Labor Day Freight Crunch: Tender Rejections Surge 14%

Tender Rejections Jump Above 14% as Labor Day Tightens Freight Market

The national Tender Rejection Index has climbed back above 14% for the first time since early August, signaling that the freight market is tightening as Labor Day demand begins to build.

According to FreightWaves SONAR data reviewed Thursday, the increase is occurring faster than the rise recorded during the same holiday period in each of the past three years. For truck drivers and carriers, the move suggests that even a modest increase in freight demand can place renewed pressure on available capacity.

A tender rejection occurs when a carrier declines a load offered under a shipper’s contracted agreement. Higher rejection rates generally indicate that carriers have more opportunities elsewhere, that available trucks are becoming harder to find, or that spot-market rates are becoming more attractive than contract freight.

The index had remained near 13.5% during a period of relative stability. Zach Strickland, an analyst with FreightWaves, cautioned that the plateau should not be interpreted as evidence that the freight cycle is turning or that capacity has begun returning to the market in a meaningful way.

“Stabilizing at a high level does not mean that this cycle is over,” Strickland said. “I certainly don’t think that the carriers out there and the brokers out there need to say, okay, we’re transitioning out of this.”

The current market remains shaped largely by supply. Capacity has not meaningfully expanded after roughly six to seven months in which the pace of contraction slowed. In practical terms, fewer trucks may be leaving the market as quickly as before, but a substantial wave of new capacity has not arrived to absorb increases in freight.

That leaves the market sensitive to relatively small changes in demand. Strickland said some of the softer freight activity seen during July and August reflected modal conversion rather than a fundamental decline in overall freight volumes. Freight that might otherwise have moved by truck may have shifted between modes, masking the underlying level of demand.

“The fact that we are not seeing demand growth on this level, and yet rejection rates are jumping up higher, should tell you all you need to know about this supply-led cycle,” Strickland said. He described the market as highly vulnerable to disruption from any increase in demand.

For drivers, that sensitivity can show up in changing lane conditions, tighter appointment availability and larger differences between contract and spot opportunities. The effect is not uniform across equipment types, however.

Dry van freight is showing the greatest volatility. Van spot rates have been moving sharply in both directions, with swings Strickland compared with conditions seen during the COVID-era freight market. He expects that volatility to remain a defining feature of the van market through the end of the year.

Flatbed rates remain elevated, supported in part by construction tied to data centers, although the broader flatbed trend is moving lower. Strickland described that market as potentially overheated, indicating that strong rates have not necessarily translated into a uniformly rising trend.

Refrigerated rates, meanwhile, have held relatively steady. Seasonal produce demand is supporting reefer freight, while the lack of the same intermodal competition affecting dry van has helped keep reefer conditions firmer.

Tender volumes dipped as the holiday approached, following a typical pre-holiday pattern in which shippers move orders forward before employees leave for vacation. Strickland expects freight volumes to rise more sharply after Labor Day when shippers and receivers return to normal operations.

Hurricane activity, which can disrupt freight flows during this period of the year, does not appear to be a major factor at present. The current weather pattern has limited Atlantic storm activity so far, according to the information reviewed by FreightWaves.

The latest rejection data does not necessarily signal a broad-based surge in freight. Instead, it shows how little spare capacity is available when demand begins to increase. A market that has stabilized at elevated rejection levels can still produce abrupt changes in rates and load availability when shippers add freight or when a disruption removes trucks from a major lane.

For professional drivers, the broader message is that the market remains tight but uneven. Dry van operators should expect the greatest rate movement, while reefer and flatbed conditions are being shaped by seasonal demand and specific industry activity. Across all three equipment types, incremental changes in freight demand may continue to produce outsized shifts in available loads and pricing.