The national average dry van truckload spot rate fell 1% last week to $2.83/mile, which is certainly expensive but lower than the levels reached in the first week of September and thereafter. Tender rejection rates breached 25% last week again but fell Monday to 24.76%.
At this point, most non-asset 3PLs have repriced large portions of their contracted freight — we hear from freight brokerage executives that shippers “started paying up in September” — which will ease some pressure on gross margins.
At the same time as shippers raised rates on contracted truckload freight, railroads have been hard at work restoring fluidity to intermodal networks and growing volumes. So far, the rails have accommodated higher intermodal demand by simply building longer trains, but we’ve noticed a drop in intermodal tender rejection rates that suggests IMCs have found it easier to procure containers too.
We also know that capacity is coming back into the market, whether measured by new truck orders, employment or used truck prices. What remains to be seen is whether the adjustments made by these operators will be enough to keep freight flowing smoothly through the fourth quarter or whether unpredictably volatile e-commerce and retail demand will create the chaos that many anticipate. This week, the last week in October, should be a bellwether for peak season.
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