From the desk of Eric Heath
Last month I wrote that the gap between what buyers were underwriting and what sellers could show had closed with the Q2 earnings season. In the four weeks since, the case has only gotten more concrete: it no longer needs a quarter of trailing earnings to make its point. It is visible now, at the pump and in the spot market alike. Fuel, capacity, and the cost of being undercapitalized or undocumented are converging on the same read, and each one makes the case on its own.
The clearest evidence sits in the spot market. In the second week of September, dry van rose to roughly $2.21 a mile, reefer from $2.69 to $2.74, and flatbed was down to $2.66, linehaul basis — even as truck capacity has stayed down double digits year over year across every equipment type, with van, reefer, and flatbed all off 11 to 19 percent from a year ago. The same freight is chasing fewer trucks than it was in 2025, which is why price is moving before volume has to. Intermodal is pulling on that same scarcity from a different direction. Drayage is telling a related story from the ports inward: the national drayage spot index is running 8.2% ahead of last year, as peak-season import volumes, pulled forward ahead of the holidays and China’s Golden Week, compete for inland capacity that was already tight.
Fuel is where that scarcity stops being a spot-market abstraction and starts showing up directly on a P&L, and diesel just gave carriers an unusually expensive example of it. Diesel crossed $6.529 a gallon nationally in the first week of September, surpassing the prior weekly high of $5.81 set in June 2022, and has climbed further since — the Strait of Hormuz disruption and the renewed U.S. blockade on Iranian oil exports are keeping global supply constrained. The legal environment moved in the same direction, and more sharply than most of the industry expected. In July, a Dallas County jury handed down a $604 million verdict against C.H. Robinson in Lipe v. Lupus Superior — and the number that matters is not the 23% fault the jury assigned under ordinary negligent-selection analysis, but a separate finding that the driver was a “borrowed employee” of the broker, which pushed Robinson’s exposure to roughly two-thirds of the total award. Days later, the Fifth Circuit revived a similar theory in Crane v. Penske Transportation Management, finding Penske Logistics vicariously liable as the ultimate broker in a multi-party chain. Neither case is final — the Lipe judgment has not yet been entered, and Crane returns to the district court on remand — but together they draw a sharper line than Montgomery alone did: the exposure that matters most is not whether a broker’s vetting was diligent, it is how much operational control it exercised over the load. That is a harder problem to solve than a compliance file, and it rewards the operators who have built real structural discipline into how they run freight, not just how they document it.
The M&A implication is the one I have been making all year, reinforced by four more weeks of inputs pointing the same direction. We have now tracked 257 North American transportation and logistics transactions year to date through August — up from 189 at midyear — with strategics still the base load of the buyer set at roughly 52% of count. Buyers are not underwriting the easiest environment to operate in. They are underwriting the ones who can operate through this one — carriers and brokers with the balance sheet to absorb a record fuel print, the operational discipline and structural distance from the load to withstand a harder liability standard, and the density to hold pricing while capacity keeps leaving the market. That premium is no longer only a domestic phenomenon, either. Canada’s retaliatory tariffs on $27.6 billion of U.S. goods took effect September 8, mirroring the U.S. action on Canadian goods from August 22. The practical effect on both sides is the same: it is sharpening the appeal of U.S.-domiciled, domestically-focused transportation assets for capital that wants exposure to this market without exposure to the border itself. A platform whose freight never crosses it does not care which direction the tariffs point. If you are thinking about what this environment means for your business — as a seller, a buyer, or simply to understand where you would stand today — I would welcome the conversation.
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