Chart of the Week: SONAR Truckload Rejection Index, Nationwide Truckload Index – USA SONAR: STRI.USA, NTI.USA
Nationwide tender rejection charges (STRI) have solely declined barely since peaking in early February, whereas dry van spot charges are rising once more as gasoline costs surge. The takeaway is that the truckload market could also be coming into the early phases of a protracted transitional interval, with further disruption doubtless from seasonal components and new regulatory pressures.
Understanding tender rejections is vital to decoding the truckload market. Whereas spot charges are inclined to correlate with rejection charges over time, they’re closely influenced by sentiment and the transactional (spot) market, which accounts for roughly 15–30% of whole quantity. Like monetary markets, there’s a important quantity of value discovery concerned.
Tender rejections, nonetheless, are usually not topic to cost discovery. They’re easy digital responses indicating whether or not carriers have various makes use of for his or her capability. Not like many 3PLs, which dominate the spot market, carriers prioritize utilization over margin enlargement. When a service rejects a load tender, it usually means both they lack accessible capability within the space or they’ve a extra worthwhile alternative elsewhere—usually each. This makes tender rejections a stronger, extra goal sign, as they replicate operational selections somewhat than market sentiment.
Climate generally is a main disruptor in transportation, and it actually contributed to the elevated rejection charges seen earlier this yr. Nonetheless, these occasions are usually short-lived. It has now been two months since Winter Storm Fern, and each rejection and spot charges have solely declined marginally from their early February peaks.
The SONAR Truckload Rejection Index (STRI) peaked at 14.27% on February 5 and has solely fallen to 13.35% at its lowest level as of March 18. Over the previous two years, winter climate occasions have had a extra muted affect, with a lot faster restoration durations.
Final yr, rejection charges peaked at 7.81% on January 15 following a number of winter storms throughout the southern and central U.S., earlier than returning to pattern by early February. In 2024, a stronger climate occasion pushed rejection charges to simply 5.9% in late January, with a return to pattern by the top of February.
This yr’s STRI sample seems to be very totally different. It extra intently resembles the elevated, extended tightening seen in 2021 in the course of the pandemic—albeit at a decrease stage.
That mentioned, the underlying market dynamics differ considerably. The present surroundings lacks the sturdy demand that outlined 2021, which was closely pushed by import volumes and port exercise. At the moment, transcontinental freight was elevated as a consequence of extreme stock shortages.