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Low-volume Northwest becomes nation’s tightest region

Seasonal demand and weather drive rates higher out of Pacific Northwest

Photo: Jim Allen - FreightWaves

Chart of the Week: Outbound Tender Reject Index – Northwest, West, Midwest, Southeast, Southwest, Northeast, Mountain Prairie SONAR: OTRI.URNW, OTRI.URWT, OTRI.URMW, OTRI.URSE, OTRI.URSW, OTRI.URNE, OTRI.URMP

In less than a month, the low-volume Pacific Northwest has gone from being one of the easiest regions to source truckload capacity to the most difficult, according to regional outbound tender rejection rates. 

Tender rejection rates (OTRI) are the percentage of loads being rejected for coverage by a carrier. The higher the value, the more difficult it is for a shipper to get capacity, which eventually puts upward pressure on prices. Currently, the Northwest region — consisting of Washington, Idaho and Oregon — leads the country with a 6.1% OTRI value, something the region rarely can claim. So what are the driving forces behind this supposedly anomalous shift in market behavior?

‘O Christmas Tree’

Oregon is one of the top producers of the nation’s Christmas trees, and hauling these trees can carry premiums on the spot market. Carriers can get lured into grabbing higher-priced tree loads over what is normally some of the cheapest freight in the country moving out of the Northwest.


Spot rates for loads moving from Portland, Oregon, to Sacramento, California, have jumped 30% over the past month to hit their highest levels since May, according to FreightWaves TRAC. Most Christmas tree loads are handled on short-term rate agreements due to their extremely seasonal nature. Christmas tree season lasts for only about a month of the year in earnest. 

Harvest time

Other seasonal harvests can also have an impact on truckload capacity this time of the year in this region. According to the U.S. Department of Agriculture, potatoes and apples are the highest-volume produce shipments by weight moving by truck over the past 30 days. Around 72% of the volume of apples has originated in Washington, while about 33% of the potatoes have originated in Idaho and Washington over the past month. 

Courtesy USDA

The Northwest harvests do not always have a meaningful impact on nationwide capacity, but they are much like their counterparts in California where they can have sharp, short-term impacts to the region. The first apples tend to have the most dramatic impact on the market in September when stores pay a premium for what is considered the highest-quality fruit. Northwest rejection rates lead the nation at the end of September with a value over 9%, which is probably no coincidence.


Winter is here

The Northwest has been pummeled by several large, long-lived storms over the past few weeks, which have dropped feet of snow on some of the high mountain passes. While snowy conditions are not new in the region, they can disrupt networks by delaying trucks long enough that drivers miss pickups and run out of hours. The timing of these systems is also helping to provide an extra layer of disruption. Trucks have to cross mountain passes to get in and out of the larger shipping centers. 

Low volumes make it easier for rejection rates to swing more wildly in this region. The Northwest currently only accounts for approximately 2.6% of the total outbound contract freight demand. While this puts less pressure on capacity in general, it also means carriers do not place priority on covering this area any more than necessary. 

Low-volume markets tend to have the wildest swings in capacity conditions, especially ones like the Northwest which are laden with seasonal freight.

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

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2 Comments

  1. Laurie

    Yes, none of this has anything to do with today’s incompetent, overbearing public policy that is restricting supply and sending prices soaring. It’s just something that happens in the winter. Particularly this winter, for some reason.
    But there’s nothing to see here. Nothing at all.

Comments are closed.

Zach Strickland, FW Market Expert & Market Analyst

Zach Strickland, the “Sultan of SONAR,” curates the weekly market update. Zach is also 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.