Market InsightNews

The Missouri River Valley needs attention, according to the tender rejection index

(Photo: TruckStockImages)

Trucking capacity shortages roll like waves in the ocean. Rarely do you see the entire country in short supply of trucks. Regions will be overbooked, and then capacity will disappear as trucks move in and out as they chase (well-paying) freight. Currently, the Mississippi River Valley is experiencing a wave as shippers are seeing load tenders rejected at a higher pace than the rest of the country according to the Outbound Tender Rejection Index (OTRI).  

The middle of the country is widely known for producing grain crops like wheat and corn.  Due to the proximity to the farms the region also houses a large amount of food production facilities like General Mills and Kraft who process the grain into food products. With heavy attention on the produce cycles out West, the middle of the country is being left unattended.  

  (Image: National Tender Rejection Index Heat Map)
(Image: National Tender Rejection Index Heat Map)

Produce season is in swing, and states like California and Florida have pulled many of the nations’ reefer trailers into the West and South leaving the middle of the country in need as the market experiences a surge of agricultural shipping. Outbound load tender rejections from the Omaha market area have increased 500 basis points since early May. The Northwestern Arkansas market has seen almost an 800-basis point increase over the same time.

Keep in mind these are two relatively lower volume markets compared to the rest of the country.  The percentage of rejections will be more sensitive to market swings, but the point remains that carriers are less willing to accept loads offered in the region compared to other parts of the country. A supply and demand disparity exists.

According to Jared Flinn of, the northern regions of the U.S. provide weather cool enough for farmers to keep surplus supplies of grain over winter and wait to ship it out when it becomes more desirable in the spring after supplies have diminished. It becomes imperative to move it quickly before it becomes too warm.

With temperatures warming rapidly after a relatively cool spring, the temperature-controlled trailers are in high demand. According to the Weather Underground, Des Moines, IA had an average temperature of 45 degrees in the month of April. So far, in May, the average temperature has risen to 67 degrees. The 22-degree temperature swing has made it necessary for farms to clear overwinter supplies and get the grain to a facility with little time to lose. 

With the grain and other base ingredients moving into the food production facilities more rapidly, shippers like General Mills and Kraft will need to push the finished product out to the food distribution centers. With truck availability in the country’s midsection having less density in general, the effects are felt more intensely.

The uptick in the middle of the country may be indicative of capacity tightening in other parts of the country as we head into the summer months. The Los Angeles market OTRI, which had been gradually heading towards stability, has increased to over 12% after settling under 8% in mid-April. This is a pattern many shippers and carriers are familiar with after 2017 when the delayed produce season disrupted networks into June.

  (Image: Los Angeles 1 Month TRI)
(Image: Los Angeles 1 Month TRI)

If the market remains active with shippers pushing freight into strained networks, the spot market is sure to heat up again soon. DAT is seeing dry van rates in the Los Angeles area increase significantly. The rate from L.A. to Dallas averaged $1.76 in April. Over the last 7 days the lane is averaging $1.97. 

Over the last year the freight market has been more sensitive to surges in volume than in the previous several years. We could be entering a new era of general market instability as freight demands surge in different parts of the country, sending a ripple effect of capacity shortages into other areas. For certain, the periods of instability have outnumbered the calmer times in the last 12 months. If you need validation just ask the shippers who received 6-10% rate increases this winter. 

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Zach Strickland, FW Market Expert & Market Analyst

Zach Strickland, the “Sultan of SONAR,” curates the weekly market update. Zach is also a one of FreightWaves’ Market Experts. With a degree in Finance, Strickland spent the early part of his career in banking before transitioning to transportation in various roles and segments, such as truckload and LTL. He has over 13 years of transportation experience, specializing in data, pricing, and analytics.