Fourth of July Season Drives Higher Rejection Rates
Seasonality pushing rejections and rates higher ahead of the Fourth
Freight market conditions are shifting in carriers’ favor as Independence Day approaches, with more drivers taking time off and shippers facing tighter capacity in several major markets.
The DHL Supply Chain Pricing Power Index rose to 75 for carriers this week, up from 70 last week. The three-month outlook remains at 70 for carriers. The index, built with data from FreightWaves SONAR, measures the balance of negotiating power between shippers and carriers based on freight volumes, tender rejections, rates and economic conditions.
For drivers, the most immediate change is the rise in tender rejections. The national Outbound Tender Reject Index moved above 25% for the first time in June after declining steadily from mid-March through mid-May. Van rejection rates increased from roughly 23% to about 26% over the past two weeks.
A rejection occurs when a carrier declines an electronic load tender. Higher rejection rates generally indicate that available trucks are becoming harder for shippers and brokers to secure. Around a national holiday, rejections also tend to rise as drivers turn down freight that would keep them away from home or create scheduling problems.
That seasonal pattern is now developing ahead of the Fourth of July. The increase in the national tender volume index is being driven primarily by more rejected loads rather than by a sharp increase in underlying freight demand. Even so, the result is a tighter spot market for the freight that carriers do accept.
Accepted freight volume remains near peak-season levels
The national Outbound Tender Volume Index stood at 15,980, a level higher than almost any point during the previous 12 months except the week before Thanksgiving and Black Friday last year.
Because the index includes both accepted and rejected electronic tenders, adjusting for the rejection rate provides a clearer picture of freight moving through the system. On that basis, accepted outbound tender volume is only 2.2% below the peak reached in November 2020.
That comparison does not mean the market is identical to the early pandemic freight surge. It does show that the amount of freight being accepted by carriers remains unusually high. Strong volumes, combined with limited available capacity, are giving carriers more leverage when negotiating rates and selecting loads.
Import activity continues to be a major source of freight. Ports on the West Coast are handling heavy container flows, while Houston, New Orleans, Miami and Savannah also are reporting strong throughput. Ontario, California, Savannah, Georgia, and Atlanta posted carrier capacity trend scores of 100 in SONAR, reflecting especially favorable conditions for carriers in those markets.
Dry van freight is leading the market
Dry van volumes have increased since the second half of May and are driving much of the current pressure on capacity. Reefer volumes, by contrast, have fallen significantly from their winter highs.
The Reefer Outbound Tender Volume Index has declined 25% from its all-time high in the weeks following the February polar vortex. Since Memorial Day, it has dropped another 10.5%. Reefer rejection rates remain historically high at about 38%, but they are well below the roughly 50% level seen three months earlier.
The difference between equipment types matters to drivers. Van freight is producing the clearest improvement in load availability and pricing power, while reefer carriers are still operating in a tight market but have seen demand moderate from earlier peaks.
Contract rates rise as spot rates ease
Rate data shows a mixed but generally supportive environment for carriers. The national Truckstop.com dry van spot rate, including fuel, declined from $3.21 per mile at the beginning of June to $3.11 per mile. At the same time, FreightWaves’ dry van contract rate increased from $2.50 to $2.59 per mile, excluding fuel.
The lower spot rate does not necessarily signal a broad loosening of the market. Spot prices have moderated from the post-winter surge, but freight demand remains strong and capacity remains constrained. Contract rates moving higher suggest shippers are still paying more to secure dependable coverage.
Routing guides had generally improved through the second quarter before the recent seasonal increase in rejections. The current pattern could lead to a closer relationship between spot and contract rates, with holiday-related capacity reductions adding pressure to short-term pricing.
What drivers should watch
The market’s near-term direction will depend on how long elevated volumes persist and how many drivers remain available around the holiday. The index’s three-month outlook of 70 for carriers indicates that the current balance is expected to remain favorable, although conditions can vary significantly by lane, equipment type and freight origin.
Import-heavy markets may continue to offer strong freight opportunities, but congestion around major ports can also create delays, difficult appointment schedules and longer dwell times. Drivers should account for those operating conditions when evaluating rates and transit times.
Overall, the data points to a market in which seasonal driver availability is tightening an already busy freight network. Rejections are rising, dry van contract rates are moving higher and accepted freight volumes remain close to historic peak-season levels. For professional drivers, the strongest opportunities are likely to be found by comparing individual lanes carefully rather than relying solely on national averages.
