Trucking Market Outlook: Rates, Trends & Regulatory Impact

The below transcript has been generated by an AI system and may contain inaccuracies, errors, or omissions. While efforts have been made to ensure the accuracy of the content, the AI-generated transcript should not be considered fully reliable or definitive record.

Adam Parish

Hello, everyone, and thank you for joining today's webinar, trucking market outlooks, rates trends, and regulatory impact. My name is Adam Parish, and I'm the director of trucking procurement here at Flexport. We have a lot of content to cover, but before we get begin, I'd just like to go over a few housekeeping items. So first on your screen, you'll see a sidebar to the right of the main stage, where you can submit questions. At the end of the presentation, we'll host a q and a and answer a few audience questions, so be sure to get them in early. And then in the same sidebar, you'll also see a tab labeled doc. So this is where you can download a copy of today's slides, and find other helpful resources as well. And so now for just a brief legal note, please keep in mind that all information provided in this session is based on the situation at this current time and may not be customized to your specific business requirements. We always recommend reaching out to a Flexport expert to discuss your particular situation. And joining me today are my colleagues, Jake Carlson, head of trucking brokerage, and Kristen Johnson, senior director, head of legal for North America here at Flexport, who, by the way, I know is very proud of me for delivering the prior disclaimer. And needless to say, the three of us are living in this market day in and day out. So we're excited to share some valuable insights that'll help you understand and really plan for the the market dynamics going forward. And so here's today's agenda. We're gonna kick things off covering, regulatory impacts in the industry into the trends we've seen in the first half of the year, followed by why capacity is tightening, the impact on drayage and intermodal, which is also very important, and then finally, some consultative thoughts on, you know, how we see customers, you know, should should respond to the situation and engage with the market going forward. So here's what you need to know today. Freight demand is returning, and it's hitting a market with a structurally much smaller capacity base. Right? So fewer trucks on the roads, tighter regulations, and higher operating costs, which is, of course, a formula for, you know, a a market cycle that's very different from the last few. We definitely don't see this one as a short term blip. Instead, this cycle has real staying power. And so before I hand it off to Kristen to walk us through the regulatory side, I do wanna make mention that while Flexport operates trucking globally across, you know, North America, Europe, Asia, and and the global markets, today's focus is solely on The US market because that's really where the main pressure points are right now. And I also wanna make mention that, you know, Flexport hosts a lot of webinars quite regularly. And, you know, often we thread sort of trucking affairs throughout the conversation, but we really have not done a webinar in this form and manner since COVID. So I just wanna draw attention to, you know, the magnitude of of sort of what's happening in the market and why we wanted to do, a webinar at this point in time, just because, obviously, the dynamics, like I said, are structural and are changing in a way that is affecting, you know, not just, you know, certain areas of the business or certain, you know, you know, client base, but but, really, the the whole industry at large. So, Kristen, I'm going to hand it over to you.

Kristen Johnson

Alright. Thank you, Adam. Well, this is a pretty exciting time where legal and regulatory news seems to be dominating the headlines lately. And, it can it can stir a lot of noise. It can also generate a lot of confusion. So I'm hopefully going to help clear up some of the confusion and go over some major regulatory drivers of change in The US trucking landscape that we're seeing these days. Alright. So three major headlines we've seen coming out of the courts and the administration recently. The big one, I'm sure most of you, if you're in the industry, are aware, there's been a lot of conversation around broker and shipper liability, so I'm going to cover some of those topics. Also, big efforts to reduce carrier fraud, enforcement of, ID verification and use of technology to connect the dots and try to root out carrier fraud. So I'll discuss that and the way that the administration and the Federal Motor Carrier Safety Administration, FMCSA, has been handling that. In addition, we've seen, a real uptick in CDL enforcement efforts, and so I'm gonna cover that. But first, let's talk about, the big headline news because, trucking in the courts is pretty exciting. And we've seen a lot of, a lot of cases coming down recently, a big one out of the Supreme Court, Montgomery versus Caribe Transport. I'm not gonna spend a ton of time going over this case because I think that the news cycles kinda took care of that. But I wanted to give, I'll I will give a little bit of an overview as to why that case why I think that case was very important and why the conversation that has spurred from that case is very important. And I also wanna add that, you know, despite some of the the headlines that we saw, in my view, Montgomery was not a sudden death knell to the industry or something that, you know, changed everything in the way that brokers and shippers should be looking at selecting motor carriers. I think there were a lot of, clickbait headlines out there. But, really, what it was is it was a decision that gave us, confirmation of how the courts are viewing broker and shipper roles when we have a pretty light regulatory framework on what carriers, brokers, and shippers are. And so it clarified where the what where the responsibility falls in selecting a carrier. So very briefly, Montgomery and the other broker liability cases, they ask the question of when is a broker or in some circumstances, a shipper liable when a carrier causes damage, when they cause cargo damage or they they cause bodily injury. This is a really important question because if a lawsuit occurs, typically, a lawsuit will occur in the state where the injury occurred, and every state has different laws governing negligence and the exercise of care in selecting motor carriers. So, for example, if a broker is seated in California and they hire a trucking company company, a motor carrier in Florida, to go to Chicago and unwrote unwrote to Chicago, there's an accident in Georgia, what state law would apply there? Well, in that case, it's typically going to be Georgia state law. That's probably where the lawsuit happens, and then that negligence standard would apply to the broker and to the trucker even though they're all located in different states. And what that what happens with that is we have what what the lawyers call a patchwork of laws. We have all of the states with all of their varying standards. They're not, like, drastically different from one state to another, but there are different selection standards, and then there are different court cases interpreting those standards that develop over time. And so what may work in one state doesn't necessarily work in another state. And so now brokers, under the Montgomery decision, brokers are responsible for adhering to the laws of any state in which, a motor carrier they select gets into causes damage. And so we know now that we we we've known we've known all along that we have to pay attention to that because, actually, that was a law in about half the country before Montgomery went up. The reason Montgomery went up to the Supreme Court was because some courts were saying, yes. This is the the law, and other courts were saying, no. This is not the law. And so Montgomery is it just cleared up the issue for all all of the brokers and some shippers in the industry that when you're selecting motor carriers, yes, you are responsible for exercising reasonable and ordinary care in selecting those motor carriers, making sure that you're you're choosing someone who has, as best as you can tell based on the information available to you, a good driving record. And so, this shouldn't be a surprise to anyone, and brokers like Flexport and many other established brokers. This news, like, doesn't have a made major does not have major impact, because we already have selection processes and criteria in place. But the problem and the reason this is, like, really caught the attention of the news cycle, and organizations like the Transportation Intermediaries Association is that brokers by regulation don't have much ability to go beyond that public data. We don't, when it comes to carrier safety. Brokers, are not the ones that are choosing drivers. And actually, under the law, we're not legally responsible for managing driver data or getting driver records, pulling CDLs, things like that. That's the responsibility of the motor carrier, and there's a clear line of separation in the regulations that says that. So, it and and, actually, at the end of all of it, the FMCSA, the government is the legal entity that is charged with authorizing motor carriers to operate safely on the highways. So the whole industry is taking a deeper look at this, and, it's it's it's definitely causing people to go back and look at their carrier selection standards and ask, you know, what are what are we doing and how are we choosing our motor carriers? Another interesting case that came out right after Montgomery, like, right after it, was actually a state case in Texas where the Texas Supreme Court held, on the issue of shipper liability, which is closely connected to the Montgomery case because, there are many layers in the supply chain. There may be a shipper, broker, and a motor carrier down the supply chain. So the question is if there's cargo damage or if there's personal injury, is the shipper at top of the supply chain? Are they responsible for that selection? And this Texas Supreme Court said no. In that case, the law says that they're basically passive, actors in the transaction. They're passive shippers. So they do not have the same level of care obligation that a broker has in choosing a motor carrier, unless, and this is very important distinction, unless that shipper is actually the one that is selecting the motor carrier and they're not using a broker. So interesting to see the way the cases are coming out. But what's what's even more interesting is that now there has been industry attention and a push within with with the FMCSA to gain clarity on what exactly should those selecting motor carriers be looking to given that the information published to us is whatever is available by the published by the FMCSA. And so last week in the news cycle, we saw the Transportation Intermediaries Association formally petition the FMCSA in a rulemaking. And I thought what they, said is interesting, so I'll read it. They said this rulemaking is necessary because for years, freight brokers and shippers have operated with limited and in most cases, no reliable data that is probative of whether a federally licensed motor carrier should be treated as unsafe. For instance, more than 90% of motor carriers have no safety rating. Moreover, FMCSA has acknowledged that the data generated on their systems by the safety measurement system is used to prioritize potential interventions, but is not intended to imply a federal safety rating and should not be used to draw conclusions about a motor carrier's overall safety condition. In light of Montgomery, the TIA said to the FMCSA, it is now clear that brokers and shippers continue to face an untenable burden in attempting to evaluate, develop, and apply disparate methodologies and standards use using potentially suspect data in an effort to discern whether a federally licensed motor carrier will nevertheless be deemed unsafe according to judges and juries in every state and federal jurisdiction across the country. The determination of whether motor what motor carriers are safe to use properly rests with the federal government. And so we haven't seen how the FMCSA is going to respond to this petition. The TIA has actually asked for a high risk carrier list, which, you know, there's lots of discussion about whether that's a good idea or not, but we're gonna wait and see what the FMCSA has to say about that. On two other headline issues quickly, carrier theft and fraud issues have definitely been something that's, impacting the industry of late, and we have some very recent news. The FMCSA in May released a brand new a brand new system, called Modus. And it's it's it's had kind of a a difficult launch, but I think they're getting there. They're working out some of the kinks, and they're calling that a major step toward anti fraud efforts. The idea for Modus is that they're going to use government IDs and facial facial recognition to root out chameleon and zombie carriers. And what's really interesting from a broker and a shipper perspective is that the messaging around MODIS from the FMC FMCSA has been to improve data, for the FMCSA and for law enforcement, but we have not seen any mention of information being available to the public. So from from a broker's perspective, it's yet to be seen if this will improve data available to us, but, of course, we hope that it will. And then lastly, we've seen a significant amount of legal news surrounding CDL governance. There are two big ones to pay attention to. And my colleagues, Jake and Adam, they're gonna talk about the impact of some of this in the coming slides. And I think what I'm really doing here is, like, setting the table so you can see. Here's all the headline issues. Here are all the legal issues, the regulatory drivers that are then having or at least there seem to be, you know, some operational impacts, and we wanna share that with you. So on the CDL issues, the two big ones are English language requirements. The government has made a very big push to enforce the rule that CDL drivers must read English. This is definitely not a new rule, but the enforcement activity has been significantly stepped up. And we are also seeing some new regulatory activity. Just on June 24, the FMCSA submitted a proposed rule to the executive branch, the Office of Management and Budget. We haven't seen the text of what that rule says yet, but we expect that it will continue to place emphasis on, rooting out violators who are out of service. And the more that the the more that they're taking violators out of service, that'll obviously have an impact on capacity. And then, according to the data that we've seen, just in this past year since June 2025, 20,000 motor carriers have been placed out of service due to failures of the English language, requirements and the stepped up enforcement. So that has certainly removed some. Obviously, it's being done, you know, with with safety in mind. And, if you look at what secretary Duffy has been has been saying about the issue, he and the administration strongly believe that it's really important if you have drivers on the road to be able to read the signs and communicate in the English language, so that's why they're stepping up enforcement. And then the last thing that we saw in the news cycle, that actually came out from the American Trucking Associations and Mexico's National Chamber of Freight Commerce was that in addition to the motor carriers placed out of service, there have been another 20,000 visas revoked to Mexican CDL holders since April 2025. And secretary Duffy has addressed this saying he's working with CBP on enforcing the rules, and he's really he's especially fixated on, regulatory violations, so we expect those numbers to continue to rise. So on that note, hopefully, you all have gotten some new pieces of information from me. I'm gonna turn to one of our tried and true operators, Jake Carlson, who, heads up our Flexport Freight Brokerage and has some insights on how this is impacting the industry. Jake, I will turn it over to you. Thank you all.

Jake Carlson

Fantastic. Thank you so much, Kristen. Appreciate it. Hello, everyone. As Kristen just mentioned, my name is Jake Carlson. I oversee the domestic, freight brokerage, for us here at Flexport. And I'm joining us all today to talk a little bit about the front half of 2026, what we experienced so far, what some of the trends have looked like, how that's showing up in rates and and pricing, and then also talk a little bit about what we think we can expect for the back half of the year. So let's jump into it. I put together a very simple timeline here for us, put together with some headlines from our industry. Like so many of you, certainly those that are joining the webinar today, we do our best to try and try and stay connected to the news happening within our industry, the data coming out within the industry. And we do so for the specific reason of trying to understand within all the noise that's going on, what is the signal, and how can we think about that signal as we make decisions, In my case, specifically, when we make decisions around how we are booking freight with carriers, how we're working to deliver freight, for our customers, for our shippers. So with the with the benefit of hindsight, looking back here at the front half of the year and pulling together cherry picking some headlines here, it looks like the through line is pretty clear. I'll share and I'll talk a little bit more about this. I don't know that throughout the front half of the year, it always felt so clear, and it's very easy to find a lot of headlines that'll tell a different story than what I've pulled out here. But I did wanna just put together that if you were paying attention, if you were looking at the right places, and piecing together the right information, it has been out there. And, really, this is telling the story of of where we're going and where we've been, which is, in this case, the major headline, which Adam gave up top, which is we're seeing a shift in terms of, the pricing power. In this case, pricing power really shifting towards carriers, and that has some big downstream impacts on impacts on how we manage through, freight and manage for our shippers. So let's jump ahead here and look a little bit at some of those rates. So pulled together basic slide here. Here we are demonstrating the national average of dry van rate per mile. This is from DAT. We're showing that data with fuel and without fuel. I would say if you're coming to this data fresh, if you've not looked at this type of pricing information before, it looks like the trend line is very clear. You may say, yep. We gotta clear up into the right. It was probably pretty obvious as we went through this period of time what was going on. I wanna share that as someone who's living on the front lines of this, is working with carriers every single day, is is managing through booking this freight, it's not always clear. And and for me, looking at these last six months, I really think about three distinct kinda moments in time, and I'll and I'll break it up by two month increments. So looking at January and February, the experience that I recall and the experience that I had, on the front lines of this thing was really widespread severe winter storms. Whenever we get those winter storms, those operate as spike events. We see rate impacts to that. Obviously, there's moments when fewer carriers can be on the road. Maybe roads are closed. It can cause major disruption in our industry, especially when we have huge swaths of The US that are disrupted by those storms, which is what we saw in January and February. So when you're operating in that moment, it's not obvious necessarily what is a short term pricing spike. Is it gonna come back down, or is this the signal, you know, at the beginning of a different rate trend? But certainly in the moment, we were more focused on what was happening acutely with those storms, versus predicting that we were really kicking off a big run-in terms of pricing. When we move into March and April, certainly, the dominant theme was around fuel pricing. I I recall the specific conversations that I was having with Adam who kicked off our call here around how we were navigating fuel conversations with our carriers in that moment. It was a very difficult time for carriers to navigate with how sharply fuel prices increased. I think you kinda can't overstate, how intense that jump was from February to March. If you look at any of the data dating back, you know, over the last twenty years, it was one of the sharpest month over month changes in fuel prices, and we really felt it. And so, again, that's new noise into the system. How much of this is just purely a reactionary move related to fuel versus is there an underlying rate trend going on? And then finally looking at May and June, these last couple months, I think this is when it started to become clear more so what was going on. We certainly have continued to deal with elevated fuel rates, but we have also seen a stabilization in those fuel rates. So they're not continuing necessarily to climb. They've leveled out. In some cases, they've pulled back or in some regions, they've pulled back, but we are continuing to see the rates climb. And so it becomes obvious when you then look at this broader set of data over multiple months and and really piece back together what's been going on, what the trend is. The trend looks clear at this particular moment. But along the way, it didn't you know? I don't fault anyone that's on this call if it wasn't obvious to you what was happening along the way because there's there's a lot of noise in the system and a lot that can change these things. With that in mind, let's talk a little bit about what we expect to see in the back half of this year. So jumping into the h two predictions. I know for me, if I join a call like this, the last thing I wanna hear is a bunch of people hedge, and give thoughts on, hey. It could go this way. It could go this way. So I did my best to try and give some some real predictions here. I don't know if these are necessarily hot takes, but, they certainly share a specific, perspective on where we're going. So the first is do not expect capacity to snap back like it has in prior cycles. What we would expect if you see rates increase, for carriers is that we would see more carriers come into the system to try and take advantage of that rate and try and, you know, capture some of those funds that are moving into the carrier base. With that said, we may see pockets of that sort of thing happen, but I think given what we just walked through with Kristen, some of the regulatory environment, some of the different headwinds that carriers are facing, and also the change in liability and what that means for brokers and shippers in terms of how they think about what carriers they're gonna work with. There's a lot of reasons why we will not likely see a flood of carriers back into the system, at least not in a quick fashion. So over time, if rates hold high enough for long enough, we obviously will see carriers come back in. That's the natural progression of these things. In this case, the prediction is just that we don't think it'll happen as quickly as it has in prior cycles. Second piece up, fuel price reductions will not reverse the rate trends. We've seen this over the last couple months. Right? So as fuel price has stabilized or in some cases or in some regions has even pulled back, We have not seen that rate trend reverse. We've seen it continue to accelerate even. The the prediction here is even if we have some sort of event that causes a sharp decline in fuel rates, that is not gonna reverse the trend of what we see going on. In some cases, some people may even say that, the change that could happen with a sharp reversal in fuel rates could actually create a further gap between contract and spot freight, which could actually have the the inverse effect and further accelerate, what we're dealing with right now. And then finally, expect market disruptions to have increased staying power. So just like I was talking about January, February, those winter storms, for me, what I'm thinking about is heading into the back half of the year. We've got hurricane season coming up here. When we see those types of storms, they create obvious capacity constraints and rate spikes in those areas and for an acute period of time. What's been typical over the last few years is storm passes through, we may see a rate spike that carries on for two or three or four days. The prediction here is that those will have both increased and exaggerated effects, and they will linger for longer. So it used to be maybe a matter of days, is more likely in this environment to transition in a matter of weeks, really just because the capacity cushion has come out of the system. And so there's a lot of optionality for carriers. It's a lot of, choice that they have in what freight to move right now, and so we expect those rate disruptions from those spike events to carry on longer. Let's talk a little bit about why is the capacity tightening. So we've talked a lot about the supply side. What actually is going on here? What's at play in the system? I'm gonna start first with a big number, which is, you know, fittingly also very big on the screen here. What we are showing here is some FMCSA data. This is demonstrating over 850,000 fewer CDL carriers that are focused on freight, self reported by carriers between December 24 and May 26, May 26 being the most recent snapshot that's been made available. This is a significant drawback in CDL carriers. I I do wanna emphasize that this is, again, self reported carrier data, but this is the best data that we have to go off of on this particular, data sample. And we're gonna talk a little bit more about how that data sample is, pulled together in some of the other areas and and what we're actually feeling in the system. But we we thought this deserved a bit of a headline, call, and it really represents the the only true significant pullback in CDL licenses over the last decade. And it's pretty significant in this case. We're talking about a 15% drawdown in terms of that overall, group. So let's look a little deeper at those, statistics, and we're gonna show here dating back through December 2019. If you just took a cursory glance at this chart in this table, there's a lot of numbers on the screen. But if you just took a a high level glance, I think what you would see is not necessarily it jumping out at you that, hey. There's been a a sharp drawdown. Right? The the carrier numbers are up. The vehicles are not sharply down. The driver numbers are actually up. It's really only once you get over to the CDL drivers that you see that sharp decrease. This sample all comes from the same measurement system. There's there's not really that we're aware of any change in the sampling, methodology that would lead to this outlier CDL numbers. From from our perspective, it really is a representation of of some of those headwinds and some of those regulatory changes that Kristen talked about up top. I'll also share as someone who's working in the booking of freight all the time, we are feeling this, in the system. So it is showing up in the day to day as we work with carriers, both just fewer carriers to select from and more optionality within that group. So I wanted to highlight this data and show just kind of how extreme that has been. The next snapshot, I think, publishes here in in a few days, and so it'll be interesting to see how these trends continue to evolve. Finally, my final piece I wanna talk about, I just spent a long time talking about capacity. Obviously, the other side of the equation is is the volume and the demand. And the broader trend on the truckload side over the last few years has been decreased demand, which has been why this capacity shift has been so significant that it's been sharp enough to reverse the pricing trend even in an environment where demand, broadly speaking, has continued to decline on the whole. Although we are seeing some signals, as Adam shared up top, that that is starting to reverse trends, in the short term, there are definitely pockets where we're seeing even more, signals around that reverse trend. And with that, I'm gonna call Adam back up on the stage. He's gonna talk a little bit more about some of those pockets and and how we're navigating that here at Flexport.

Adam Parish

Thanks, Jake. And what I wanna add to everything that Jake and Kristin, just walked through before is that, you know, those same dynamics with regard to the capacity shortage, regulatory changes, rate hikes, they're all hitting the drayage and intermodal space just as hard. Frankly, in some pockets, it's even more acute relative to other modes of trucking. So just wanna walk through what we're seeing on that side of the market. But drayage is is uniquely exposed, and and the reason comes down to the carrier and the driver profile that are moving freight off the ports and rail terminals. Right? So the drainage workforce is heavily made up of owner operators and small fleets, operating out of port cities like LA, Long Beach, Oakland, Houston, New York, New Jersey, just to name a few. And, you know, that's exactly the demographic the new CDL rules hit the hardest. So suffice it to say, drayage really absorbs it at the core of its workforce. And so, you could see it showing up in the data already. CDL renewals in Texas are down 31% year over year, California down 26%. And keep in mind, Texas and California, of course, are home to some of the busiest ports in the country, like Houston, LA, Oakland, and then, those inland rail terminals as well. And there's a direct signal of what we're seeing on the supply side. And then on top of that, there's also a secondary effect that's worth calling out here as well. So, Jake, just, you know, walk through the the rate hikes on the over the road side, at at on the domestic level. And so as OTR spot rates climb to what is now record levels, drivers who have the ability to work on either side of the market are naturally gravitating toward truckload, which could be, you know, van or flatbed business where there's better paying rates, in in in most cases and more earning potential. So we actually saw this exact same migration during COVID, and it's playing out again as we speak. You know, it's funny. I was actually just in Houston this week. I spent, Monday and Tuesday there and met with several, carriers and partners in the region, and, we spoke at length about, you know, these new challenges they're facing. And, it's it's always interesting to hear it from from their perspective and sort of what they're doing to combat. But, underneath all of this, carrier costs are up across the board. Insurance, maintenance, tolls, fuel, You know, diesel alone is up about 34% from where it was before the Strait of Hormuz conflict back in February. So national averages are peaking, you know, above $5.50 a gallon, which was earlier this spring. By the way, I mentioned 34% from where it was before the conflict. But at the peak, it was actually a 57% increase, which I know all of us felt at the time. And, you know, for drayage carriers, especially owner operators and small fleets, there's real exposure here. And, yes, of course, customers do compensate for fuel, but it often doesn't recover in full, especially, you know, with such erratic, price fluctuations. And so, here's the demand side. We spoke a lot about the supply, similar to to Jake Carlson's as well, and it really does tell the other half of the story. So as we know, import volumes are strong right now. We've all been seeing that in the headlines. The June forecast was actually revised up to 2,250,000 TEUs, which tells you that peak season isn't coming. It's really already here. You know, typically, we'd expect that, later in the summer, figure in July into August. And, also, Transpacific rates have been up roughly 10% week over week for now six straight weeks. And so, this means the pipeline feeding into these ports isn't slowing down anytime soon. You know, we're we're we're we're gonna see some of this volume, stick around for for the coming months. And then you can see that this is playing out on the right side of the slide. So LA Long Beach is up 32% year over year. In loaded imports, Houston's up 13%, also on pace for another record year. And, the part that really catches a lot of shippers off guard is as truckload rates hit record levels, a natural response is to move freight to intermodal, right, because it's less expensive, albeit with slower transit times, but, easier to budget. And so shippers are doing exactly that. You know, intermodal volumes are up 6% year over year, this past month. And here's the thing, every intermodal move still need to drayage truck on both ends. Right? So when shippers, you know, move business from over the road to intermodal, they're not actually reducing drayage demand. They're actually creating more of it. And, you know, the domestic container and the marine container business are typically adjacent to each other. They're not necessarily always overlapping with regard to the carrier base that hauls, domestic versus marine containers, but it's still a direct impact on overall truck capacity. And then as a result, you know, of of the pricing impact of of supply contracting while demand is climate is is exactly what we'd expect. So drainage rates across The US are up as much as eight to 10%. We've seen pockets of where it's increased even more than that, in some cases, far more, into the teens, and we think this trend will continue throughout the back half of the year. So, that's really the full picture on the duration intermodal side. Hopefully, you got now a clear picture of, you know, the regulatory, you know, state of affairs from Kristen, into, like, the over the mode and domestic side of the house with Jake and then into trades and intermodal. And, you know, the the common theme again is supply is shrinking, demand is growing, rates are moving. So now we we need to ask the question, you know, how should shippers and supply chain teams welcome you know, plan for for what's ahead? So, Jake, I wanna welcome you back onto the stage and, you know, kinda share some ideas here.

Jake Carlson

Thanks, Adam. Appreciate it. Jumping in, so that question of what happens next, what do we do now, how do how do we navigate this experience where the pricing power has shifted, wanna talk about three ideas. Obviously, there's a lot of ideas out there, a lot of things we can do. We would love to chat more deeply with anyone on the call that wants to talk about this. But three ideas that come top of mind for us would be, think about becoming the shipper of choice. We talked a lot about that idea that the supply side, is shrinking or is contracted. One of the things that that creates is it creates a lot of optionality for carriers. If they have more loads to choose from than there are carriers to go get those loads, they can pick and choose and be really thoughtful about exactly what they wanna move and when and for what rate. And, oftentimes, rate is gonna win out in these cases in the way that we would expect it to, but it's not the only thing that matters. So when you think about becoming a shipper of choice, it is not necessarily just being the shipper that always pays the carrier the most. It also is thinking about things in terms of how easy are you to work with for a carrier. When carriers go to do pickup or delivery, are they getting unexpected delays? Are there amenities that are supportive for the carriers? Is your freight predictive? Is it something that can be relied on? Are you constantly posting loads that end up getting canceled or getting replanned, or do those loads follow through and a carrier can really plan their week around your freight, and build in together their best plan of attack for how they think about how to navigate their business and how they operate in their world. So being that shipper of choice, it really can make a difference. We see day to day that this thing really matters in terms of predictability and reliability for carriers. The second piece is venture partners. There's no better time than right now to be thinking deeply about that carrier selection process. And whether you're doing it directly and needing to evaluate your own situation or you're working through partners and need to better understand what selection processes they're going through, I bet Kristen covered this really beautifully, up top on this call. There's a lot that you need to understand here. There's also a lot of nuance to these types of decisions and how you think about that carrier vetting and how much you do or do not wanna be involved in. So, again, this is a great topic for a follow-up if anyone wants to go deeper on this after the fact. This is a good time to be thinking deeply about how are your partners vetting those carriers. And then finally, budgeting for the upcycle. So, you know, I'm I'm sure any shippers that are on the call here are not loving, this trend that we're talking about in terms of the prices are high, and we can we expect them to continue to be high. But I would say the worst thing, compared to paying high prices is, planning to pay low prices and continuing to pay high prices. So we wanna expect, what you expect, which is that things are going to continue to move here. We don't really see any signal in the near horizon that is gonna reverse this trend. So through the rest of 2026, certainly, and and into 2027, we expect that to hold true and just want, really, everyone to be prepared for that experience and make sure that you're planning that into your, annual budgeting and annual planning, for this stuff. Adam, anything else to add on on these pieces?