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Truckload capacity tightens in August

National tender rejections top Fourth of July values out of season

Photo: Jim Allen - FreightWaves

Chart of the Week: Outbound Tender Reject Index – USA SONAR: OTRI.USA 2023 v 2019

The national Outbound Tender Reject Index (OTRI) topped 4% this month for the first time since early January, when it was recovering from the holiday period. While 4% is still indicative of a very loose market, the timing and direction of the OTRI are signaling that the softest conditions may be in the rearview mirror. 

The recent bump is also the first time the OTRI has moved above the value of 2019, when there was a historically loose market with significant carrier exits. The 2019 values do offer some historical support for increasing rejection rates, but this rise is about two to three weeks earlier than expected. 

The national OTRI measures the rate at which carriers reject loads from shippers under a previously agreed upon or contracted rate. Typically, values below 4.5% are connected to truckload markets with abundant capacity and are deflationary for contract rates. 


Contract rate competition

The race to the bottom may have finally caught up to shippers as carrier margin erosion has now made prioritizing load decisions a little more difficult. In a high-margin contract rate environment, like in 2022, all loads make money and the only concern is coverage. With ORs shrinking and margins falling, carriers now have to also consider which loads are more financially lucrative. 

The OTRI has been below 4% nearly all year, averaging 3.2% from February through July. Subsequently, dry van contract rates have fallen approximately 15% over the past year. The recent rise in OTRI — jumping from 3.3% to 4% — seems to align perfectly with a strong dip in average contract rates in early August. This suggests that carriers are seeing a slight increase in optionality when choosing loads. 

This connection may be somewhat spurious, as there are other factors at play in the market, like an unusually strong increase in long-haul demand this July, but it is certainly a contributing factor as rates fall closer to breakeven levels. 


The domestic freight market experienced nearly a year and a half period of overheating in 2020-2021, creating an economic bubble for the sector. It has taken nearly a year to pull contract rates down to a level that carriers are at least not just auto accepting everything that comes their way. 

While a rise in rejections from 3% to 4% is not that significant, looking at the longer trend line, the recent jump is part of an extended period of increasing rejections starting in May, when another strong dip in contract rates occurred. 

Early replenishment

Many of the nation’s largest retailers import their goods into the port complexes of Los Angeles and Long Beach and stage them there before shipping them across the country. The peak of this activity typically occurs in September through November. It appears to have started early this year. 

Increasing load volumes out of the West may be disrupting carrier networks as they struggle to reposition equipment across long distances. Southern California is home to one of the largest warehousing districts in the U.S., colloquially referred to as the Inland Empire. 

Rejection rates have risen above the national average out of the Los Angeles market this summer after spending the previous year and a half well below the national OTRI. 

Regardless of the reasons, the freight market is showing an elevated level of responsiveness that has been absent for over a year. While this is by no means the end to what feels like a freight drought for transportation providers, it is a sign that the market is turning more in their direction as the traditional peak season approaches. 

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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One Comment

  1. ERIC CHAPMAN

    It’s about time. I’m a one truck operation and consider myself semi retired. I would like to go back to just working during the fall and spring . With rates being so low I’ve needed to work thru the summer. No where near 70 hours a week. Been treading water for since Biden took office. Life is short and spending it all making BS pay is the new battle cry . Would rather sell everything and move deeper off the beaten path .

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.