Reefer Truckload Rejections Soar: 1 in 5 Loads Rejected Nationally

Freight rejections are on the rise, with 1 in 5 reefer loads being turned down nationally as of October 20, according to data from FreightWaves SONAR. This percentage has stayed within a 21% range since peaking at 22.13% in early September and dipping to 20.89% on September 24, indicating persistent tight capacity in the temperature-controlled segment despite softer demand overall.

The truckload market as a whole has remained resilient, with the SONAR Truckload Rejection Index (STRI) hovering between 13% and 14% since August, currently at 13.9% as of October 20. The SONAR Truckload Volume Index (STVI) has dropped about 2% week-over-week to around 11,000, signaling muted demand that has not yet resulted in improved rates for shippers.

The elevated reefer rejection numbers are primarily concentrated in the Pacific Northwest and Midwestern regions, where refrigerated volumes have increased. This can be attributed to the fall harvest of commodities like apples, potatoes, and onions in the Pacific Northwest, as well as poultry and other protein products being shipped from South Dakota, Iowa, and surrounding states in anticipation of Thanksgiving demand.

Julie Van de Kamp, a market analyst, explained that this tight capacity is largely driven by the harvest season. She noted that refrigerated freight is particularly sensitive to diesel costs, as reefer units must run continuously, regardless of whether the trailer is carrying goods or idle. This economic pressure on the reefer segment is expected to continue into winter, as reefer equipment is utilized for both temperature control during warm months and freeze protection during colder months.

Van de Kamp anticipates that refrigerated rates will rise even more than van rates in the coming months. However, a potential upside for shippers has been observed in Southern California, where tender rejections remain below the national average but are tightening. This trend often precedes peak-season freight activity. In summary, despite a slight dip in freight volumes, carriers have maintained their capacity to be selective about accepting loads, keeping rejection rates firm across modes.

As of October 20, 21.44% of reefer loads were rejected nationally, near the year-to-date high of 22.13% reached on September 17. Refrigerated spot rates have surged by 28% year-to-date, while contract rates have increased by 9%, with diesel costs adding further pressure to the temperature-controlled sector. Tighter conditions are attributed to fall harvest volumes in the Pacific Northwest and protein shipments in the Midwest, with winter freeze-protection demands expected to sustain the pressure.