• ITVI.USA
    15,415.310
    54.710
    0.4%
  • OTLT.USA
    2.761
    -0.007
    -0.3%
  • OTRI.USA
    21.110
    -0.300
    -1.4%
  • OTVI.USA
    15,387.520
    55.710
    0.4%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
  • ITVI.USA
    15,415.310
    54.710
    0.4%
  • OTLT.USA
    2.761
    -0.007
    -0.3%
  • OTRI.USA
    21.110
    -0.300
    -1.4%
  • OTVI.USA
    15,387.520
    55.710
    0.4%
  • TSTOPVRPM.ATLPHL
    3.300
    0.000
    0%
  • TSTOPVRPM.CHIATL
    3.140
    0.190
    6.4%
  • TSTOPVRPM.DALLAX
    1.590
    0.150
    10.4%
  • TSTOPVRPM.LAXDAL
    3.330
    0.020
    0.6%
  • TSTOPVRPM.PHLCHI
    2.170
    0.020
    0.9%
  • TSTOPVRPM.LAXSEA
    4.080
    0.130
    3.3%
  • WAIT.USA
    125.000
    -1.000
    -0.8%
Chart of the WeekTop Stories

Southern truckload capacity vanishes before the 4th

Atlanta and Dallas tender rejection rates hit all-time highs in late June

Chart of the Week: Outbound Tender Reject Index – Atlanta, Dallas  SONAR: OTRI.ATL, OTRI.DAL

Just when shippers and freight brokers thought the U.S. freight market was easing, capacity tightened to record levels in two of the nation’s largest freight centers: Atlanta and Dallas. The outbound tender reject index (OTRI), which measures the rate at which carriers reject electronic requests for capacity from shippers, jumped to its highest values since the index was created back in early 2018. So the big question is why is this significant? 

Calling the past year an anomaly would be an understatement in the context of recent history in just about any industry, but most certainly trucking. Normal seasonal patterns have been difficult to identify since the start of the pandemic, although some semblance of pre-COVID behavior still remains around the holidays. 

The end of June typically represents the first of two annual “peak” seasons for the U.S. freight market. These peaks are defined by an increase in spot market activity or transactional freight that operates outside the standard contractual agreements between shippers/brokers and carriers. Tender rejection rate increases typically lead spot market rate increases by a few days as they are based on shipper requests in the earliest part of the shipping process.  

Over the past year, tender rejection rates and spot rates have been unnaturally high, averaging over 20% since Labor Day 2020 and over $3/mile according to Truckstop.com’s top 100 lanes. For context, national rejection rates averaged just over 6% and spot rates hovered around $2.10/mile in 2019. 

Over the past few months, rejection rates have been trending lower, slowly falling from around 28% in late March to 22.5% in early June. Spot rates have been trending slightly lower, but are also propped up by rising fuel costs. 

National rejection rates started climbing once again in mid-June with and have seemingly peaked for the season, right around 25%. The fact they have not pushed back closer to the 28% figure is an indication the market has stabilized in comparison to where it was last Thanksgiving and March, albeit slightly. 

The aggregate stabilization hides the underlying capacity situation in two of the nation’s most prominent freight hubs, Dallas and Atlanta. The two markets’ outbound tender rejection rates blew past their peak values of the previous year. Atlanta topped out at 28.5% on Nov. 21, while Dallas peaked around 28.2% after the polar vortex event in February. Dallas’ outbound rejection rate was at 30% on Thursday, while Atlanta peaked around 31.2% on June 25. So why have these two markets been more exposed to capacity disruption than others? 

These two markets have been competing with increasing demand arising from the Houston and Savannah, Georgia, markets — both of which have seen record import volumes over the past few months.   

Import shipments clearing customs are averaging over 40% higher than the previous year in Houston and Savannah in June. Both have been averaging double digit year-over-year percent increases in import shipments since March, which is traditionally the off-season for maritime shipments. 

There is still a lot of strain on carrier networks and this occurrence suggests there is still potential for significant capacity disruption throughout the U.S. beyond seasonal expectations. 

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.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

To request a SONAR demo, click here.

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.

One Comment

  1. Bring in more parking that the employer or the receiver pays for. Also minimum wage and freight rates and the driver shortage will disappear.

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