Van Freight Tightens Up as Capacity Stays Fragile

Tender rejections hit 14%, but demand isn’t the real story. This SONAR update breaks down why van rejection rates are staying elevated, why capacity still looks fragile, and what that means for spot rates heading into quarter-end and October. We dig into national rejection trends, van vs. reefer vs. flatbed, tender volume seasonality, Midwest market pressure and why carriers still have pricing leverage in parts of the network. #TenderRejections #Truckload #FreightMarket

The national Tender Rejection Index climbed to 14% and is holding near a secondary peak that rivals levels seen around Labor Day, with van freight driving the bulk of the pressure, according to Zach Strickland in FreightWaves’ Sonar Update. The development is notable because van moves account for 60% to 70% of all freight tendered in the United States, making even modest rejection-rate increases far more consequential than comparable moves in refrigerated or flatbed.

Strickland was explicit that demand is not the culprit. The National Sonar Tender Volume Index did tick higher coming out of the holiday, but total tender volumes remain below April levels. “This is really just, like I said, more of a sensitivity and a fragility that still exists in the market,” Strickland said.

“We are not in a market that you can sit back and rely on capacity coming into it like we saw towards the end of COVID at the, you know, in 2022, where we had this kind of stabilization.”

By asset class, refrigerated rejection rates are running around 20%, supported in part by the ongoing harvest season — a factor Strickland said he expects to keep reefer rejections elevated for the next few months. Flatbed rejections are sitting near 19%, while van rejections, despite representing the largest share of volume, have seen the most sustained upward pressure in recent weeks. Flatbed accounts for less than 10% of total freight volume, and refrigerated roughly 20%, meaning volatility in those modes carries less systemic weight.

Geographically, the Midwest is at the center of the tightness. Strickland flagged Columbus, Joliet, Allentown, and Elizabeth, New Jersey as key markets to watch, with Joliet — a major rail hub — singled out as a primary driver of rejection-rate stickiness. On van spot rates, the national map is showing predominantly upward movement, with only isolated softening in Atlanta and Greenville, South Carolina.

The timing is adding complexity. The final week of the quarter typically brings a seasonal freight push, but Strickland argued the current van pressure is appearing earlier and more intensely than seasonal patterns would explain. Historically, October has trended softer after quarter-end before demand begins ramping back up in late October.

On spot rates, Strickland noted that diesel is contributing to the upward move but cautioned that fuel costs can only be passed through when the market supports it. “You can’t pass along that diesel cost without a market that will allow it,” he said — and for now, the fragile capacity backdrop appears to be providing that opening, at least in van.

• National tender rejection rates are holding near 14%, with van freight — 60%-70% of U.S. freight volume — seeing the most sustained upward pressure.
• Capacity fragility, not demand growth, is driving rejections; total tender volumes remain below April levels.
• The Midwest corridor, including Joliet and Columbus, is the primary geographic driver of rejection-rate stickiness.

This Summary is generated thanks to a transcription of the interview, for the full interview please enjoy the video above.