The Freight Economist
Weekly market update
The Freight Economist is back—now weekly—with the data-driven market intelligence your business needs to stay competitive. Read on for a breakdown of shifting freight rates and upcoming market outlooks.
Tender rejections continued to increase in July
The first tender acceptance rate dropped to 76%, contrasting with the typical seasonal stability anticipated after the summer produce season. This rise in tender rejections pushed routing guide compliance down to 83%, representing its lowest point since the middle of 2022. These frequent rejections, alongside greater spot market usage, significantly elevated freight expenses, causing the average additional cost over the primary carrier to climb to 14.1% in July.
Capacity is slowly returning to the market
Despite a restrictive regulatory environment, carriers are actively seeking to expand fleets to capitalize on rising spot rates and strengthening demand. While overall for-hire trucking employment remains sluggish, recent sub-sector data indicates a positive trend, with long-distance truckload employment growing for four consecutive months through June. However, while employment has increased 1.1% since the bottom in February, it remains 3.2% below its 10-year average, suggesting that a full capacity recovery remains a long-term prospect.
Strong consumer spending on goods continued to support freight demand
Accounting for inflation, sales at the wholesale level decelerated by 1.7% month-over-month in June, primarily dragged down by an 11.4% drop in petroleum and petroleum product sales. Despite this monthly decline, real sales grew 3.9% compared to the previous year. Simultaneously, real inventories edged up 0.3% over the month but registered a 2.2% reduction on a year-over-year basis. Driven by this combination of rising annual sales and declining stockpiles, the inventories-to-sales ratio stayed close to its COVID-era bottom, continuing to exert upward pressure on overall freight demand.
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