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Truckers work through Labor Day as market continues to soften

Carriers absorb holiday demand spike under contract rates

Photo: Jim Allen - FreightWaves

Chart of the Week: Outbound Tender Rejection Index, Contract Load Accepted Volume – USA SONAR: OTRI.USA, CLAV.USA

Truckload volumes for contract freight jumped 3% in the week leading up to Labor Day while load rejections remained near annual lows below 6%. As a consequence, truckload spot market rates barely moved, increasing a marginal 2.3% in the week leading up to the holiday. Rates increased over 6% in 2021 off a much higher base value. This is the latest signal that the trucking market continues to soften, but it also has implications for the upcoming peak season. 

The Contract Load Accepted Volume Index (CLAV) measures accepted truckload tenders from shipper to carrier. The CLAV represents loads that move under previously determined rate agreements or contracted loads — not the spot market. 

The increase in CLAV, without a strong increase in tender rejections, indicates that carriers were more willing and able to cover their customer requests than they typically have been around a holiday period. 

Over the past two years, the Labor Day holiday has signaled the beginning of an extended period of elevated activity in the truckload market — basically an extended peak season. Volumes and spot rates hit their highest levels of the year from September through December. 

Before COVID-19, there was typically a seasonal bump in activity around the holiday before the market settled through much of the fall before increasing leading into Thanksgiving. This week’s chart illustrates we are still far removed from pre-pandemic seasonality, especially when looking at load rejection rates. 


Looking back to 2019 — a relatively soft but seasonal year — spot rates increased around the five main national holidays according to the National Truckload Index (NTI). The main driver of increasing spot rates in a soft year is capacity being less available as drivers take vacations and home time around the holidays. While there are spikes in demand, it is not always beyond the threshold that carriers could handle with full employment. 

This year is a transitional one, marked by a rapidly changing economic environment. While consumer demand has been waning since early 2021, supply chain problems prompted companies to order more than they needed into early 2022 — leading to overflowing docks and warehouses.     

The oversupply of goods erased the sense of urgency that characterized the pandemic era and now most of the truckload market is not driven by consumption but inventory management. 

The glimmer of hope for carriers lies in the CLAV, which has not fallen as rapidly as the Outbound Tender Volume Index (OTVI), which measures the total of both accepted and rejected tenders. The CLAV has only declined roughly 6% since early March, while the OTVI is down a whopping 19%. 

Most of the volume has eroded from the spot market, which has largely been an overflow valve for capacity since July 2020. The CLAV only being down slightly is a sign that demand is not terribly far below the tipping point for where rates could see upward pressure once again. 

If shippers make aggressive moves by discounting goods toward the end of the year in an attempt to overcome the economic headwinds, there could be a peak season boom. A looming railroad strike could also have a strong impact. 

Even if this does occur in this best-case scenario for carriers, it will more than likely be short-lived without help from some other stimulating event. This is something Federal Reserve Chair Jerome Powell has made clear will not originate with him. 

At the very least, carriers should prepare for a very mild peak season and work on retaining as much of their contract rate increases they acquired over the past two years. 

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 datasets each week and enhancing the client experience.

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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 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.