Peak Season Is Coming – But Where Is The Freight Surge?

Peak season has arrived, yet preliminary data suggests a restraint in the freight surge typically seen in the weeks leading up to Labor Day. SONAR analysis indicates tender rejection rates have remained steady at around 13.5%, a departure from previous patterns where rates began to climb earlier in August. Experts suggest this could signal a supply-driven market rather than a freight shortage.

FreightWaves SONAR data shows that tender rejections have stalled near 13.5% heading into Labor Day weekend, a stark contrast to previous years when rates started to rise earlier in the summer. Julie Van de Kamp initially expected rejection rates to reach the 18% range before the holiday, but now believes a 15% figure is more probable.

Craig Fuller, while not a forecaster, anticipates rates staying in the 15% range. The demand for long-haul freight seems steady, with spot rates down roughly 2.5% month over month to $3.29 per mile, yet still up 44% compared to a year ago. Contract rates have also climbed 17% year over year, narrowing the spread between contract and spot rates as shippers adjust their routing strategies.

The key factor driving this orderly market behavior is rail; railroads are absorbing a significant share of long-haul freight, preventing a surge in truckload volumes. Both hosts point to rail as a structural factor suppressing the usual seasonal spike, with Fuller noting that demand hasn't increased, the market is supply-driven.

Van de Kamp adds that the weekly AAR rail freight data, published every Wednesday, remains robust, explaining why trucking hasn't experienced the demand-driven tightening seen in earlier cycles.