THE DAILY

Thursday, April 9, 2026

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The Daily

EPA permits DEF sensor deactivation for diesel trucks and ag equipment

The EPA has given diesel truck operators an off-ramp from one emissions enforcement mechanism. The industry needs to understand clearly what it does and does not change before anyone starts disabling sensors.

In late March, the EPA announced that trucks and other diesel-fueled equipment, including agricultural machinery, can deactivate their diesel exhaust fluid (DEF) sensors through a software adjustment. What were previously illegal modifications are now permitted. The reason: faulty sensors have been stranding trucks on the roadside. The sensor’s built-in enforcement mechanism, a forced reduction in vehicle speed known as a derate, was designed to compel DEF compliance. Deactivate the sensor, and the derate goes away.

What the rule does not change: The requirement to use DEF in engines from the 2010 model year onward remains in force. NOx emission standards have not changed. Violations still carry a base penalty of $45,268 per incident.

Allen Schaeffer, executive director of the Engine Technology Forum, was direct about the risks of treating the EPA announcement as a DEF exemption. “If you don’t put DEF in a system that’s designed for selective catalytic reduction (SCR), you’re going to risk long-term damage to the vehicle,” Schaeffer told FreightWaves. He added that SCR systems are fully integrated into the engine, not something bolted on and easily switched off. “If you believe that what the EPA has done gives you the ability to skirt this requirement, you’re going to be a lot unhappier in the long run.”

The practical math matters. The current DEF consumption ratio is 2 to 3 gallons per 100 gallons of diesel, a figure that has held since SCR systems became standard on 2010 model year trucks. A driver who skims on DEF will no longer face a derate, but NOx sensors remain active. Jeff Seger, a former Cummins executive now with the North American Council for Freight Efficiency, noted that the NOx efficiency test will still detect DEF quality issues and take appropriate action. Seger described the original sensors as problematic in their shutdowns and redundant to the NOx sensor, essentially too much computing power for a problem the NOx system could catch on its own.

The exposure for operators who skip DEF goes beyond the EPA’s penalty structure. Schaeffer cited warranty voiding, trade-in complications and insurance carrier scrutiny as downstream risks. An insurer investigating a claim on a truck fire, for example, has every incentive to examine whether tampered emissions controls contributed to overheating. Noncompliance can also surface during routine state inspections. The Engine Technology Forum has scheduled an April 20 online webinar to discuss the full scope of the EPA decision, a useful forum for fleets trying to calibrate their response before making any changes.

So What? The derate is gone, but the risk isn’t. Running a post-2010 diesel without proper DEF still voids warranties, strains SCR systems built to depend on the fluid and carries a $45,268 base penalty per violation when noncompliance surfaces. Short-term fuel savings don’t survive a single warranty claim, let alone a failed inspection or insurance dispute. Fleet managers should brief drivers on what the EPA change actually permits and what it doesn’t before anyone touches sensor settings.

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Top Stories

Iran-operated toll plan would add $1 a barrel to Persian Gulf crude; container ships remain grounded

A two-week U.S.-Iran ceasefire has not reopened the Strait of Hormuz for container shipping. Destine Ozuygur, senior market analyst for Xeneta, reported that commercial shipping remains tightly constrained relative to pre-conflict levels and operates within the selective guardrails of an Iran-operated tollbooth. Under a joint toll plan being developed by Oman and Iran, operators of very large crude carriers (VLCCs) holding 2 million barrels of oil would face an additional $1 per barrel charge. Brent crude hit $110 a barrel Monday before settling to just over $90 after the ceasefire announcement. Russia and China vetoed a U.N. Security Council resolution to reopen the waterway. Liner networks have structurally adapted: since March 1, at least five services have added new connections to Jeddah or Mersin, with weekly capacity into Jeddah up 19%.

So What? The ceasefire bought time, not relief. Bookings made today still carry the risk of renewed closure in two weeks. Liner networks have already committed future schedules to alternate routing. That does not unwind quickly even if the strait reopens. Plan for a protracted hybrid routing environment, not a near-term return to pre-conflict conditions.

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Texas authorities intercept $470K in stolen vehicles believed bound for Honduras

Law enforcement in Texas intercepted two semi-trucks carrying approximately $470,000 worth of stolen vehicles believed en route to Honduras. The FreightWaves analysis by Phil Brink focuses on how cargo like this gets inside normal freight moves in the first place. Access is typically gained during seemingly routine transactions. Documentation looks legitimate, the carrier appears real and the move looks operationally sound while the shipment is quietly redirected. By the time freight is loaded and rolling toward an international exit point, the recovery window has already started closing. Cross-border cases narrow fast: once assets cross a border, jurisdiction shifts and tracing becomes exponentially harder.

So What? The loss does not happen at the point of pickup. It happens before that, when handoff decisions are made on unverified information. Verifying identities and validating relationships before control transfers is the only place in the process where prevention is still possible.

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USPS trucking contractors and postal employees sentenced in $15M contract kickback scheme

Four defendants received a combined 99 months in federal prison in a bribery scheme involving U.S. Postal Service trucking contracts, the U.S. attorney for the Northern District of Texas announced Tuesday. Zechariah Yi and Tai Ryoung Rho, both USPS employees, solicited approximately $1.5 million in kickbacks from the owners of Assured Trucking Inc., Postal Box Inc. and JY Logistics in exchange for securing contracts worth roughly $15 million over six years beginning in 2015. Sentences ranged from three months to 42 months. Defendants forfeited two vehicles and more than $300,000 in cash. “At the expense of the integrity and fairness of the government contracting process, these defendants resorted to bribery and corruption simply to line their own pockets,” said U.S. Attorney Ryan Raybould.

So What? The scheme ran six years and moved $15 million before prosecution. For carriers competing on government freight contracts, a corrupt incumbent at that scale represents a genuine competitive cost. Thin procurement oversight creates this risk, and the FBI’s involvement signals that the government is watching.

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Southern California port carrier files Chapter 11 with up to $10M in liabilities

National Road Logistics LLC, a Signal Hill, California-based drayage and intermodal carrier, filed for Chapter 11 bankruptcy Monday in the Central District of California, citing debts tied to leases, vendor obligations and contract disputes. The company listed estimated assets between $1 million and $10 million against liabilities in the same range. But at the time of filing, total assets stood at roughly $1.6 million, including $411,000 in cash. The largest unsecured creditor claims: $9.5 million from Nordstrom (lease deficiency), $8.3 million from Prologis (vendor claims) and $7.5 million from Sunshine Distribution (breach of contract). The carrier operates 27 power units and 35 drivers, primarily hauling containers from the ports of Los Angeles and Long Beach.

So What? A carrier with $1.6 million in actual assets facing a single $9.5 million lease deficiency claim has limited restructuring runway. Watch the LA/Long Beach drayage market for further capacity stress as smaller port operators continue absorbing high costs and volatile volumes.

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From the Research Desk

What We’re Watching

▸ DEF sensor deactivation rollout. The EPA change is software-based and takes effect now. Watch fleet operators and owner-operators weigh short-term cost savings against warranty exposure and NOx compliance risk. The Engine Technology Forum’s April 20 webinar will be the first major industry guidance event on the decision.

▸ Hormuz ceasefire durability. The U.S.-Iran two-week window expires soon. Even a clean reopening won’t immediately reverse structural routing adaptations. Liner networks have committed future schedules to alternate lanes, with Jeddah capacity up 19% since March 1. Track booking data for signals on when carriers commit back to Persian Gulf routing.

▸ LA/Long Beach drayage capacity. National Road Logistics’ Chapter 11 filing is the latest sign that Southern California port carriers are absorbing serious financial pressure. With $1.6 million in assets against claims exceeding $25 million, restructuring options are limited. Monitor whether other small drayage operators serving the twin ports show similar stress in the coming weeks.

That’s your Daily for today. See you tomorrow.

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