At shippers’ confab, defining a ‘fragile’ trucking market

That sort of recent movement in the STRI is why the term fragile was raised.

Strickland noted that tender rejections–contracted freight that is not picked up by a carrier in the contract relationship, which is permissible under its terms–are a good barometer of market strength. 

“Rates have inflationary pressure on them,” Strickland said. “Tender rejections do not. So it’s a little bit more of an apples to apples comparison.”

Although tender rejection rates have climbed starting in November 2025, Strickland said the sharp price spike is nowhere near on the level of what happened during COVID: the “toilet paper” spike, a crash, and a slow gradual rise into the strongest freight market in history, led by stimulus money and consumer desire to begin spending money.

Fuller asked Strickland whether the recent decline to an STRI of less than 14%, after being above 17% in June, was “the pause before the storm.”

Strickland answered by recapping the history of the market over the last 8-10 months. The first rise in the rejection rate, he said, was “carriers finally saying, look, this market is tighter than we can manage. We’re going to start having to reject more freight to make it through.”

Eventually, the market adopted to that new reality, he said. But by mid-May, Road Check week occurred, the normal disruption from Memorial Day, and the shock of Montgomery vs. Caribe Transport II, raising a whole slew of new issues of broker liability, carrier selection and their  impact on capacity.

“This market is so fragile,” Strickland said, “even though we’re having these periods of stability.”

The decline in recent months in part has likely been driven by a switch to moving more freight over intermodal rail services, Strickland said. 

A new baseline

The end result, he added, is “a new baseline.” But even that might not stick, Strickland said, citing the sharp move up in the STRI, which has gone up about 75 basis points in just the past week.

Strickland referred to that as signs of a “bizarro world.” “That tells me that this market is not in a stable position,” he added.

Fuller said he had been speaking with Shelley Simpson, the CEO of J.B. Hunt (NASDAQ: JBHT), who also viewed the trucking market as fragile. But Fuller said she does not view that as necessarily a negative. 

“She was actually the opposite, which is that capacity is so tight that any disruption could cause a significant increase in rejections, a significant tightness in capacity, trucks not showing up,” Fuller said. “So I think the word fragility is important to define because when I hear fragile, I usually think bad.”

Fuller said his Wall Street contacts are expressing concern about a “disorderly” supply chain reminiscent of COVID days. But he said that is not going to happen.

Data on container ships show a tighter market, he said, but the current market “is very orderly. I don’t think anybody should be panicked about this is going to create a supply chain crisis.”

Strickland added that the COVID chaos was driven in part by a huge surge in demand. That is not present in the current market,  he said, citing the SONAR Tender Volume Index.

Fuller discussed a variety of reasons why demand could be down. He cited immigration cutbacks and deportations, “so there’s just not enough people to consume as much food or other products in general.” 

He also cited the impact of GLP drugs and their role in reducing food consumption. “People consume a lot less beer, a lot less soda,” he said. “So there’s just a bunch of interesting sort of things happening today.”

What FMCSA wants

Any discussion about the state of the market today immediately moves over to regulation. Besides the impact of Montgomery vs. Caribe, there is also the immigration and enforcement crackdown out of the Federal Motor Carrier Safety Administration (FMCSA) and its administrator, Derek Barrs.

Fuller said he is in frequent contact with Barrs, who has asked Fuller: “How do I make sure rates always go up?”

The administrator’s view on that issue, Fuller said, is that “carriers that make money spend more on maintenance, more on training, and hire proper and regulated drivers.”

Given that attitude, Fuller said “FMCSA and the regulators are going to continue to put pressure on the market, which is going to continue to force capacity out.”

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