Latest news with #OutboundTenderRejectionIndex
Yahoo
2 days ago
- Business
- Yahoo
Truckload's path to equilibrium
The U.S. truckload market has undergone significant transformation since the COVID-19 pandemic, with the industry experiencing dramatic swings in capacity, demand and pricing. In the aftermath of the pandemic, the truckload market found itself awash in excess capacity. This oversupply stemmed from a combination of factors, including the entry of new carriers during the pandemic-era freight boom and subsequent softening of demand as consumer spending patterns normalized. The oversupply situation was further complicated by volatile trade policies, with tariff rhetoric accelerating in early 2025 and creating uncertainty in import patterns. As market conditions deteriorated, thousands of small- and midsize trucking carriers faced unsustainable economics, leading to widespread business failures and market exits. This natural, if painful, adjustment mechanism began to rebalance the supply-demand equation that had tilted heavily in shippers' favor during the post-COVID era. The exodus of carriers was driven by significant cost pressures. Publicly traded freight brokerage RXO noted in its quarterly market report that 'the average cost to operate a truck is 34% higher over the past decade but absolute spot rates are largely the same as they were in 2014.' This economic reality made it increasingly difficult for carriers to maintain profitability, particularly smaller operators without the scale or financial resources to weather prolonged market weakness. According to RXO, the truckload market 'has remained relatively calm' with spot rates continuing to step higher despite disruption from rapidly changing tariff policies. The market has followed a trend – largely in place since 2023 – of soft freight demand, reductions in carrier capacity and gradually stabilizing situation created what RXO described as 'a difficult landscape for carriers,' with many 'running with unsustainable unit economics.' This harsh operating environment accelerated the pace of carrier exits, despite 'a couple of atypical months of operating authority growth in March and April.' By mid-2025, the prolonged exodus of carriers finally brought the market closer to equilibrium. As RXO observed in its quarterly forecast, 'We're as close to equilibrium, in terms of carrier supply and shipper demand, as we've been in over two years.' The broker noted that 'relatively speaking, the capacity situation is much more fragile than at this time last year.' This newfound balance began manifesting in key market indicators. The national average Outbound Tender Rejection Index, which measures the percentage of tendered loads rejected by carriers, climbed to 6.67% by June 2025 – reaching the threshold where rejections start putting inflationary pressure on spot rates. Most enterprise shippers prefer to maintain tender acceptance percentages in the upper 90s, meaning many were already experiencing problematic service levels. The data showed significant improvement in rate trends as well. TL spot rates (excluding fuel) were up 9.1% year over year in the first quarter of 2025, following an 11.6% growth rate during the fourth quarter of 2024. Contractual rates also increased 1.4% year over year in the first quarter – the first annual increase since the end of 2022.A notable development in the recovering market has been the emergence of significant regional disparities. By June 2025, tender rejection rates for truckload shipments originating in the Southeast surpassed 10% – marking the first time in nearly three years they reached that level. In contrast, rejection rates for freight departing the West Coast remained well below the national average and were the lowest among the seven major U.S. regions. This contrast was particularly striking given the focus on imports and Southern California ports that handle the bulk of U.S. container traffic. While tender volumes out of the Southeast were down 6% year over year, West Coast volumes declined 14% annually, suggesting that demand alone wasn't driving the regional disparity. Part of the explanation lies in intermodal transportation patterns. Much of the long-haul freight demand from the West shifted to rail, with intermodal capturing a large share from the truckload sector. Loaded container volumes moving by rail out of Los Angeles remained up year over year, even as they dipped alongside declining import levels. Meanwhile, long-haul tender volumes out of Los Angeles dropped 26% annually. The Outbound Tender Rejection Index measures the percentage of truckload tenders rejected by carriers and serves as an indicator of the relative balance of supply and demand in the truckload market. (Chart: SONAR. To learn more about SONAR, click here.) By June 2025, the 'interior' markets of Atlanta, Chicago and Dallas showed the tightest capacity conditions among major freight centers. Atlanta's outbound tender rejection rate reached 8.89%, continuing an upward trend that began in late February. Chicago's rejection rate stood at 7.07%, while Dallas reported 6.86% – all above the national average. The market trajectory for truckload rates remains 'inflationary,' according to RXO, though trade policy presents a significant wild card. The 3PL classified the early part of 2025 as 'still primarily a shippers' market' but noted that 'with a continued difficult landscape for carriers, and (in many cases) decreasing 2025 contract rates setting in, it could set the stage for volatility later in 2025.' The broader trend for 2025 calls for more carrier exits and high operating costs to keep upward pressure on rates. RXO pointed to the possibility of a more material uptick in rates if trade tensions calm ahead of peak season and carrier exits become more pronounced. In that scenario, 'contract rates and routing guides set in the softer market of 2024 may not survive a tighter market late in 2025, when the spot market will likely become more lucrative than the contract market.' Transportation prices were forecast to be significantly higher a year from now, with industry respondents returning a reading of 75 for the pricing outlook in the Logistics Managers' Index. There is a growing consensus that 'the worst-case scenarios associated with potential tariffs will not come to pass,' and 2026 could reflect a more robust transportation recovery, barring a macroeconomic U.S. truckload market has traveled a difficult road since the pandemic, moving from extreme oversupply to a more balanced state through the painful but necessary process of carrier exits. This gradual market healing has finally restored equilibrium between supply and demand, enabling carriers to regain pricing power as evidenced by rising tender rejection rates and strengthening spot market conditions. The market remains sensitive to external shocks, particularly trade policy developments and potential economic headwinds. However, the significant reduction in truckload capacity over the past year has made the market more responsive to even modest demand changes. As one analyst noted, 'a significant reduction in truckload capacity over the past year has made the market more vulnerable. Even with a somewhat bearish outlook for demand, the truckload sector appears increasingly reactive — and poised for volatility.' The post Truckload's path to equilibrium appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
28-05-2025
- Business
- Yahoo
How Tender Rejections Predict Your Next Rate
Every week, thousands of loads move across the country before a single rate hits the load board. That's because most freight—especially high-volume freight—starts with a contract. Shippers send out tenders to their core carriers, usually the same ones every week. But when those carriers say no? That's when things start to shift—and it's also when the money starts moving. The problem is, most small carriers and owner-operators aren't watching what's happening upstream. They're watching load boards. They're looking at what they got paid last week. And by the time they realize something's changed, the smart brokers have already made their move. This article breaks down what a tender rejection is, how it's tracked, and how it can predict your next rates—if you know where to look. Let's break it down simple. A tender is a shipment offer from a shipper to a contract carrier. Think of it like this: a shipper says, 'We've got a load leaving Atlanta going to Columbus. Can you move it for $1,950 like we agreed last month?' If the carrier says yes, that's accepted. If they say no—maybe they don't have a truck, or the spot market's paying better—that's a tender rejection. When enough of those get rejected in a given market, that freight has to go somewhere else. And where does it go? The spot market. This is where it gets critical for small carriers. You might not have access to the initial tender, but once it gets rejected, you're in play. If you're watching rejection data, you can position your truck before the freight hits the board—and you can negotiate stronger because you know the market's getting tighter. The freight market doesn't run on guesswork. Large shippers and brokers use data tools like SONAR from FreightWaves to track trends. One of the most important metrics in SONAR is the Outbound Tender Rejection Index (OTRI). This number shows what percentage of loads are being rejected by contract carriers in a specific market. If the OTRI in Chicago jumps from 5% to 10%, that means twice as many loads are being turned down. That's a signal that capacity is tightening (available trucks are declining)—and spot rates are likely to rise in that market in the next few days. Carriers who are watching this in real time can reposition their truck or push harder on rate in markets where tender rejections are rising. Here's how to read the signal: OTRI under 5% – Contract freight is being covered easily. No major pressure on spot rates. Expect soft rates on load boards. OTRI between 5–10% – Capacity is getting tighter. Spot market may start to absorb overflow freight. Rates likely to rise slightly. OTRI over 10% – Shippers are struggling to cover freight. Brokers are calling more carriers. Spot market is heating up fast. If you're running a lane and you see OTRI climbing for that origin city, that's a real-time green light to hold your ground on rate—or even raise it. Let's say you're parked in Dallas. You're thinking about bouncing to Houston to find freight. You check SONAR and see: Dallas OTRI = 4.3% Houston OTRI = 11.2% What does that mean? It means Houston contract carriers are rejecting more freight—likely due to higher-paying spot market options or truck shortages. That's your signal. So instead of sitting on Dallas at $2.15/mile, you make the short reposition to Houston, where brokers are under pressure and spot rates are climbing. A move like that could add $400–$600 to your week with no change in total miles—just a smarter play based on rejection data if you play it right. Brokers aren't guessing what to pay you. They're watching tender rejections too. If OTRI is low, they know they've got leverage. They'll tell you: 'That lane's been soft all week—we've got plenty of options.' But when OTRI jumps? That's when you hear: 'I've got a shipper that needs coverage right now—can you do it for $2,400?' Most of the time, they knew that lane tightened days ago—they just waited to call when the pressure hit. Carriers who know OTRI numbers ahead of the phone call get to flip the script. They stop chasing what's posted and start controlling what they're worth. If you're not a SONAR user (or part of the Playbook Masterclass where we break this down weekly), you can still spot rejection patterns through: Load board volume shifts – sudden spikes in load count often follow tender rejections Rate swings by region – if the same lane suddenly pays $300 more than last week, contract freight likely spilled Broker behavior – when brokers start calling instead of posting, something's changing Time to cover loads – when it takes longer to get a truck booked, it usually follows rejection pressure The goal is to make these signals part of your planning routine—not something you notice after you're already loaded. Here's how to make this part of your daily workflow—whether you're running one truck or managing a small team. Figure out the top 3–5 origin markets you run out of most often (example: Memphis, Harrisburg, Dallas, Joliet). Track whether rejections in those markets are rising, falling, or flat. Even a 1–2% increase is a signal. If OTRI is rising in that market, don't undercut yourself. Quote strong, walk if the math doesn't work. If OTRI is low, build in buffer lanes or add short hauls to compensate for weaker pricing. Move your truck before the crowd. If rejection rates are climbing in a nearby market, reposition early—don't wait until everyone else is chasing the same freight. Let's be clear—OTRI is not a silver bullet. It won't tell you: Whether the freight is high quality (some rejections are for junk freight) Whether brokers are paying what they should (some will lowball even in tight markets) Whether accessorials, wait times, or backhauls make it a profitable run But OTRI does tell you where the leverage is shifting. And in trucking, leverage = money. Tender rejections are the earliest signal you'll ever get that a rate is about to change. If you wait until the load board reflects it, you're already behind. If you wait until a broker tells you 'things are heating up,' it's too late. But if you're watching OTRI—and making decisions off that data—you stop reacting and start running your truck like a business. Because this market doesn't reward who's working the hardest. It rewards who's reading the game the best. The post How Tender Rejections Predict Your Next Rate appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
27-05-2025
- Business
- Yahoo
Tender Rejections: The Freight Market's Crystal Ball
What's a tender rejection rate? Few indicators are as telling in the dance of freight logistics as the tender rejection rate. This metric, often underappreciated outside logistics circles, offers a window into the balance of supply and demand, signaling shifts in market dynamics before they fully materialize. Tender rejections occur when carriers decline loads offered under contract by shippers. A rising rejection rate typically indicates tightening capacity, as carriers opt for more lucrative spot market opportunities. Conversely, a declining rate suggests ample capacity and potentially softer spot rates. Current Trends As of May 2025, the national Outbound Tender Rejection Index (OTRI) stands at 6.69%, reflecting a slight increase from previous weeks. This uptick suggests a modest tightening in capacity, though rates remain relatively there are disparities. The Southeast has seen rejection rates surpass 10% for the first time since 2022, indicating a significant tightening in that area. In contrast, the West Coast, particularly Southern California, continues to experience low rejection rates, reflecting abundant capacity. Implications for Fleets Understanding tender rejection trends is strategic planning. In regions with rising rejection rates, carriers may find opportunities to negotiate higher rates or prioritize spot market loads. Conversely, maintaining strong relationships with shippers and focusing on efficiency becomes paramount in areas with declining rates. While current trends suggest a gradual tightening in certain regions, the overall market remains balanced. Carriers and owner-operators should monitor rejection rates as they offer early signals of market shifts. This helps make proactive adjustments to operations and rejection rates are an indicator of the freight market's health. By staying attuned to these metrics, carriers and owner-operators can make better decisions, understanding the industry's complexities and how they will affect the near- and long-term future of trucking. The post Tender Rejections: The Freight Market's Crystal Ball appeared first on FreightWaves. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
19-05-2025
- Automotive
- Yahoo
Roadcheck effects persist as truckload market still tightening
The Commercial Vehicle Safety Alliance's (CVSA) annual International Roadcheck inspection blitz has come and gone, but its effects on the trucking industry are proving more persistent than in recent years, revealing a market that may be more vulnerable to disruption than previously thought. The three-day enforcement initiative, which took place last Tuesday through Thursday, saw inspectors across North America conducting comprehensive examinations of both driver credentials and vehicle conditions. While Roadcheck week traditionally causes temporary market tightening as drivers opt to sideline their trucks, this year's aftermath suggests deeper structural issues in the freight market. During the inspection period itself, truckload capacity tightened noticeably, with the Outbound Tender Rejection Index (OTRI) increasing by over half a percentage point in just a few days. National tender rejection rates jumped from 5.21% on May 11 to 6.48% by Sunday. Simultaneously, the National Truckload Index (NTI), which tracks aggregated dry van spot rates, rose approximately 4.5% – from $2.19 a mile to $2.29 a mile – over the same period. What makes this year's Roadcheck response particularly notable is that these elevated rejection rates have persisted beyond the inspection period itself. The sustained tightening indicates this is potentially the most vulnerable the truckload market has been in years, despite broader economic historical context highlights just how unusual this year's reaction has been. In 2021, Roadcheck had minimal market impact as spot rates were already climbing 1%-2% weekly, creating strong financial incentives for drivers to remain operational despite inspection risks. The 2022 event was similarly muted, despite a collapsing demand environment, due to the sheer volume of carriers still on the road during that transitional market phase. Last year marked a more significant response to Roadcheck than previous years, though still relatively marginal and complicated by the Memorial Day holiday. This year's more dramatic and sustained market reaction suggests a fundamental shift in the balance between supply and demand. The current market conditions help explain this heightened sensitivity. Spot rates had declined by 8% over the previous three months, reflecting broader stagnation across the economy and freight sector. In this challenging environment, many carriers are operating with minimal financial cushion, simply trying to cover basic operational costs. A key insight from the SONAR data is that the surge in rejections wasn't driven by increased demand. The National Outbound Tender Volume Index (OTVI) showed stable tender volumes from shippers to carriers throughout the period, confirming that the tightening stemmed exclusively from the supply side of the year also introduced a variable that likely contributed to the market dynamics: the enforcement of an existing rule requiring drivers to speak and read English. While it's unclear if this was a focal point in this year's inspections, it potentially contributed to an increased number of drivers choosing not to operate, further constraining available capacity. For freight brokers and carriers, the lingering effects of Roadcheck could signal challenging conditions ahead. If this summer follows typical seasonal patterns, shippers will likely have an increasingly difficult time securing capacity, especially considering that current rejection rates are already approaching last year's summer peak levels. In 2023, rejections climbed from Roadcheck levels to 6.59% by early July, ahead of the Independence Day holiday. Looking ahead, while Roadcheck week alone won't fundamentally alter the difficult conditions facing the industry, its magnified impact this year serves as an important indicator of underlying market fragility. Additional potential disruptions loom on the horizon, including a recent surge in import bookings following the Trump administration's softening stance on tariffs with China. This could trigger a wave of inbound freight and contribute to a summer uptick in demand. The transportation industry may be approaching the catalyst it has been anticipating. While the immediate effects of Roadcheck will fade, the combination of evolving trade conditions, potentially low inventory levels and the demonstrated sensitivity to capacity disruptions suggests the market may be at an inflection point. The post Roadcheck effects persist as truckload market still tightening appeared first on FreightWaves.
Yahoo
15-05-2025
- Automotive
- Yahoo
Blitz week blip or sizzlin' summer freight market?
Welcome to the WHAT THE TRUCK?!? Newsletter presented by Drive Axle. In this issue: Is this hot week in freight markets sustainable; I-75 crash update; and more. Dead cat bounce or sustained summer? SONAR Blitz week bop — CVSA International Roadcheck week ends today, but the early impacts are already being felt across the supply chain. One broker said, 'Just got off the phone with a customer who said it's the 'worst' DOT Blitz week they've ever seen … and dude has been at this for a looooong time.' Brokers who bet against a tight market are taking it on the chin this week, one few truckers will shed a tear for after the three-year freight recession they've been through. SONAR The Outbound Tender Rejection Index in SONAR is also popping as trucks park and capacity tightens this week. Will the 90-day pause on tariffs be enough to encourage another massive pull forward? The very obvious black cloud hanging over freight was the cancellation of ocean bookings. Like it or not, U.S. supply chains and manufacturing are very tied to China as many raw materials also originate there. However, as soon as the 90-day pause was announced on tariffs, ocean bookings started to rates could get pricey as steamship lines issue peak season surcharges and capacity tightens. During the tariff crisis, many of the larger ships were repositioned on other lanes, leaving smaller boats with less capacity to deal with the demand. SONAR Will that amount be enough freight volume to keep trucks full through summer? Very likely. Some even predict a mini-COVID market-like event. Long term is where it gets more iffy. After all, tariffs are now still 30%-plus higher than they were prior to the trade war, and they stack upon preexisting tariffs as well. And while wholesale prices may have fallen, shippers are still dealing with much higher import costs than they previously were. Signals to watch? English language proficiency enforcement and how it impacts capacity. If DOT or ICE gets aggressive in targeting truckers like they have been with construction, you'll see this industry get very skittish in no do you think? Do you think blitz week momentum meets increased shipper demand, or is this just a dead cat bounce and the market will fall back to the bottom? Email me. Don't miss WHAT THE TRUCK?!? on Friday where we'll go deep into SONAR's new Trade War Command Center. It just keeps getting worse ABC 7 The tragic Mother's Day crash on I-75 in Chattanooga, Tennessee, keeps getting more infuriating. As we covered on Wednesday's WHAT THE TRUCK?!?, the driver involved in the crash that killed two fathers and sent a family to the burn unit has been charged in the incident. Joseph Antoinier faces charges of reckless homicide, felony reckless endangerment and reckless aggravated assault. News 3 reports, 'Police say Antoinier failed to brake before hitting five other vehicles. Two people are dead, while five are still in the hospital.'Eyewitnesses say he entered slowed traffic while driving 'erratically' at a high rate of speed and failed to brake. It's similar to another fatal incident in Austin, Texas, earlier this year. Amazon, the carrier, and the driver are now being sued for $100 million in that incident. East Ridge Police Amazon spokesperson Amber Plunkett said that the load was booked via Amazon Relay and added, 'This is a horrible tragedy, and our thoughts are with all those involved.' According to Amazon, 'Amazon Relay allows authorized third-party carriers to haul freight loads on behalf of Amazon.' So, who was the carrier on the load? East Ridge Police have confirmed Joseph Antoinier was employed by Valparaiso Trucking Corp. East Ridge Police Valparaiso Trucking Corp. owner Wisner Florestant told News 9, that '7 of his drivers are owner-operators and do not drive his trucks. He added that Joseph Antoinier is responsible for his own actions, 'as a grown man who's been driving for years.'' While Valparaiso Trucking Corp. may want to wash its hands of the event, the reality is, authorities allege that the actions of the company's driver destroyed a family. GoFundMe Police say 23-year-old Lane Smith, from Fayetteville, Tennessee, was killed in the accident. He, his wife and two children were returning from a Mother's Day dance competition when they were struck by Antoinier's truck. Lane tragically did not survive, while his children and wife all suffered severe burns and are have a GoFundMe set up to help cover medical bills, the funeral and this devastating loss. If you'd like to support them, you can here. WTT Friday SONAR's Trade War Command Center; Nikola owner speaks; Truckers for Troops – Friday on WHAT THE TRUCK?!?, I'm catching up with SONAR's Will Hopping to learn all about their new Trade War Command Center, which tracks trends, rates and disruptions in real time. William Hall took the plunge about a Nikola hydrogen truck. Now that the company is bankrupt, have he and other owner-operators been left holding the bag. He shares his experience and updates us on his ownership experience. OOIDA is celebrating its annual Truckers for Troops event. Over the past 17 years, OOIDA has raised more than $800,000 and sent more than 3,278 care packages, serving more than 39,276 members of the military. Norita Taylor fills us in. Plus, headlines, market vibes and more. fit – Head on over to to get our made-in-the-USA T-shirt collection. Also, now all products get free shipping in the U.S. Now on demandThanks for reading, and feel free to forward this to a friend. Tweet @ Dooner Email me Subscribe to the newsletter Subscribe to the show Apple Podcasts Spotify YouTube TikTok Twitter Or simply look up WHAT THE TRUCK?!? on your favorite podcast player. Or, if you have SiriusXM, tune in to the show Monday, Wednesday and Friday at 5 p.m. Eastern time on Road Dog Trucking Channel 146. Exit through the gift shop: Don't be a stranger, Dooner The post Blitz week blip or sizzlin' summer freight market? appeared first on FreightWaves.
