Flatbed outbound tender rejection rates are surging, reaching their highest recorded level. Meanwhile, reefer and dry van outbound tender rejection rates settled slightly lower for the week as February enters its final stretch.
A rise in the volatile flatbed space isnβt uncommon. Looking at four years of seasonal data shows flatbed tender rejection rates have risen beginning in the final week of February through the first week of March.
However, volatility is a cornerstone of the open-deck space. While there have been increases, they more closely resemble a noisy stair-stepping pattern, building through late March into early April as construction activity picks up and weather improves on job sites.
Demand-side strengthening in manufacturing may be one reason for the surge. The most recent ISM Manufacturing PMI hit 52.6 in January, the first expansion in 12 months.
Additionally, U.S. raw steel output is showing higher year-over-year comps, up 5%. The Midwest in particular saw increases in both volumes and spot market rates.
The current surge is notable in its intensity. Both flatbed outbound tender rejection rates and spot rates moved upward in parallel.
The past week saw the SONAR Truckload Rejection Index β Flatbed (STRIF) jump 870 basis points from 33.82% on Feb. 19 to 42.52%. STRIF is 1,770 basis points higher than 24.82% last month and 2,426 basis points higher than 18.26% last year.
Flatbed spot rates have also risen. The SONAR Flatbed Truckload Index (FTI) increased 5 cents per mile all-in from $3.15 to $3.20. FTI is 30 cents per mile, or 10.3%, higher than $2.90 last month and 52 cents per mile, or 19.4%, higher than $2.68 last year.
While the open-deck segment outperformed, dry van and reefer cooled slightly week-over-week.
The SONAR Truckload Rejection Index β Van (STRIV) settled 50 basis points lower from 12.34% to 11.84%. STRIV is 129 basis points higher than 10.55% last month and 724 basis points higher than 4.60% last year.
Reefer rejection rates saw a similar cooling over the past week.
The SONAR Truckload Rejection Index β Reefer (STRIR) lost 6 basis points over the past week. STRIR is 232 basis points higher than 16.64% last month and 1,165 basis points higher than 7.31% last year.