Union Pacific reported record first-quarter financial results despite carrying slightly less freight than a year ago.

“We had a strong first quarter and start to the year. Our network is running well, and we are delivering on commitments to our customers,” Chief Executive Jim Vena said on the railroad’s Thursday morning earnings call. “When you put it all together, we are doing what we said we would, leading the industry in safety, service, and operational excellence.”

Operating income rose 4%, to a record $2.45 billion, as revenue increased 3%, to a record $6.2 billion. Earnings per share was up 6%, or 9% when adjusted for the impact of one-time items.

The railroad’s operating ratio was 60.5%, a 0.2-point improvement compared to a year ago. The adjusted operating ratio was 59.9%.

Overall volume declined 1% for the quarter, driven by a 9% slump in premium traffic, which includes intermodal and automotive business. Domestic intermodal, however, had its third straight record quarter, said Kenny Rocker, the railroad’s executive vice president of marketing and sales.

Industrial products volume increased 4%, while bulk traffic was up 12% thanks largely to higher grain and coal shipments.

The railroad’s key operations metrics improved for the quarter, with freight car velocity, locomotive productivity, workforce productivity, and train length all at record levels. UP’s train accident and employee injury rates improved for the quarter as well.

“Freight car velocity increased 9% to 235 miles per day. This performance was driven by best-ever terminal dwell of 19.7 hours, 11% better than last year and our second quarter below 20 hours,” said Eric Gehringer, executive vice president of operations. “Every day, we continue to challenge ourselves to find new and innovative opportunities to reduce car touches, leverage existing technology in our terminals, and implement new technologies.”

UP (NYSE: UNP) was able to reduce its active locomotive fleet by 4% in the quarter despite a 4% increase in gross ton-miles.

UP now has a positive outlook for its bulk and industrial products business segments for the remainder of the year. The intermodal outlook is negative due to lower imports and international traffic, while the automotive outlook is neutral as softer vehicle sales are being offset by the railroad landing a BMW contract.

The spike in fuel prices since the Iran conflict began will put pressure on the railroad’s profit margins in the second quarter, Chief Financial Officer Jennifer Hamann said. The railroad is paying over $4 per gallon for diesel fuel this month.

Fuel surcharge revenue will eventually offset the rise in fuel prices.

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The post Record operating income, revenue for Union Pacific in Q1 appeared first on FreightWaves.

Norfolk Southern reported slightly lower first-quarter earnings on Friday morning as harsh winter weather took a toll on volume in February and fuel prices jumped in March.

“Working together, we successfully navigated another challenging winter with weather events that affected most of our territory, putting real pressure on the network and our volumes in the month of February,” Chief Executive Mark George said on the railroad’s earnings call Friday. “But as conditions normalized and our network recovered, we were able to capture the available volume in March and exited the quarter with solid momentum, all while staying focused on what matters most, operating the railroad safely.”

Adjusted for the ongoing financial impact of the February 2023 derailment in East Palestine, Ohio, and merger-related costs, Norfolk Southern’s operating income declined 2%, to $939 million, on flat revenue of $2.99 billion. Earnings per share declined 1%, to $2.65.

The railroad’s adjusted operating ratio was 68.7%, an increase of 0.8 points from a year ago.

“On costs, we remained disciplined,” George said. “Total adjusted expenses were up just 1% year-over-year despite inflationary pressures, storm costs, and sharply higher fuel prices.”

Overall volume declined 1% for the quarter due to a 4% drop in intermodal volume. Coal traffic was up 9%, while merchandise posted a 1% gain.

The intermodal decline was primarily due to a 9% drop in international traffic compared to last year’s tariff-related volume spike, but merger-related domestic intermodal business losses also contributed, Chief Commercial Officer Ed Elkins said. Some of NS’ domestic traffic has migrated to CSX (NASDAQ: CSX) thanks to its intermodal alliance with BNSF Railway (NYSE: BRK-B).

The jump in coal volume was due to a 27% increase in domestic utility shipments as natural gas prices rose and utilities sought to rebuild depleted coal stockpiles.

“Within merchandise, volume and revenue increased 1% from a year ago, and this was driven by continued share gains in our chemicals and our automotive markets,” said Elkins.

NS (NYSE: NSC) and UP (NYSE: UNP) plan to submit their revised merger application to federal regulators as planned on April 30. The original application was rejected as incomplete in January.

“The new application is going to confirm what we said in the original application on the logic of doing this deal and the benefits that a single-line transcontinental railroad will bring to the country and to our shippers,” George said. “In fact, we’re going to have a much stronger set of data that actually makes the case stronger.”

Operational metrics held up during a quarter with harsh and widespread winter weather that tested the network, Chief Operating Officer John Orr said.

Car miles per day increased 2.5% compared to a year ago, as terminal dwell improved by 3%. The railroad’s customer service metrics for intermodal and merchandise shipments were unchanged from a year ago.

The train accident rate improved 40% compared to the year-ago quarter, while the main line accident rate improved 51%. The personal injury rate was up 10% for the quarter.

Subscribe to FreightWaves’ Rail e-newsletter and get the latest insights on rail freight right in your inbox.

Related coverage:

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The post Norfolk Southern earnings slip as winter weather impacts rail volume appeared first on FreightWaves.

Ryder System’s stock price is up more than 80% in the last year–more than 23% in a month–for a business whose latest earnings report for 2026’s first quarter shows it has had to fight for growth.

There was nothing in the quarterly report that was particularly negative. It showed a company that is not getting that much of a lift from underlying freight market conditions, but had a solid performance on the back of its own initiatives and something it has little control over: used vehicle sales.

All that happened even as its Fleet Management Solutions (FMS) unit, its flagship leasing and rental operations, had just a 1% increase in revenue year-on-year; its contract logistics operations through Supply Chain Solutions (SCS) was up just 2% in revenue; and its Dedicated Transportation Solutions (DTS), which provides dedicated trucking, saw an 8% drop in revenue.  

But with the help of used vehicle sales, FMS was able to push out a 6% increase in earnings  before taxes.  Those used vehicle sales, which come out of FMS, were cited near the top of the company’s earnings announcement as a reason for its performance.

A different company than eight years ago

In his first earnings call as CEO since he took over Ryder (NYSE: R) from the retired Robert Sanchez, John Diez made several comparisons to where the company stood in 2018, when its vehicle leasing and sales of those vehicles was far and away the key driver of profitability at Ryder. Now, SCS and DTS supply about 60% of revenue, compared to 44% in 2018.

But while the fundamental shift has provided long-term stability to the Ryder business, the company’s earnings call with analysts Thursday kept coming back to used vehicle sales, even as Diez said the company’s strategy in recent years has been to “derisk” its fortunes by “significantly reducing our reliance on used vehicle proceeds to achieve our targeted returns.”

The used vehicle sales were featured on the call for a simple reason: Ryder said those sales were key to why the bottom line at the company was strong. Ryder posted non-GAAP earnings of $2.54 in the first quarter, compared to $2.46 a year ago. That was also a 27 cents per share “beat” over consensus forecasts, according to SeekingAlpha. 

Free cash flow rose to $273 million from $259 million, even as operating revenue was flat at $1.3 billion.

Cristina Gallo-Aquino, Ryder’s CFO, said on the call that the company expects to reap about $500 million in used vehicle sales proceeds this year, which would be in line with what it received in 2025. 

Used vehicle market likely to stay firm

But although no meaningful increase in that figure is projected, Diez talked at several times during the call as if the used vehicle market might be stronger this year.

He said Ryder expected a “modest improvement in used vehicle market conditions.”

And looking to the future, Diez said that by “the next cycle peak,” without putting a date on when that might be, Ryder expected a potential $250 million increase in annual pretax earnings, which were just under $100 million for the first quarter. One of the drivers of that increase, Diez said: used vehicle sales. 

“Our increased forecast reflects stronger-than-expected first quarter performance, a modest improvement in used vehicle market conditions and continued strong contractual performance,” Diez said on the call. . 

Ryder, in its earnings announcement, increased its forecast for 2026 financial performance. One of the reasons for that, Diez said, was a projection of higher used vehicle sales results.

But while the impact of that was a small part of the forecast, Diez said, more may come later.

Inflation in the market for new vehicles also is a factor in the company’s projections. “We do expect later on this year that we’re going to see significant increases on new equipment, which will provide support for higher used vehicle sales pricing,” he said. “We just haven’t put that into the forecast because we need to see more development on that side to kind of get confident in that activity.”

Regulatory atmosphere and its impact on vehicle sales

But there’s a potential newer area of competition in used vehicle sales: trucks put on the market where the driver lost their ability to be behind the wheel because of various regulatory crackdowns.

Diez conceded “there’s some structural changes happening in the  marketplace.”

But he added that the regulatory actions are mostly taking place in over the road driving, and that means a lot of sleeper cabs.

About 60% of Ryder’s used vehicle inventory is in trucks, like a box truck, with about 40% being tractors. It was improved tractor pricing that led to the used vehicle sales performance being higher than expected.

But Diez added that the biggest share of the tractors it owns that will be sold into the market are day cabs, “which is a different application than the over-the-road activity.”

“So I think we’re pretty well calibrated there,” Diez said. “We don’t think that’s going to be a meaningful impact even if there’s pressure on the sleeper class moving forward.”

The sales mix for Ryder was positive for the quarter compared to last year. Sales through retail outlets were 61% of the mix in the first quarter of 2026, versus 56% a year ago. Retail sales proceeds are generally better than wholesale outlets. But the retail percentage was 69% in the fourth quarter.

Ryder said retail pricing “remained stable sequentially.”

Actual vehicles sold were 4,600, which was down from a year ago but up 1,000 sequentially. 

Applause for the performance

Even though some of the standard measurements like operating income and revenue didn’t move up significantly in the quarter, and a key driver of the first quarter profit growth–used vehicle sales–is something Ryder is trying to diminish in importance, there were positive analyst statements. 

The transportation research team at Wells Fargo said the latest guidance from Ryder, up to an earnings per share target of $14.05-$14.80 from $13.45-$14.45, “feels conservative.”

Diez talked on the call about the company’s strategic plans, which includes continued focus on maintenance improvements. “Ryder expects $70m (+$1.24/share) of YoY benefits from strategic initiatives and a conservative $10m (+$0.19/share) from its cyclical businesses despite end market improvements,” Wells Fargo said.

That team also focused on sales in the Supply Chain Solutions segment, which is a contract logistics provider. Ryder, the analysts said, “inked record SCS sales activity and customers are finally signing long-term leasing contracts.”

Wells Fargo raised its price target to $260 per share from $236. 

At approximately 2:45 p.m. EDT Friday, Ryder stock was at $251.56, up $8.97 for a gain on the day of 3.70%. Two days ago, the stock closed at $227.58. 

More articles by John Kingston

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The post A changed company at Ryder, but used vehicle sales are still a big driver  appeared first on FreightWaves.

Maine’s congressional delegation is seeking answers from Postmaster General David Steiner about why the U.S. Postal Service is nearly $350,000 in arrears to a small regional air service that delivers mail and packages to island communities.

Penobscot Island Air resumed carrying postal shipments to Vinalhaven, North Haven and Matinicus islands on Wednesday after the Postal Service agreed to start paying overdue bills stretching back to 2023 in response to a one-day work stoppage.

“We urge you to immediately resolve the outstanding back payments and provide clarification on how these payment lapses occurred, as well as how delays can be prevented in the future,” Maine’s two House members and senators said in an April 23 letter to the postal chief. The lawmakers, including Sen. Susan Collins, urged the USPS to fully and quickly compensate the carrier.

“Penobscot Island Air is one of many contractors in the state that deliver mail to island communities by air and sea. These contractors are part of the lifeblood of Maine’s rural communities. This incident raises concerns over whether the USPS is faithfully fulfilling the terms of all these contracts,” the lawmakers wrote. “While it is promising to hear that the USPS has reached a partial payment agreement to pay Penobscot Island Air … we need greater assurance from the USPS that Maine island contractors will receive fair and prompt compensation for the services they provide.”

The air carrier, which maintains a fleet of four single-engine Cessna 206 and 207 turboprop planes, said in a Facebook post on Tuesday that the Postal Service owed it $388,000 — about 20% of its annual revenue — and that it had been paid for a single delivery in 2026. The last payment received was on March 13. A company representative told FreightWaves that the Facebook post overstated the delinquent amount and that the carrier is owed $349,000.

In a post the following day, Penobscot Island Air said the USPS promised to pay about 25% of its outstanding balance on Friday. It’s unclear how, or when, the Postal Service intends to pay the remainder of its bill. Federal contracting rules generally require the government to pay interest on late payments for properly invoiced services.

In its message, Penobscot Island Air asked residents to call the regional postal office and let officials know how the cutoff would impact them. The pressure campaign picked up steam when local media outlets began covering the news. 

“While our mission is to support the islands, PIA employees need a paycheck. We can’t operate as a business if almost a fifth of our yearly revenue is tied up in the bureaucracy of the United States government,” the company said in explaining why it originally suspended mail service. “It’s been 75 days this year alone that we have dutifully loaded up USPS mail and ferried or flown it out to the islands. It’s no secret that winter is our slow period, and without prompt payments, cash flow is bleak.”

The air carrier said it repeatedly met with the Postal Service’s financial department and the regional office in Rockport, Maine, to get necessary paperwork completed to resolve the matter. Stopping service was a last resort designed to get the Postal Service’s attention, the company said on Facebook.

“We know you rely on the mail for critical packages such as medications. We have no intention of dragging this out and will go back to work without payment if we must. What’s happening isn’t normal or okay. We’ve just run out of other avenues to show the USPS we can’t continue operating this way,” it said. 

Rep. Chellie Pingree, a Democrat, roasted the Postal Service for the delinquent payments during a House Appropriations Committee session on Wednesday.

“What the hell is going on over there? What is going wrong? And why do we have to hear these complaints so often? Why should they have to put up a Facebook page?” she said, adding she’s heard for years from USPS employees and constituents about insufficient staffing, mail not being picked up or delivered for a week at a time in rural areas.

This is “yet one more institution under this administration that’s being poorly managed, poorly run, not delivering the mail, not fulfilling the requirement they have to make sure that whatever community you live in, your mail arrives,” Pingree said.

The Postal Service said it has moved to correct the problem.

“Postal Service transportation officials have been in contact with the air contractor and are finalizing a prompt resolution of the payment issue. We regret any inconvenience resulting from this unfortunate error, and we have taken steps to ensure future payments are issued timely,” the agency said in a statement to FreightWaves.

Penobscot Island Air also provides parcel delivery service for FedEx and UPS. 

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Contact:  ekulisch@freightwaves.com.

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Descartes Systems Group announced it has acquired fleet safety solutions provider Idelic for $28 million. The AI-powered platform manages driver performance, allowing fleets to operate more safely. The deal adds another large dataset to Descartes’ Global Logistics Network.

Pittsburgh-based Idelic’s platform combines monitoring, reporting and training on one system, helping fleets identify and mitigate risky behaviors. The dataset includes over 40 billion miles of driving data along with more than 400,000 accident reports.

“Built on years of machine learning applied to predictive accident models across more than 150 fleets, Idelic’s AI capabilities are field-proven in predicting driver risk and optimizing safety training interventions,” a news release stated.

The deal will expand Descartes’ (NASDAQ: DSGX) Fleet Data Intelligence platform, combining existing routing planning solutions with predictive safety capabilities.

“Productivity and safety are equally critical for fleet operators,” said James Wee, general manager of fleet management at Descartes. “This acquisition adds critical data to our GLN and enhances Descartes’ final-mile footprint by adding highly advanced fleet safety capabilities and deep domain expertise.”

Descartes funded the deal with cash on hand. A performance-based earnout of up to $12 million is based on various revenue targets in the two-year period following the closing.

The acquisition marked Descartes’ 36th since 2016.

Last week, Descartes introduced its Fleet Data Intelligence platform, which uses an AI agent and machine learning to improve fleet performance and reduce cost per delivery.

More FreightWaves articles by Todd Maiden:

• Losses narrow at Heartland Express as market shifts
• Knight-Swift says shippers already seeking peak-season capacity
• Knight-Swift aims for double-digit rate hike in tight market

The post Descartes acquires fleet safety platform Idelic for $28M appeared first on FreightWaves.

There is a federal regulation whose entire purpose is to make sure you can sue a trucking company after one of its trucks kills your family member. The regulation requires every interstate motor carrier, freight broker, and freight forwarder in America to designate a process agent in each state where they operate before FMCSA will grant them operating authority. The form is called the BOC-3. BOC stands for Blanket of Coverage. The theory is that if a carrier’s truck runs a red light in Georgia and kills a pedestrian, the victim’s family can find a designated legal representative in Georgia who is required to accept service of process on the carrier’s behalf and forward the lawsuit to the carrier. That is the entire point. Legal accountability. Accessible justice.

After encountering issues with litigation in which we were unable to serve defendant trucking entities, we analyzed the complete BOC-3 dataset published by the FMCSA, which contains 1.69 million filing records covering every carrier, broker, and freight forwarder with active federal operating authority in America. What emerged from that analysis tells you a great deal about how the system actually functions, versus how it is supposed to. Eighty-nine unique agent entities control process agent relationships for 1.67 million American transportation companies. The top ten agents among the 89 collectively control process agent relationships for 942,962 carriers, representing 56.5 percent of the entire carrier population in the United States.

That concentration is not, in itself, evidence of fraud. National blanket agents have existed for decades and legitimate operations do serve enormous carrier books. Process Agent Service Company, based in Sioux Falls, South Dakota, serves 123,594 carriers. All-American Agents of Process, also based in Sioux Falls, serves 107,623 carriers. Truck Process Agents of America, out of Fargo, North Dakota, serves 128,038 carriers. These are volume operations, they are real businesses, and they exist precisely because the BOC-3 market rewards scale. A carrier getting started needs a $19 or $20 or $35 annual BOC-3 filing and the industry has built itself around delivering that at the cheapest possible price point.

The problem starts when you look at what happens at the margins.

Federal regulations under 49 CFR Part 366 define what a process agent must be. The agent must have a physical address, not a post office box, in every state of designation. The agent must be available at that address during normal business hours. The agent must be in a position to actually receive legal documents and forward them to the carrier in a timely manner. Those are the rules. They exist because a PO box cannot accept a summons. A ghost company cannot appear in court. A discount mill with no physical office and no one answering the phone cannot provide the accountability that the regulation was designed to create.

THE TEA data shows that among the 89 agents covering 1.67 million carriers, at least two operate from PO Box 5627 in Norman, Oklahoma. Agents of Process Services and 35 Dollar Process Agent Service, Inc. share that single mailbox. Neither entity could be verified as a legally incorporated business in any state through OpenCorporates or state Secretary of State searches. Combined, they carry 1,193 carriers on their books. For context, the national carrier population averages in the upper 60s. These are carriers that rank in the bottom 15 percent of American trucking, as determined by a model that incorporates crashes, out-of-service rates, violation history, and authority stability. The discount agent and the worst carriers found each other. The result is that FMCSA is unable to enforce, and Plaintiffs and their litigation Attorneys are unable to effect proper service of process. Litigation following catastrophic claims is unsuccessful simply because the defendant, a bad actor trucking company, can’t be served. 

In Edmond, Oklahoma, 15 miles up the road, two more agents share a single address at 2524 North Broadway. Permits and Process Agents and Permits C and Process Agents LLC are nearly identical names operating from the same office with combined coverage of 6,059 carriers. The same carrier can appear under both registrations simultaneously. 

FMCSA itself acknowledged in 2019 that it was getting reports from enforcement personnel about the inability to complete service of process in cases where the contractual relationship between a carrier and its BOC-3 agent had terminated without the carrier filing a new designation. The agency issued policy MC-RS-2019-0002 specifically to address situations in which the process agent on file refused to accept service on behalf of the carrier or was otherwise no longer available. FMCSA’s own enforcement staff was telling headquarters they could not serve carriers. In 2019. That problem has not gotten smaller.

The BOC-3 filing process itself creates the vulnerability. Only a process agent, on behalf of the applicant carrier, can file Form BOC-3 with FMCSA.FMCSA The carrier does not file it themselves. The agent files it. This means the agent’s name, address, and contact information are entered into the federal database as the authoritative contact point for legal services, and the carrier has limited visibility into whether that agent can actually fulfill the obligation. When you are a new carrier paying $19 for a BOC-3 filing because someone on Facebook trucking groups said it was the cheapest option, you are not doing due diligence on whether that agent has a real office, actual staff, and a functioning process for forwarding legal documents. You are buying operating authority clearance.

The attorneys feeling this most acutely are the plaintiff lawyers chasing crash cases involving carriers from the same networks the industry has been tracking for years. The Romanian chameleon carrier networks in the Chicago suburbs, the Moldovan freight operations spinning up new DOTs out of Elgin, Illinois, the carriers formed through Wyoming shell mills at addresses like 2232 Dell Range Boulevard in Cheyenne, where 14 separate carriers share a single normalized address. Those carriers need operating authority. Operating authority requires a BOC-3. The BOC-3 is filed by whichever agent is the least expensive and least likely to ask questions. When a plaintiff’s attorney tries to serve the carrier after a fatality crash, the BOC-3 agent either does not respond, has no physical presence to serve, or simply passes a letter to a virtual mailbox that no one checks.

The Wyoming shell mill connection is worth a separate examination. THE TEA formation address analysis shows that 2232 Dell Range Boulevard in Cheyenne currently hosts 14 FMCSA-registered carriers with poor performance histories. The Sheridan, Wyoming, address for Registered Agents Inc., 30 North Gould Street, appears in the BOC-3 dataset with 10,922 carriers and 97 revoked authorities. That address is the registered agent address that appeared on the Phoenix ELD LLC filing in December 2022, the Wyoming shell entity connected through phone number forensics to Incway Corporation and its federally adjudicated RICO principal, Lawyers Limited, has been documented providing entity formation services to trucking networks in the Chicago area.

The connection between shell entity formation infrastructure and BOC-3 agent infrastructure are two components of the same system. You form the Wyoming LLC through a document mill. You get your operating authority through FMCSA using that Wyoming address. You file your BOC-3 through a $19 discount agent who operates from a PO box and does not verify anything. You are now a federally authorized motor carrier with no real address, no real agent, no accountability footprint, and a 15-point safety score. You haul freight on America’s highways until you crash something, and then you dissolve, reform under a new DOT, and do it again.

FMCSA enforcement personnel and state partners have reported an inability to complete service of process for enforcement actions in some cases where the regulated entity has not filed a new designation, but the contractual relationship with the designated process agent has been terminated. FMCSA. That is the agency’s own language. Unable to complete service of process. For enforcement actions. Against carriers operating under active federal authority.

The regulation intended to make carriers legally accessible has become the mechanism by which the worst carriers make themselves legally inaccessible. The $19 BOC-3 is a shield.

What the FMCSA could do is straightforward in concept, though the agency’s appetite for reforming the process agent has historically been limited. Requiring process agents to verify their corporate existence as a condition of FMCSA registration would eliminate ghost agents immediately. Requiring physical address verification with periodic audits would eliminate PO box operations. Requiring agents serving more than a threshold number of carriers to carry errors and omissions insurance would ensure the function is actually being performed. Suspending operating authority when a BOC-3 agent cannot be reached, rather than waiting for a carrier to file a replacement designation, would close the gap the 2019 policy sought to address.

None of those reforms requires legislation. They require rulemaking under existing authority.

Until then, 89 agents control the legal access point for 1.67 million American trucking companies. Some of those agents are legitimate national operations. Some of them are PO boxes in Norman, Oklahoma. And somewhere in a courthouse right now, a plaintiff attorney representing a family that buried someone after a truck crash is trying to serve a carrier whose BOC-3 agent does not exist, whose address is a mail drop, and whose operating authority was granted by a federal agency that never verified any of it.

The BOC-3 was supposed to be the guarantee that you could always find them. Right now, for many carriers, it is a guarantee that you cannot.

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