Chart of the Week: Outbound Average Length of Haul – USA SONAR: OALOHA.USA
The average length of haul for a truckload has plummeted in recent months, averaging nearly 8% shorter year over year to start 2025. This is a dramatic shift from what was happening this summer, when the load lengths were averaging 7% longer than the previous year. This may not seem like much to the outside observer, but the implications are quite dramatic from a supply chain management and carrier perspective.
The data suggests the shrinking load lengths are being driven by simultaneous growth in demand for loads moving less than 100 miles and shrinking demand for loads moving more than 450 miles.
In the chart above, COTVI (green) represents local truckload tenders that move less than a fourth of a day’s drive. Its annual growth rate averaged around 20% throughout 2024. The COTVI growth rate outperformed all other load lengths. Total tender volume growth averaged around 7% for the entire year.
E-commerce drives short-haul growth
The growth in shorter-haul truckloads is possibly deriving from companies’ efforts to reduce the length of haul between distribution center and consumer. The growth in e-commerce is the driving force behind this initiative. Consumers who opt for online ordering need delivery times that are as close as possible to the same-day delivery they can get by going to a store.
This does not explain the entirety of the shrinking load lengths, however. That freight still has to move into the fulfillment centers from long distances. In other words, a series of short moves is not replacing one longer one.
Long-haul truckload volumes (LOTVI) were down 13% y/y last week, which suggests this is something beyond seasonality.
Intermodal takes share
Intermodal rail demand was up 6% versus this time last year, a trend that has been consistent the past seven months. Starting in July, shippers began utilizing intermodal more frequently for shipments coming off the West Coast, possibly resulting from the deterioration in service they received from the truckload providers.
Tender rejection rates, the percentage of load coverage requests turned down by carriers, for loads moving out of the Ontario, California, market jumped from an extremely low 3% in early May to over 8% in June and then topped 9% around the Fourth of July.
This decline in carrier compliance coincided with the subsequent growth in loaded intermodal containers (ORAILL.LAX) being moved on the rails out of Los Angeles.
Pull forward reduces urgency for domestic shipping
Ongoing conflicts and geopolitical tensions are pushing shippers to bring in inventory faster than they normally would. This puts less pressure on domestic shipping as many goods are already in the country when they are needed for replenishment.
Intermodal shipping is significantly cheaper than truckload, averaging 7%-10% less, but the multiple touch points and the fact that most shipments have to transition to a truck make service less consistent. The extra time buffer created by earlier import ordering allows for a higher margin of error in transit times, making intermodal a more viable option.
Intermodal is not nearly as competitive on the short-haul market, which means carriers should continue to expect strong growth in this sector. There is also growing pressure on intermodal to continue to perform. If the sense of urgency returns to domestic shipping, this current structure is vulnerable to an infrastructure that has historically not been able to adapt quickly.
The truckload market continues to see capacity leave at record levels and may not be able to respond as quickly if called upon. Just one more risk transportation managers have to consider in 2025.
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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