million in damages, tripled under the RICO Act. The drivers, represented by attorney Keith Flynn, said they were promised 80% of gross revenues but were underpaid when third-party carriers handled international legs.
Judge Gershwin Drain ruled the contract covered all freight hauled by the drivers, regardless of third-party involvement, and found RSP underreported gross revenues, defrauding the drivers.
MEME OF THE DAY 😂
📍 Upcoming events: Catch up with us at Home Delivery World in Nashville on May 21-22. Let us know if you’ll be there – we'd love to connect!
