Freight Market Rejection Index: Is the ‘Softness’ Misleading? | SONAR Update

The freight market is showing what appears to be softness, but a closer look at the Rejection Index reveals a different story. This week’s SONAR update breaks down why current market conditions are actually robust, not cooling off. Learn how intermodal savings and strategic shifts are painting a picture of strength as we head into peak season. Don’t miss the critical insights on truckload rates and rail’s growing market share.

A 34% cost discount between intermodal contract rates and truckload contract rates is pushing shippers toward rail, according to SONAR data reviewed live on FreightWaves Today. Truckload contract rates have risen 7.5% over the past three months while intermodal contract rates have remained essentially flat, up just 0.6% over the same period — a spread that is fueling volume gains for domestic intermodal operators and the railroads that support them.

“Why would you not take advantage of that?” said Craig Fuller, noting that the 34% discount reflects door-to-door pricing for putting freight on a train versus a truck. Julie Van de Kamp added that the mode conversion opportunity is especially compelling in the eastern half of the U.S., where truckload capacity has been the tightest and where the bulk of the intermodal volume increases are concentrated.

“Unlike past crunches, like if you go back during COVID where you had that massive intermodal crunch because you couldn’t get chassis… the fact that these are on the eastern half means that the railroads and the IMCs can balance their networks so much easier,” Fuller said.

The intermodal strength stands in contrast to a perceived softening in the truckload market. The national tender rejection index currently sits at approximately 13.5% — a level that never appeared at any point during all of 2024, even during last year’s peak season. Van de Kamp emphasized that while 13.5% may feel modest relative to the elevated readings of recent months, it represents a significant premium over where the market stood in prior years. Spot rates at $3.34 per mile are 21% above last year’s levels and still within range of the all-time record Fuller cited at roughly $3.55 per mile set in late 2021.

Fuller characterized the current dip as normal seasonal behavior rather than a structural softening. Tender rejections peaked around the July 4th holiday weekend, as they have consistently across multiple years in SONAR’s historical data, and Fuller said he expects a pickup beginning in the last week of August heading into Labor Day, followed by peak-season tightening in mid-October through early November as retailers push product into brick-and-mortar supply chains ahead of Black Friday.

Volume data adds context: outbound tender volumes have pulled back from a Memorial Day surge but are now consolidating, running above 2024 and 2025 comparison lines and roughly in line with the same period in 2023. A major mall operator Fuller spoke with the morning of the broadcast described consumer activity as “really robust,” which he said supports a constructive outlook for the remainder of the year.

On the product side, FreightWaves’ SONAR platform released a new intermodal API this week covering rates across more than 2,000 intermodal lanes, with broader UI availability described as coming soon. Van de Kamp called the timing ideal given the surge in shipper interest in mode conversion. Fuller flagged JB Hunt — which he described as the largest domestic intermodal operator — along with Hub Group, Schneider, and Knight-Swift as companies positioned to benefit from the current intermodal pricing environment.

• Intermodal contract rates are 34% below truckload contract rates on a door-to-door basis, with truckload contracts up 7.5% in three months versus 0.6% for intermodal.
• The national tender rejection index at ~13.5% exceeds every reading recorded throughout all of 2024, including last year’s peak season, despite seasonal softness since July 4th.
• SONAR launched a new intermodal API this week covering rates on more than 2,000 lanes, as shipper demand for mode conversion data accelerates.

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