Tender rejection rates are remaining stable, despite the challenging demand environment
This week’s SONAR Supply Chain Pricing Power Index: 35 (Shippers)
Last week’s SONAR Supply Chain Pricing Power Index: 35 (Shippers)
3-month SONAR Supply Chain Pricing Power Index Outlook: 40 (Shippers)
The SONAR Supply Chain Pricing Power Index uses the analytics and data in SONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers.
This week’s Pricing Power Index is based on the following indicators:
Tender volumes fall to lowest nonholiday level in two years
The freight market is challenged from a demand perspective through February. The reason for the declines can be attributed to a few smaller impacts happening all at one time. First, just typical seasonality is showing up with tender volumes sliding in February, but the second might be the larger impact. In January, inventory levels, according to the Logistics Managers’ Index, grew faster than expected, likely due to uncertainty around trade policy. Higher inventory levels in January are likely muting activity in February.
SONAR: Outbound Tender Volume Index — Seasonality View: 2025 (white), 2024 (green) and 2023 (pink)
The Outbound Tender Volume Index (OTVI), a measure of national freight demand that tracks shippers’ requests for trucking capacity, continued to fall this week. Over the past week, the OTVI fell by 4.08% as the freight market continues to face fairly significant seasonal pressures. Compared with this time last year, tender volumes are down 8.1%.
As the direction of trade policy remains uncertain, it will likely lead to changing inventory strategies. The challenge for shippers to balance is: Are increased inventory costs and higher warehouse costs less impactful to the bottom line than any potential tariffs?
SONAR: Contract Load Accepted Volume — Seasonality View: 2025 (white), 2024 (green) and 2023 (pink)
Contract Load Accepted Volume (CLAV) is an index that measures accepted load volumes moving under contracted agreements. It is similar to OTVI but without the rejected tenders. Looking at accepted tender volumes, the decline was similar to the decline in OTVI, falling by 3.96% over the past week and down 9.08% y/y, though the y/y number is skewed lower due to higher rejection rates.
Bank of America’s most recent card spending report, for the week ending Feb. 15, shows there is modest growth year over year in spending. Total card spending was up 0.5% y/y during the week, but excluding autos it was down 1.1% y/y. Home improvement spending was the largest drag on overall spending, falling by 7.3% y/y.
SONAR: Outbound Tender Volume Index — Weekly Change
A sluggish start to February from a volume perspective was felt across the vast majority of the country the past week. Of the 135 markets tracked within SONAR, 45 reported higher volumes over the past week, up from 36 last week.
All of the volume increases over the past week stemmed from fairly small freight markets overall. The Lakeland, Florida; Joliet, Illinois; and Columbus, Ohio, markets were the only three of the top 15 markets by outbound volume that saw volumes grow over the past week. The Lakeland market saw volumes increase by 8.57% w/w, while the increases in Joliet and Columbus were less impressive: 1.02% and 0.6% w/w, respectively.
SONAR: Van Outbound Tender Volume Index (white, right axis) and Reefer Outbound Tender Volume Index (green, left axis).
By mode: The dry van market outperformed the reefer market this week, but dry van volumes were still lower on a weekly basis. The Van Outbound Tender Volume Index fell by 3.08% over the past week and is down 9.53% y/y.
After outperforming for much of the back half of 2024 and early 2025, the reefer market is suffering significant declines in tender volumes. The Reefer Outbound Tender Volume Index fell by 7.21% over the past week and is now down 8.52% y/y.
Tender rejection rates remain quite stable in challenging demand environment
While tender volumes have declined, tender rejection rates have been fairly stable, which should be a welcome sight for carriers. Tender rejection rates have fallen from their peak, but declines in February aren’t atypical. What is atypical is that when tender volumes have as dramatic a drop as they have, tender rejection rates follow suit. The stability in tender rejection rates shows that significant capacity has bled from the market.
SONAR: Outbound Tender Reject Index — Seasonality View: 2025 (white), 2024 (green) and 2023 (pink).
Over the past week, the Outbound Tender Reject Index (OTRI) fell by 12 basis points to 5.69%, a sign that the capacity side of the market is actually fairly stable, especially compared to the demand side, which experienced a sizable drop. The OTRI is still 105 bps higher than it was this time last year, which is to be expected as capacity has been bleeding out of the market for the better part of two years.
SONAR: Outbound Tender Reject Index – Weekly Change.
The map above shows the Outbound Tender Reject Index — Weekly Change for the 135 markets across the country. Markets shaded in blue are those where tender rejection rates have increased over the past week, whereas those in red and white have seen rejection rates decline. The bolder the color, the more significant the change.
Of the 135 freight markets, 66 witnessed higher rejection rates over the past week, with the vast majority stemming from the Eastern half of the country.
The Florida markets, which are predominantly backhaul markets, saw rejection rates rise fairly rapidly over the past week. The Lakeland market, which is the largest of the four Florida markets by outbound volume, saw tender rejection rates increase by 233 basis points over the past week. Tender rejection rates in the largest market in the country, Ontario, California, were fairly stable over the past week, rising just 8 bps, but the overall rejection rate in the market is still well below the national average at just 2.49%.
SONAR: Van Outbound Tender Reject Index (white), Reefer Outbound Tender Reject Index (orange) and Flatbed Outbound Tender Reject Index (green).
By mode: Dry van tender rejection rates actually moved higher over the past week, which is a welcome sight for the largest equipment type in the market. The Van Outbound Tender Reject Index increased by 10 bps over the past week to 5.38%, up 77 bps y/y.
The reefer market is behaving in a more rational way when factoring in the drop in reefer tender volumes. The Reefer Outbound Tender Reject Index has fallen by 128 bps over the past week to 12.11%. Even with the decline this week, reefer tender rejection rates are 608 bps higher than they were this time last year.
Flatbed tender rejection rates have fallen back below double digits. A decline in flatbed rejection rates at the end of February isn’t abnormal; falling below 10% shows there is still some slack in the flatbed market. The Flatbed Outbound Tender Reject Index has fallen by 267 bps over the past week to 9.05% and is down 159 bps y/y.
Spot rates stabilizing after sizable drop
The truckload market is seeing spot rates start to stabilize after the seasonal decline throughout the first seven weeks of the year. At the same time, contract rates have returned to the range where they spent most of 2024, indicating that there hasn’t been significant upward movement in contract pricing for new bids coming online in the first two months of the year.
SONAR: SONAR National Truckload Index (white, right axis) and Initially Reported Van Contract Rate (green, left axis).
The National Truckload Index (NTI) – which includes fuel surcharges and various accessorials – fell by 6 cents per mile over the past week to $2.29. Compared to this time last year, the NTI is up 3 cents per mile, again another positive for carriers moving into a period when activity should increase. The linehaul variant of the NTI (NTIL) – which excludes fuel surcharges and other accessorials – matched the NTI’s decline, falling by 6 cents per mile to $1.72. The NTIL is still 9 cents per mile higher than it was this time last year, continuing to highlight the deflationary impacts fuel prices have had on all-in spot rates.
Initially reported dry van contract rates, which exclude fuel, fell slightly over the past week – down 7 cents per mile to $2.31, right in the range where contract rates have been for much of the past year. At the moment, the initially reported dry van contract rate is 2 cents per mile, or 0.9%, higher than it was the same time last year.
SONAR: Spot (linehaul) to contract rate spread
The chart above, showing the spread between the NTIL and dry van contract rates, is trending back to pre-pandemic levels. Over the past week, the spread was unchanged at minus-55 cents. The spread is actually 1 cent per mile wider than it was this time last year, though the overarching trend is for continued narrowing.
The SONAR Trusted Rate Assessment Consortium (TRAC) spot rate from Los Angeles to Dallas is recovering after the sharp drop at the beginning of the month. Over the past week, the spot rate along this lane has increased by 12 cents per mile to $2.28. The spread between contract and spot rates remains fairly wide compared to where it has been for much of the year.
From Chicago to Atlanta, spot rate volatility has been the theme of 2025 so far, and this week is no different as spot rates fell but closed out the week on a positive note with a slight recovery. Over the past week, the TRAC spot rate from Chicago to Atlanta fell by 8 cents per mile to $2.55, but it has increased by 18 cents per mile since Feb. 18.
