Despite noisy holiday volume data, by most measures trucking markets are continuing their recovery. Week-over-week comparisons look dramatic and make that progress look faster than it actually is: remember that rates are relatively low, capacity is relatively loose, and spot volumes—but not contracted volumes—are soft relative to last year.

That said, we are watching spot rates on lanes heading into undesirable backhaul markets. Those lanes tend to be the first markets where carriers recover pricing power and begin to charge freight brokers more on a per-mile basis. The Los Angeles to Seattle lane led the way out of the mid-April trough and is continuing to see strong movement to the upside; if the pattern holds, LA to Dallas and Chicago to Atlanta will gain momentum.

Spot rates from Los Angeles to Dallas are now what we would consider healthy, matching some peak levels from prior years, as we outline below. The problem is that spot volumes are not there in sufficient force to inflate the whole market: large-asset based carriers are still accepting more than 95% of their tendered loads, starving spot markets of freight.

The number to watch going forward, especially as Memorial Day noise works through our volume data’s seven-day moving average, is the national outbound tender rejection index (OTRI.USA in SONAR). When OTRI reaches 7-10%, carriers will have regained meaningful pricing power, routing guide compliance may worry shippers, and spot markets will begin heating up.

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