Disclaimer: I don't know diddly about trucking, but I thought this was interesting.
Link The thesis is that the number of loads rejected by the trucking industry is declining rapidly (Outbound Tender Reject Index), which has implications for the broad economy.

"Last week, I published an article entitled "Just 3 years after 2019’s trucking bloodbath, another is on the way."

For anyone who lived through the trucking debacle of 2019 – when carrier after carrier suddenly shut their doors – the thought of experiencing that again is truly frightening. After all, we lost some very large carriers during that period , including Celadon, Falcon and NEMF, just to name a few. In addition, we lost thousands of small and mid-sized trucking companies. In addition, major 3PLs conducted aggressive reductions in force."

The remainder of the article seems to be a come-on for the author's service, with numerous instances where he called trucking tops and bottoms. I found the following interesting:

"But I have confidence in our analysis. I wish the answers were different. I would prefer to say the U.S. trucking market was robust and the expansion will continue throughout 2022. But I can’t. Since I wrote the piece about the bloodbath, FreightWaves SONAR’s tender data continues to reinforce the perspective of a declining freight market.  

Tender rejections are the best indicator into real-time supply/demand in the truckload sector. The data comes from actual electronic load requests – “tenders” in the truckload contract market.

A high rejection rate means that trucking companies have more options to choose from. A low rejection rate means carriers have fewer options in freight to pick from. Since this measures actual load activity and not load board posts or searches, it tells us what the market is actually doing.

And since it measures the willingness of carriers that are contracted to accept or to reject a load they have a contracted rate for, if the rejection rate declines, it suggests capacity is loosening.

At the start of March, the rejection rate was 18.7% – today it sits at 13.90%. Even though it has only been a week since I wrote the “bloodbath” article, the rejection rate has fallen another 1.3%. The last week of March is normally one of the best weeks of the year for carriers, but this year it has been one of the worst.

Just wait for April…



Comments from industry executives I have received in the last week include:

Large industry supplier (sent on the day my article was published):
“In an internal memo that I sent to the team last week about weakening demand and what that means for the industry, my closing line was ‘The Elmer Fudd steroid-induced demand juicer is over.'”

Top ten 3pL/truck brokerage (Last Friday, March 25th):
“Heard from an investment banker that they have fielded a lot of inbound questions from your article. It’s happening. I called it 3-4 weeks ago internally. Our linehaul purchasing rate is down almost 20% in 3 weeks. Rates are not down so much due to fuel offset.”

Other top ten 3PL/truck brokerage (today):
“I’ve been following your increasingly apocalyptic takes on the freight market on Twitter and agree. I don’t think most are ready for the pain that could be coming.”

Large enterprise fleet – 1000+ trucks (Monday, March 28th) :
“We were turning down 4 loads for every truck a year ago. Today, we are barely keeping our trucks running. In some markets, things are so bad that we have resorted to signing up for a load board account to keep them moving.”

Large enterprise fleet – 4000+ trucks (Wednesday, March 30th):
“The only market this reminds me of is right after September 11th. Consumer spending completely dried up, but the industrial economy had just come out of a recession. But it was rough for a few quarters.” "

Seems like something's up.

Demand destruction due to inflation. Many are CHOOSING not to purchase things at what they perceive to be incredibly high prices.

I, along with my dad, own a 45 truck OTR fleet which was founded by my grandpa in 1988. We’ve seen it all. 2019 was bad. Real bad. Right now rates are at an all time high, but since the recent spike in fuel they have been sort of offsetted. Even then, times are good at the moment. However our biggest fear is rates will fall but fuel will remain high. That will be a bad situation. Adding to that is the fear that inflation will remain static while rates fall. Because equipment costs, parts, etc are up right now too. If inflation remains and fuel prices remain while rates fall, the industry is fucked.

Since you won't run your trucks at a loss, I imagine the % of refused loads would start going up as the bill rates fell?

I mean… in my world of tankers you can stay busy forever right now.


Dry freight and steel are super rough, because costs have gone up so much.  And you just can’t find things to carry because inventory shortages everywhere.

It’s fucking weird right now. But the truck shortages through at least 2024-2025 is going to be real.

Yes. It will be more difficult for manufacturers and wholesalers to have loads accepted. They will increase their transportation costs and continue to raise prices to cover transportation. In the end demand will be pressured by high prices.

ETA: It’s already a shit show. What cost me $700 to move last year now costs $1,300.

Pretty much. We have about 8 shippers we directly haul outbounds for. Our drivers make deliveries and we get them a backhaul coming right back home, then they take the next outbound. So we aren’t zigzagging our trucks all over the country on brokered loads. We are there and back, repeat.

So if rates collapsed we’d refuse load tenders of our lowest paying customers and focus on the higher paying ones. For example, hauling brick doesn’t pay near as much as hauling auto parts- both of which we haul. We know what our break even rate per mile is so when the industry gets hit we stay as far above as that breakeven rate we can and just survive until the next boom. It’s a vicious cycle. Stressful at times.

Trucking is a double edged sword. You can makes lots of money during the booms but once trucking gets lucrative then every Mohammed and his cousins jump in the game which causes capacity to loosen and demand for trucks to drop, therefore rates fall. Rinse and repeat.

I read that the FMCSA is issuing 10K new authorities per month right now. So it’s only a matter of time before capacity loosens.

I will say, I don’t think the industry is going to do well between the truck / trailer shortage, cost of fuel increasing so much, the driver shortage, the huge pay increases needed to retain drivers and the general cost of doing business increases.

I think all that is going to degrade demand to some level.  

I also believe the “micro” side of things, of so many “new” drivers getting their own authority, will hurt to a point in the van and flat markets. But they’ll only go bankrupt themselves, however that is also a revolving door.

Being in a niche market like I am… with how logistics are currently, I don’t see myself slowing down for months, if not years.

I own a tanker trucking company as part of a vertical integration strategy for my main business.  They probably haul 30% for the core business and the rest is whatever they can get.  It's crazy how much they have been able to raise rates over the last two years.  We bought it in 2019 and it went from a dog to a big winner just on the macro trends overnight basically.  

Truck/trailer/driver shortages will only keep rates up in the near term.  There is a lot of bulk chemical in this country that must roll down the road no matter what. The big chemical companies have no choice but to eat the increased freight and pass the costs along these days, they are used to it by now.