Tender rejection rate changes typically lead spot rates by several days as the underlying contract market destabilizes in front of the spot market. Currently they are moving in different directions. Why is this happening?
The freight market is going through a lot of changes. The pandemic year capacity crunch has motivated shippers to change their behaviors and find new ways to move goods through their supply chains. The numerous changes have made it increasingly difficult to look at historical patterns and draw actionable conclusions. The most recent casualty of this dynamic shift is the relationship between aggregate tender rejection rates and spot rates. Will this divergence last forever?
The short answer is probably not, but this temporary break in their relationship can also lead to more detailed insight with a little digging. First, a basic understanding of tender data and spot rates is necessary to make any significant conclusions.
Defining tender data and spot rates
Load tenders are electronic requests for capacity submitted by a shipper to a carrier. They are sending a message to a carrier asking for a truck to show up at a given time at a predetermined (contracted) rate. Tender data is based heavily on contracted rate agreements between shippers and carriers, meaning it measures how effective…