Chart of the Week: Outbound Tender Reject Index, Nationwide Truckload Index (linehaul solely) – USA SONAR: OTRI.USA, NTIL.USA
The truckload market stays poised for a breakout, however the timeline seems to be extending. Analyzing the development line of tender rejections (OTRI) and spot charges excluding gas (NTIL) over the previous two years reveals a transparent upward trajectory with rising volatility. Nevertheless, this development flattened within the first 5 months of the yr, as financial uncertainty continues to dampen demand.
The trucking sector is enduring one among its longest and most difficult financial stretches since deregulation. Truckload demand is presently down roughly 30% from its COVID-era peaks. Whereas these peak ranges had been by no means sustainable, they lasted lengthy sufficient to inflate capability far past what the market required.
From June 2020 to October 2022, the variety of energetic truckload working authorities grew by roughly 48%. Since then, they’ve declined by solely about 12%. Federal Motor Service Security Administration information is gradual to mirror these modifications, as it could take as much as two years to clear inactive authorities except operators self-report their exit. Service Particulars helps refine this timeline to round a yr, however it nonetheless lags. Importantly, one authority can signify a single truck or a fleet of a thousand, so this metric isn’t evenly distributed.
Tender rejections function a dependable proxy for market stability. Carriers are unlikely to reject freight in comfortable markets except they’ve alternate options, so rising rejection charges point out tightening capability and strained networks.
Capability has been in correction mode for years and appeared near reaching equilibrium late final yr. Over the vacations, the OTRI exceeded 10% for the primary time since 2021. This occurred whilst shippers more and more turned to intermodal for longer hauls, making the most of early stock pull-forwards that gave them extra flexibility in transport.
The continuing commerce battle has additional fueled the stock pull-forward phenomenon. After briefly cooling in late April and early Could, tariff exercise resumed, sending blended indicators and triggering repeated shifts in transport habits.
Import bookings information exhibits a surge in container volumes certain for the U.S. final summer season, adopted by erratic swings. Container imports is usually a helpful demand proxy, however they usually give false indicators in periods of uncertainty — one thing that has plagued shippers since COVID.
Import demand stays comparatively excessive, however a lot of the freight is precautionary. With commerce coverage and shopper spending nonetheless in query, a good portion of freight is sitting idle in warehouses relatively than shifting on vans.
