Tender Rejections at 13.5%: Tight Market or Fade?

Tender rejections are still sitting around 13.5% — and that’s the key signal for where the truckload market goes next. In this SONAR update, we break down whether post-Labor Day freight is fading or holding, what tender volumes are saying about demand, and why rising diesel still matters. Also in this update: spot rates, import volumes, inventory risk and what the next few days could mean for carriers, brokers and shippers heading into Q4.

The Outbound Tender Rejection Index held at 13.45% as of Sept. 10, remaining significantly above the same period in prior years and signaling a still-tight truckload market even as rates pull back from a Labor Day-driven surge, according to Zach Strickland’s Thursday Sonar market update.

Strickland noted that the Labor Day bump in rejection rates was more pronounced than in any of the previous three years — a detail that carriers and brokers should weigh carefully. The central question now is whether rejections continue falling at a steep pace or stabilize near current levels, which will set the tone for the next month of freight activity.

“It’s still going to be tight, I think, for the rest of the year. That’s not in question. It’s just the rate of change that I think we’re really interested in at this point,” said Strickland.

On the demand side, the Sonar Tender Volume Index — a seven-day moving average of all accepted and rejected tenders — has been softer since mid-July, a trend Strickland attributed partly to modal conversion as shippers shifted long-haul moves to intermodal and rail, with East Coast rail increasingly absorbing that volume. A component of economic softness may also be a factor, though current trough levels still sit above the comparable period last year.

Lean inventory levels add urgency to the demand outlook heading into Q4. Strickland warned that tight inventories entering a period of uncertain holiday demand could force carriers into expedited trucking moves, particularly as intermodal becomes less fungible with trucking later in the year. “This is a huge risk for this index as we move into the 4th quarter,” he said, pointing to the sharp post-Labor Day spike in tender volumes as a sign that shipper urgency has returned.

Spot rates continue to face upward fuel pressure, with the national van rate on the NTI sitting at $3.43 — a figure that includes fuel surcharges. Retail diesel prices are approaching $6 per gallon, a level Strickland flagged as a direct and immediate cost for shippers: fuel surcharge bills are expected to rise again this week and next. The Reefer Tender Index showed continued pressure, while the Flatbed Tender Index was flatlining — consistent with Q4 seasonality that traditionally softens flatbed demand.

Import volumes tracked by the IOTI remain elevated relative to both earlier this year and historical norms for this time of year, supporting the view that inventory levels across the supply chain are still lean. Dry van spot rate maps showed significant geographic dispersion, with many lanes still running in negative territory — a sign, Strickland said, that capacity has not yet fully returned to the market following the holiday period, though he expects that to change in the coming weeks.

• Tender rejection rates held at 13.45% on Sept. 10, with the Labor Day spike larger than any of the prior three years.
• Diesel approaching $6 per gallon is pushing fuel surcharges higher for shippers this week and next, with van spot rates at $3.43 on the NTI including fuel.
• Lean inventories heading into Q4 could force expedited trucking moves as intermodal becomes less substitutable later in the year.

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