The United States truckload market has witnessed a significant shift as the Outbound Tender Reject Index (OTRI) surpassed 10% for the first time since April 2022, driven by the recent Christmas holiday season. This spike in rejection rates suggests dwindling capacity, making it more challenging for shippers.

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The precarious balance in the truckload market has led to spot rates rising nearly 10% higher compared to 2023, excluding fuel costs. The current scenario is far from the post-pandemic highs where OTRI hovered above 20% for nearly 18 months, creating sourcing issues for one in every five loads. This evolving landscape still poses challenges as the market transitions from oversupply to a more volatile and tighter environment.

Shippers have adopted strategic measures to tackle these shifts, such as increasing lead times and favoring intermodal options. Domestic container movement has surged by over 10% year-on-year, alleviating pressure on West Coast trucking capacity. Furthermore, inventory management has become more sophisticated, with distances between warehouses and consumers shrinking. Middle haul loads have dipped by 8% year-on-year, whereas local haul loads are up 6%.

Extreme reductions in demand compared to supply have resulted in approximately 41,000 fewer carriers since July 2022. While the evolving strategies have buffered the adverse effects of market transitions, supply chain managers are expected to face continuing challenges as economic uncertainties persist into 2025.

Source: IndexBox Market Intelligence Platform