Truckload Capacity Tightens in August—Tender Rejections Increase

FreightWaves reported on Sunday (8-27-23) that its national Outbound Tender Reject Index (OTRI) topped 4% in August for the first time since early January, when the trucking market was recovering from the holiday period. The OTRI is an anonymized measurement of mid-sized to large truckload carriers’ willingness to accept the load that are offered (“tendered”) to them by shippers.

While 4% is still an indication of a very loose market, the timing and direction of the OTRI is signaling that the softest conditions may be in the rearview mirror, FreightWaves said. Typically, values below 4.5% are connected to truckload markets with abundant capacity and are deflationary for contract rates.

FreightWaves concludes that the race to the bottom may have finally caught up to shippers, as carrier margin erosion has now made prioritizing load decisions a little more difficult. In a high-margin contract rate environment, like in 2022, all loads made money and the only concern was coverage. With ORs shrinking and margins falling, carriers now have to also consider which loads are more financially lucrative.