Holiday Demand Drives Higher Rejections and Rates Before July Fourth

Seasonality Pushes Tender Rejections and Rates Higher Ahead of the Fourth

Truckload carriers gained additional pricing power as freight volumes remained elevated and more drivers prepared to take time off around Independence Day.

The DHL Supply Chain Pricing Power Index increased to 75 for carriers this week, up from 70 the previous week. The three-month outlook remains at 70 for carriers, indicating that current market conditions continue to favor capacity providers.

The index, produced using data from FreightWaves SONAR, measures the negotiating position of shippers and carriers through eight market indicators. A higher carrier score generally reflects a combination of strong freight demand, constrained capacity, rising tender rejections and supportive rate conditions.

Holiday timing lifts rejection rates

The Outbound Tender Reject Index, or OTRI, moved higher after declining steadily from mid-March through mid-May. The national rejection rate rose above 25% in June, with much of the recent increase occurring as the Fourth of July approached.

Holiday-related capacity changes are a regular feature of the truckload market. Some drivers choose to spend time with family or position themselves closer to home, leaving fewer trucks available for certain outbound loads. When carriers cannot accept contracted tenders, shippers and brokers often turn to the spot market to cover the freight.

Dry van rejection rates increased from approximately 23% to 26% over the past two weeks. Reefer rejection rates also moved higher, reaching about 38%. Although reefer rejections remain below the roughly 50% level recorded three months earlier, they are still elevated by historical standards.

For drivers, a higher rejection rate does not mean every load will pay more or that every market will be equally tight. It does indicate that more contracted freight is being offered to the broader market, which can create additional spot opportunities, particularly in areas where outbound demand is strong and trucks are scarce.

Freight volumes remain near peak levels

The Outbound Tender Volume Index stood at 15,980, a level that is higher than nearly any point during the previous 12 months except the week before Thanksgiving and Black Friday in 2020.

Because the index includes both accepted and rejected electronic tenders, the current volume picture becomes clearer when rejection rates are considered. After adjusting for rejected loads, accepted outbound tender volume was just 2.2% below the peak reached in November 2020. The recent increase in total tender volume has been driven primarily by rising rejections rather than a sharp new jump in freight demand.

Imports continue to be a major source of truckload activity. Freight volumes have remained strong around several major ports, including Los Angeles and Long Beach, as well as Oakland, Houston, New Orleans, Miami and Savannah. Congestion along the California coast has continued to affect the movement of containers inland, with ships waiting for berth space and imported goods moving into surrounding distribution markets.

Ontario, California, Savannah, Georgia, and Atlanta were among the markets showing the tightest van capacity conditions in the SONAR capacity trend data. Those areas are closely connected to major import flows and distribution networks, making them important markets for drivers evaluating reloads and outbound options.

Spot rates ease while contract rates rise

Rate trends have been mixed. The national Truckstop.com dry van spot rate, including fuel, fell 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 movement reflects a market in which spot rates have moderated from earlier highs but remain historically elevated, while contract pricing continues to adjust upward. Spot rates often respond to tender rejections after a delay, so changes in rejection activity may not appear immediately in national rate averages.

Van freight is currently providing most of the upward pressure in the truckload market. Reefer volumes have declined substantially from their peak following the February polar vortex and were down another 10.5% from Memorial Day levels. Lower grocery demand was identified as one factor behind the decline, although reefer rejection rates remain high relative to normal conditions.

Demand remains supported by imports and manufacturing

Freight demand continues to receive support from consumer spending, industrial activity and housing-related freight. Consumer card spending was reported at 22% above 2019 levels in the latest comparison, while clothing purchases increased and spending on services continued to improve as more states reopened.

Manufacturing also remained in expansionary territory. New orders, production, imports and employment were growing, although manufacturers continued to report lengthy delivery times, rising backlogs, low inventories and shortages of key materials.

Those conditions are important for drivers because they support freight movement across both consumer and industrial lanes. At the same time, ongoing port congestion and uneven capacity can produce significant differences between markets. A strong national rate average does not guarantee that every outbound lane will offer comparable pricing or consistent reload opportunities.

For now, the data shows a truckload market entering the Fourth of July period with high freight volumes, rising tender rejections and tight capacity in several major freight centers. The immediate pricing advantage remains with carriers, while the three-month outlook continues to point to firm conditions rather than a rapid return to a loosely balanced market.