Freight Rates AREN’T Falling: Industry Vet’s Bold Prediction & Advice

Summary View Transcript Freight rates are a hot topic, but one industry veteran says they’re not going down. Kevin Nolan, Founder of Sopa Creek, shares his candid insights on the state of freight brokerage, why he’s bullish on C. H. Robinson, and how recent ‘nuclear’ legal judgments are reshaping the industry.

He also offers essential advice for brokers navigating carrier vetting, factoring, and tracking to stay competitive. Freight rates are not going down. That is the blunt assessment of Kevin Nolan, a serial freight brokerage entrepreneur who has started multiple billion-dollar-plus companies.

Speaking in a video interview, Nolan said unprecedented mid-summer contract re-rating activity and tender rejection rates still in double digits confirm the industry is in the earliest stages of a freight market recovery — not a false start.

“Contract rates lead everything,” Nolan said, explaining that RFP pricing has historically occurred in October and November. The fact that re-rating has been allowed in July, he argued, is a signal shippers recognize they quoted too low in prior cycles and are now willing to accept higher rates.

“I feel pretty good about freight rates for the next eighteen months,” he said. Nolan pointed to tender rejection data as further evidence. He noted that rejections dropped from 17% to 14% in August — a level he called elevated and unusual for that time of year.

The decline, he said, reflects mini-bids being settled at mutually acceptable contract rates rather than a softening market. “In August, guys. I don’t know if that’s ever happened,” he said of the 14% reading. “Freight rates aren’t going down. Okay. That’s what I’ll tell you. Freight rates are not going down.”

On the legal front, Nolan weighed in on the $604 million nuclear verdict against C. H. Robinson in Texas, calling it a seismic event for the brokerage industry.

He noted the verdict followed the Montgomery decision and came only three months later, and said Robinson would have to fight the judgment rather than settle — because a settlement at that figure would effectively invite further litigation industry-wide. Despite the legal overhang, Nolan said he bought more C. H.

Robinson stock the week of the verdict, citing the company’s roughly 60% stock gain over the prior 18 months and its standing as the largest freight broker in the industry. Nolan also warned that insurance costs represent a growing and unpredictable line item for brokers — one contributing to investor uncertainty across the sector.

He offered a practical vetting framework for carriers: look at which insurance company covers a fleet, since major insurers conduct on-site safety and hiring reviews before binding coverage. He added that 90% of truckers use factoring companies, making those relationships another useful proxy for carrier quality.

Length of time in business and red flags like a two-week-old MC number or a generic Gmail address on a load confirmation were also cited as warning signs brokers should not ignore.

Nolan was critical of the influx of capital and new entrants into freight brokerage from 2019 through approximately 2024, arguing that operators willing to lose money — he cited an example of losing $800 moving a load of beer — drove a race to the bottom on rates without improving the industry’s fundamentals.

He said that era contributed to the prolonged freight downturn and that its unwinding is part of what is now setting the stage for a sustained rate recovery. Nolan also noted that freight and logistics, including international shipping and warehousing, still represents more than 27% of GDP, making it one of the largest and most fragmented sectors in the U.

S. economy. • Nolan says unprecedented July contract re-rating and 14% tender rejection in August signal a real, early-stage freight market recovery with rates rising over the next 18 months. • Despite the $604 million nuclear verdict against C. H.

Robinson, Nolan bought more company stock, citing its roughly 60% gain over the prior 18 months and its market-leading position. • Nolan advises brokers to vet carriers by insurance provider and factoring company rather than FMCSA safety ratings, which he says are no longer reliable selection tools.

Speaker 1 [0:00] Our guest Kevin Nolan will be up here in a bit to tell us all about the chaos that has become freight brokerage, his perspectives. There’s no better entrepreneur that has started multiple billion-dollar-plus companies than Kevin Nolan. Kevin, are you with us, sir? Speaker 2 [0:17] I am. How you doing? Good to see you guys.

Speaker 1 [0:20] I gotta ask, what’s the tie? I don’t even know if this is the same Kevin Nolan. Speaker 2 [0:23] I told you guys when I saw you in Cleveland that freight brokerage is changing, right? We’re getting a little A little more dolled up, and no, it’s a big.

It’s a big day to come on and be with you guys, and you know, got to show the industry some respect. It’s it’s done me pretty well. Speaker 3 [0:41] I love it. Keeping your word, you said you were going to clean up your clean out brokers needed to clean up their act and look like professionals, and you’re really doing it. Speaker 1 [0:48] He he did.

Speaker 2 [0:49] It’s Kevin. Speaker 1 [0:51] I mean, the thing I love about Kevin is that you are very blunt. and your statements, high energy and not afraid to say what’s on your mind.

Speaker 2 [0:59] Yeah, look, I think, I think in an industry like ours that has so many moving parts and so many different things that are going to happen, you don’t really have time for the BS. And, uh, you just, you gotta, you gotta get better every day, but you gotta call out what’s the problems and you gotta look in the mirror.

And if you don’t, then, you know, you’re not going to last long in this industry. Speaker 1 [1:24] So Kevin, you started at CH Robinson. I think you and Drew Wilkerson, the CEO of RXO, were in the same office together. Is it— did I get that right?

Speaker 2 [1:32] We were there at different times, but we were trained by the same, uh, group of men and women that were in the Columbia, South Carolina branch. And, uh, you know, that is a true freight brokerage entrepreneurial spirited office that was in Columbia.

We had 2 managers there, Mike Borwick and another one named Kevin Harthin, that, uh, You know, they taught us how to broker freight the right way, be good leaders as well.

Speaker 1 [1:56] Well, there’s obviously something right about that because 2 of the largest top 5 freight brokers came out of that office, which is pretty astounding, the fact that you guys have done so much. Speaking of C. H. Robinson, Kevin, I gotta ask, all of the— we have the Montgomery decision, we’ve got the lawsuit in Texas.

What is the state of brokers? How, how are brokers thinking? Speaker 2 [2:20] I mean, look, I’ll be straight up. I bought more of the stock last week, right? You know, they’re the best at what we do. Uh, maybe they could clean up their bedside manner a little bit, not talk about cutting jobs so much, not talk about AI so much.

But when it comes to the biggest and the best freight brokerage in the industry, you know, that’s C. H. Robinson. And, uh, You know the verdict? It’s nuclear, right? That’s the word everyone’s using. 604. It’s nuclear. What happens in a verdict like that? You know, or a bomb that’s nuclear. You kind of take inventory.

You look around and you say it feels a little off. But you know, CH feels pretty confident that they’re going to be able to work through that and that the driver was not an employee. But yeah, lots going on. But I bought more, you know. And if you look at Robinson. over the history of time on the stock chart.

It’s a beautiful chart going up to that upper right quartile. And, you know, the last 18 months, I think it’s up 60% or so. So, you know, maybe, you know, you got a little bit of a return to the mean with the verdict. And maybe we had some people in the industry that wanted a reason to leave.

You know, they should have just called me and I would’ve held the door open.

Speaker 3 [3:35] But— Speaker 1 [3:35] Well, it does feel like Wall Street, I mean, this is not just CH, but all of the major transports, the truckload operators as well, Even when they were talking about how we’re early in early innings, the fact that we’re early didn’t seem to dissuade Wall Street.

It felt like it was a sort of— they’ve moved on from transportation. That’s one of the reasons I think CH has been beat up is just largely because there’s a sentiment against transportation in the cycle and how Wall Street’s perceiving it.

Speaker 2 [4:05] Yeah, look, we’re over— if you take in international shipping, warehousing, everything else, I believe we’re still over 27% of GDP. Maybe healthcare is the only one that’s larger and more fragmented, but it’s a great place to play and have fun, and it’s, it’s been very good to me, and I’m excited about the industry.

It’s actually younger than me if you take out deregulation from 1980, so, uh, or if you, if you factor that in. So look, I, I’m excited about the space.

Um, I think some people needed a little reason to maybe take some profits or some chips off the table, and That looked like a reason and a little bit of, you know, un understanding or you know maybe just saying there’s some uncertainty in there. And you know investors they love certainty, and so I like uncertainty.

I’m a speculator player, so I’m pretty I’m pretty excited about not obviously about about the 604 or that verdict or anything else, but I’m excited that maybe some of the fakers that came in the industry from 2019 to 2000. ’24 or so, you know, they didn’t help our industry.

Yeah, all that money that came in, I don’t know how much— I, you know, it made us better technology-wise, um, it brought us more attention, but it didn’t help in the, in the sense of freight rates, right? That did not help. Speaker 1 [5:26] It was a race to the bottom. I think freight brokers, in many ways, they— it was a race to the bottom.

Brokers chased the market down. That’s what they would do. And I’ve said, if I were in the shoes of a broker, I would have done the same thing. Obviously, truck drivers don’t want to hear that.

But the reality is a lot of the bottom feeders and talking capacity, folks that were not regulated or taking advantage of the lax of regulation enforcement really brought this industry to its knees.

But it feels like there’s a massive backlash now in Washington, even among the larger motor carriers that may have pushed for some of that deregulation, have realized what they’ve done. Speaker 2 [6:02] Yeah, look, 2021, 2022, crazy times.

You know, I think that— and also there’s, there’s just a certain amount of accidents that happen with all these moving parts. And then you had so many new people that came in that hadn’t really operated in the environment, had elevated costs, and all they cared about was top line, right? How many loads I could get.

Even if you’re losing $800 moving a load of beer, like, that’s a lot of risk you’re taking, right? And I don’t know what you’re trying to accomplish other than showing that you got some load count, but You know, it doesn’t make sense to lose money if there’s risk that’s that’s involved in this business, right?

In the short term, you might do it because you’re in a contract and you gotta balance out and find new capacity, or then wait and talk to them. But you know, long term, losing money at cheap freight is just doesn’t make sense. Speaker 3 [6:55] Yeah, I mean, obviously, I agree. We’re seeing those brokers get squeezed in. We’re seeing the capacity exits.

So we talked about all of the earnings are saying we’re in the early innings. The freight market is still early in this recovery. What’s your take on the freight market for the rest of this year and next year? Speaker 2 [7:10] So contract rates lead everything, right? And contract rate pricing happens October, November historically.

Well, in the last 3 months, contract pricing has happened. There’s never been re-rating that’s been allowed in July. So while everyone thinks this might be a false start or it’s oil driven or whatever else, we are in the early, early stages.

Because I know the RFPs that I’ve seen or are involved in, you know, you remember that you quoted last year way too low and tender rejection is so high because contract rates were not right for the year and weren’t able to be carried on.

And so, you know, I think when October and November, when pricing comes around and shipping managers want to lock in good capacity, you know, they’re going to be way more open to rates That are higher compared to the last three or four years. So contract sets the industry, and then whatever gets rejected, then that’s the basis for the spot market.

So you know I feel pretty good about freight rates for the next eighteen months. Speaker 3 [8:14] Yeah, we’re hearing a lot more mini bids are happening as well. Are you in order to? Speaker 2 [8:20] That’s why your tender rejection is falling, right? Because contract is now acceptable. Right.

The shipper and the broker or the shipper and the carrier have met and said, look, I want to work with you, but I need to work with you at this price. And the shipper says, okay, now. So, you know, you’ve seen it, but it’s still, it’s not a huge, it’s not a huge amount because tender rejections are still in double digits.

Speaker 1 [8:42] But, um, yeah, we dropped from 17% to 14%. So there’s still, these are still elevated. Speaker 2 [8:48] In August, guys. I don’t know if that’s ever happened. You know, back to school is cool, but it’s not that cool. I was moving my daughter into her place at Alabama.

It was pretty busy at Target and Home Depot and all those places, but not 14% tender rejection. Speaker 1 [9:01] That feels like she might get banned from the state going to Alabama. How are you going to— like, what’s the story there? Speaker 2 [9:09] Oh man, I love it. Roll Tide. Yeah, I’m a Bulldog.

OTR still advertises like crazy, and a lot of my leaders in my businesses are from Georgia. But my daughter walked on that campus and said, Dad, this is home, and I want to go here. So you got to cheer for your money a little bit, Craig. Speaker 1 [9:26] Yeah, I know. My wife is a Bama person. My son is at Baylor. He followed in my footsteps.

So, sic ’em Bears. So Kevin, the state of freight in terms of brokers have been put on notice, whether it is accepted, whether it is something welcome or not welcome. The fact is everybody’s on notice. And it started with the Montgomery judgment, which was unanimous.

Followed by the fact that only 3 months later, we had the largest nuclear judgment in trucking history that’s going to be paid out. It was $900 million, but the company didn’t even exist. It’s interesting that a broker was involved in it. No more bigger broker than C. H. Robinson.

It feels like these judgments, these nuclear lawsuits are just going to keep piling up because juries seem to have a lot of sympathy for plaintiffs. When there’s a broker involved. What are your thoughts there? Speaker 2 [10:19] I mean, look, plaintiff attorneys, they’re some of the best businessmen and women I’ve been around, right?

They don’t take things unless they feel like they’re going to make money on them. They only get paid if they win. They are smart, so they’re going to look at the chain of events. The broker is part of that transaction, but so is the shipper if we want to talk about tender rejections. Was there a carrier that fell off that made everyone have to scramble?

I don’t know. I just, I think there’s that there are so many moving parts in a load that the plaintiff attorneys are finding more and more aspects of it. And you know, brokers, look, it’s about who you work with. It’s about making good decisions. Shippers, same way.

Shippers need to make sure they’re working with brokers that can handle and have defenses and have safety in place and all of these aspects of the business that are very important. You know, carrier selection.

You know, my carrier selection men and women, they know that sometimes I get angry at them because they’re limiting capacity, but they’re making right decisions. I say they protect the house, right? You know, and so, you know, and like the other thing that’s so crazy as a broker, we have to manage new line items we’ve never managed before.

Speaker 3 [11:34] Fraud. Speaker 2 [11:36] Up until about 4 or 5 years ago, I didn’t have to put, you know, more than 9 digits, 10 digits in fraud on my budget. Now insurance costs. What am I— what’s that line item going to be?

It’s one of the reasons why investors are a little spookish because they don’t know, you know, what brokers are going to have to budget for in insurance. So I don’t think it’s stopping. Again, there’s a certain amount of miles that are run, and in those miles accidents happen, and brokers are part of those miles that are run.

And so, you know, there’s just— these accidents are going to happen, and you have to make sure that you do what you can to get the right safe people on. And then when they do happen, you know, you handle it. And again, you know, you care about the accidents, you care about the situations that happen, and And you try to, you try to make things right.

Speaker 1 [12:34] Do you, what do you think insurance is going to do? I mean, there’s been so many speculation I’ve heard, you know, this is right after the judgment. I don’t know this has actually played out, but as much as increase of 10x was sort of the extreme. Speaker 2 [12:46] Freight rates aren’t going down. Okay. That’s what I’ll tell you.

Freight rates are not going down. Who you pick in terms of putting on that load. Look at who vets it the hardest. Insurance companies. If they’re with a Great West, yeah, it’s Cadillac’s probably a great trucker on that, right?

If they were sold Progressive out of somebody’s apartment because you knew them and this or that, I mean, like you gotta pay attention to who the agent is, not only the market. Speaker 3 [13:16] All right. Speaker 2 [13:17] Secondly, factoring companies. 90% of truckers factor. You know, you’re giving them money if you’re a factoring company.

How much, you know, look and see and just have these feelings of like, not all trucks are equal just because they came off of a load board or called in or whatever else. Like, they’re not equal.

And so you have to really pay attention and use the tools that are out there to look because the government has come out and said what’s on the FMCSA, don’t use it to judge. And I’m like, well, why have the ratings? Why have a satisfactory or a conditional or whatever else if it doesn’t matter? Speaker 1 [13:55] But I mean, they literally— the jury in the C.

H. Robinson case, which we, you know, likely gets thrown out on appeal, there’s some weird technical— Speaker 2 [14:03] I thought the plaintiff attorney didn’t like 604. He would have liked an 80, right? Or a 70. But 604 is like, man, well, it forces C. H. to— Speaker 1 [14:11] I mean, C. H. has to go all the way. Like, they have to go all the way.

Speaker 2 [14:15] Because if they don’t, I mean, everyone does, right? Like that, that’s a, that’s a, okay. $604,000 was, we’re in this for 7 more years together. Let’s all hold hands, guys.

Speaker 1 [14:24] But the interesting thing was, if you, if you look at that, the jury decided that there was something like, and I don’t remember the exact number, but 28% responsibility for CH Robinson.

And if you took and multiplied the $604,000 by that number, it came out to right at CH Robinson’s insurance limit, which I thought was A really interesting tell that almost the jury was like, hey, let’s go after the insurance number and let’s try to maximize this for the family. That’s at least what I read into it.

I don’t know if it was that intentional, but it’s very suspicious. Speaker 2 [14:55] Texas has a lot going on in, in, in big jury, uh, settlements. And, you know, again, plaintiff attorneys are great businessmen and women, and they want to pick what field to play on. And they That wreck happened in Mississippi, but it was, you know, the jury was in Texas.

So, you know, again, I don’t, I control what I can control and that’s working hard. That’s, you know, getting deeper with our customers and carriers and trying to provide products and services for them to stay on the road and keep moving loads so we can continue making money. But yeah, there’s some uncertainty that’s coming from this.

And, you know, look, I’ve been in the game for a long time and I’ve seen a lot of crazy things come in and out of our industry. This one is is one that definitely kind of put a cloud over the industry for the last I don’t know call it a week or so, but C. H. Robinson had its best quarter ever.

The brokers that I’m hanging out with and talking to feel pretty good about their business, and so you know if we’ve got to put a certain amount per load aside for you know things that are going to happen in a certain amount of miles that are run like okay maybe maybe we got to put more money aside for all of this and uh. You know, again, I like her.

Speaker 1 [16:09] I really like his, uh, conversation about insurance carrier-specific vetting. Which insurance company is the fleet with? Because that may tell you a lot about how the insurance company— because you can’t— I mean, even in the CH case, best bettors.

Speaker 2 [16:25] I mean, I got, I got sales guys that are trying to push insurance through to all kinds of people for truckers, and they are the best vetters at the truck insurance companies because They are, you know, vetting and working and talking to these truckers.

I mean, the big ones, if they have a certain number of units, they go meet them, they go on site, they look at their safety, they look at their hiring practices because they’re putting their necks on the line as an insurance company. So I love vetting by insurance. Little secret.

I’m sure my carrier relations team is gonna be like, why’d you tell them your secrets? Speaker 1 [16:59] Yeah, everything. Speaker 3 [17:00] No, I think that’s great. No, that’s what— that’s actually what I was going to ask. Right. So if we can’t go by the FMCSA safety rating, right. We’re saying that that doesn’t work anymore. They’re satisfactory.

It doesn’t matter. Uh, what, what should brokers go by? So I think that’s a great, a great tip. Look at their insurance provider, look at their factoring provider. What else should they be using? Speaker 2 [17:20] I mean, look, length of time in business, right?

Loading someone who’s got an MC number that’s, that’s 2 weeks fresh, like that’s, that’s crazy, right? And during, during, you know, peak times and peak, you gotta make decisions and everything else. But in that situation, You know, maybe you ask other brokers, you know, hey, how many loads have you done with this carrier?

Hey, you know, this email and number that’s come in, you know, it’s bigtruckin462@gmail. com. You know, I’m about to send them a load con. Does that make sense? Probably not. But, you know, you might want to double check. So again, I would say, you know, look at, look at everything you can look at.

There’s a lot of great products and services that are out there. I think, I think the way we talk to truckers Is going to change over time, whether it’s you know using a third party to do your track and trace for you.

But track and trace is a huge part of freight brokerage because you know we have to know just like when you’re following that Uber driver to your door or Lyft or whatever else, you’re like hey he’s a little far, he’s not gonna make it. I’m gonna be late to the wedding if I go with this guy well or girl.

And then it’s like hey if I try this truck, I’m not gonna make delivery. So I got this guy’s you know way too far away. I gotta find another one. So Tracking and tracing is a very important part of the business.

The truth of the matter is like less than 5% of the loads after pickup probably need some kind of human interaction, but we’ve, you know, because of the fragmentation, I think we’ve spent a lot of offshore expenses, a lot of third parties or whatever else. Track and trace is a huge part of the brokerage business.

How it’s done, I believe, needs to be maybe agreed upon by the shipper and the broker. upfront before the loads, you know, picked up. Speaker 1 [19:13] Well, it’s so much to— I mean, this is a whole new world we’re in. Hey, Kevin, you got 5 trucks behind you. I see the NAPA, good old Atlanta company. Speaker 2 [19:21] I got a bunch. I got a bunch.

Speaker 3 [19:23] Check them out. Speaker 1 [19:23] Oh, we got more. Okay, so let’s— who do we have? Is that Estes at the top? Speaker 2 [19:27] No, this is GTE, which is a, you know, an old school trucking company, reefer group, no longer in business. Coca-Cola, proud to say. Speaker 1 [19:36] And TTA. Okay, I thought that looks like an Estes at the top.

I can’t see it. Speaker 3 [19:39] It’s not zoomed in. Speaker 2 [19:41] This guy, Waffle House. Is that a Waffle House? Waffle House truck and Coke. We’re gonna put that there. Speaker 1 [19:47] I see. Okay, good. Speaker 2 [19:49] Good spot. All over the place with Atlanta. Jimmy Dean sausage, Pillsbury, Napa, Coca-Cola. The Napa CEO came in.

He was here for a meeting and he was like, you don’t have one of my trucks. We got to put it up. Speaker 1 [20:04] Kevin, you got a lot of food there. Diversity or Waffle House? Which is it? Speaker 2 [20:07] Waffle House all day long. Speaker 1 [20:09] All day long. Cracker Barrel? Speaker 2 [20:11] Cracker Barrel’s a good brand, I gotta tell you.

I actually was— when they, uh, when they had that fallout, I was gonna try to put a group together to buy that thing. That is a great brand. Speaker 1 [20:22] We’re big fans of— I’m a big fan of Cracker Barrel over Waffle House. I’ve had too many experiences at Waffle House, we’ll say.

Kevin Nolan, thank you so much for joining us, uh, The post Freight Rates AREN’T Falling: Industry Vet’s Bold Prediction & Advice appeared first on FreightWaves.