Rejection rates surge in U.S. truck market

The U.S. truckload market has seen a significant shift, driven by the recent Christmas holiday, with the Outbound Tender Rejection Index (OTRI) exceeding 10% for the first time since April 2022. The surge in rejection rates indicates that capacity is declining, making it more challenging for shippers.

Also Read: Truck Spot Rates Surge During Peak Season

The precarious balance in the truckload market has resulted in spot rates rising nearly 10% from 2023 levels (excluding fuel costs). The current situation is a far cry from its post-pandemic highs, when OTRI had been hovering above 20% for nearly 18 months, resulting in procurement issues for 1 in 5 loads. This changing landscape still poses challenges as the market moves from oversupply to a more volatile and tense environment.

Shippers have taken strategic steps to address these shifts, such as extending delivery times and supporting intermodal options. Domestic container throughput surged more than 10% year over year, easing pressure on West Coast trucking capacity. In addition, inventory management has become more complex, and the distance between warehouses and consumers continues to shrink. Medium-haul transport loads fell 8% year-on-year, while local transport loads increased 6%.

Since July 2022, demand has decreased significantly compared to supply, resulting in approximately 41,000 fewer carriers. While evolving strategies have cushioned the adverse effects of the market transition, supply chain managers are expected to face ongoing challenges as economic uncertainty continues into 2025.

Source: IndexBox Market Intelligence Platform