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January 2022 Market Update

Author: David Vidri

Conditions have worsened early in 2022 as widespread winter weather, severely elevated COVID case counts, and many drivers opting to take extended time off after the New Year have collectively resulted in rapid intensification of the capacity constraints in the market. Despite the uncertainty and challenges that remain, the data supports a forecast that will show spot rates gradually decline from a peak following winter weather disruptions in Q1 2022.

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The FreightWaves SONAR Outbound Tender Volume Index (OTVI), which measures contract freight volumes across all modes, was down 15.1% year-over-year in early April. However, it is important to note that OTVI includes both accepted and rejected load tenders, so we must factor in the corresponding Outbound Tender Rejection Index (OTRI) to uncover the true measure of accepted tender volumes. 


Sonar Outbound Tender Reject Index (OTRI) measures the rate at which carriers reject the freight they are contractually required to take. The index was at 11.07% in early April after experiencing an acceleration over the past month in what had been a fairly consistent decline, from a high of 22.75% in the first week of January and 18.77% in early March. This is the lowest OTRI since pandemic-related disruptions were ramping up in mid-June 2020, nearing levels we would expect to see in an equilibrium market.


Month-to-date in April, easing conditions in the spot market and normal seasonal slowdowns early in the second quarter have resulted in plunging spot rates for Dry Van and Reefer equipment, while flatbed rates continue to rise as building and construction season gets underway.


Economic activity in the manufacturing sector grew in March, with the overall economy hitting 22 consecutive months of growth. LTL volume remains solid as capacity is still being strained by the supply chain struggling to recover from labor force shortages and backlogs caused by the pandemic.


Changes to the capacity landscape as a result of rising fuel costs and shifting market conditions could take several months to play out. 

The strong growth in single truck operations since mid-2020 has created downside risk exposure for truckload rates due to the nature of the competition it creates in the spot market. We are unsure of how long the elevated fuel rate environment will last and ultimately how large of an impact this will have on capacity trends, but if small operations begin to close up shop, used equipment and qualified drivers should start to become available to larger fleets.


Forecasting freight demand remains challenging, as COVID-related shutdowns in China and the war in Ukraine both present unknown risks to future availability or demand for certain commodities or materials.


The consumer price index rose to a new 40-year high again in March, and prices have now climbed 8.5% year-over-year. The data indicates that rising prices have not yet had a significant impact on consumer demand, however, it is our belief that decreased consumer spending power will result in declining consumer demand should inflation persist or worsen. 


The short-term outlook is clear: Elevated contract rates will continue to support a demand shift away from the spot market, resulting in continued downward pressure on spot rates through at least mid-May when summer peak season commences.

Truckload Demand

After a month of normal seasonal demand trends throughout December, an irregular holiday setup resulting in even less capacity on the road than normal and several back-to-back bouts of harsh winter weather have led to a surge of spot activity after the turn of the New Year. Although winter weather has proven to be problematic in past years, the normal seasonal trend would indicate easing demand pressures in the first quarter. If winter weather conditions continue to disrupt carrier networks, we could see a continuation of elevated spot volumes for the foreseeable future.

FreightWaves SONAR Outbound Tender Volume Index (OTVI), which measures contract freight volumes across all modes, was up 2% year-over-year in early January. It is important to note that OTVI includes both accepted and rejected load tenders, so we must discount the index by the corresponding Outbound Tender Rejection Index (OTRI) to uncover the true measure of accepted tender volumes. If we apply this method to the year-over-year OTVI values, the growth in volume increases slightly to 3%. Tender rejections are down 6.4% from 22.64% a year ago to 21.2% this year, contributing to the OTRI adjusted measure’s higher growth in actual freight volumes.

When drilling down to specific equipment types, the dry van tender volume index was down 1%, and the reefer tender volume index was down 2%, year-over-year. This equated to a 1% increase and a 3% increase in actual volumes for the two modes, respectively. Tender rejections were lower for both equipment types year-over-year, resulting in improved growth rates when considering actual volumes. 

DAT data indicates that year-over-year spot volumes were up by 48.4% in December, up from 41% in November and 35% in October. Month-over-month spot posts were up 13.7% in December, but a portion of that is a result of the repeat postings as constrained capacity continued to be a major theme, particularly late in the month. The 52% week-over-week increase the week after the New Year helps illustrate the impact of carriers taking an extended holiday and the impact from winter weather in early January.

FTR and Truckstop’s Total All Mode Spot Volume Index started January up 30% from the first week in December. The all mode index remains up 37% year-over-year. This metric has trended up slightly month-over-month after declining consistently from 112% year-over-year at the end of June to 21% at the end of November. The increase in spot volumes in early January is in line what was seen on the DAT spot load boards.

Truckload Supply

In December it is common to see capacity tighten in the weeks leading up to Christmas and the New Year as drivers take time off for the holidays. After a long year in a capacity constrained freight market, we saw a significant number of drivers opt to extend their vacation into the first week of 2022. This led to a deviation from the easing of conditions that are normally seen in early January. As we saw in early 2021, widespread winter weather conditions can lead to significant disruptions of capacity networks. In early 2022, we have seen winter storms create challenging driving conditions from coast to coast, which has led to problems for shippers, particularly those with new contract awards going live at the start of the year. A single storm rarely has a widespread and lasting enough impact to result in long-term rate hikes, but repeated storms, impacting large portions of the country, could mean a tough winter ahead for shippers and carriers.

Sonar Outbound Tender Reject Index (OTRI) measures the rate at which carriers are rejecting the freight they are contractually required to take. The index is currently at 21.03%, down from the high of 22.75% seen in the first week of January, but up from a low of 19.0% seen in early December, the lowest rejection rate since July 2020. In each of the prior three years, rejections rates had already trended below December levels by this point in the quarter, with produce season in late March/early April being the nearest cause for normal seasonal concern. The downward trend seen over the past week is a good indication that we should expect to see easing pressures ahead, assuming we see a break from additional bouts of widespread winter weather conditions.

OTRI remained elevated into early January, a deviation from the normal seasonal trend as winter weather, covid and the holiday season impacted capacity.

Dry van and Reefer tender rejections followed a similar trend to the all mode index, staying elevated above pre-holiday levels into the second week of January.

The DAT Load to Truck Ratio measures the total number of loads compared to the total number of trucks posted on their load board. In December, the Dry Van Load to Truck Ratio increased to 6.54, up 25.9% month-over-month and 35.2% year-over-year. The December increase is in line with historical norms, as we tend to see load to truck ratios increase in December as peak retail season activates the spot market and carriers take time off around the holidays.  

The Reefer Load to Truck Ratio decreased to 14.02, up 17.6% month-over-month and 64.6% year-over-year. Reefer load to truck ratio trends from November to December vary from year to year, but the increase in 2021 was a deviation from the decline seen a year ago.

The weekly load to truck ratios help illustrate the rapidly tightening conditions the market experienced in the weeks leading up to and following the New Year. With many carriers taking extended time off and winter weather conditions making travel difficult, we saw increased spot posting activity and a reduction in the amount of available capacity. 

The Morgan Stanley Dry Van Freight Index is another measure of relative supply. The higher the index, the tighter the market conditions. According to the index, conditions ended the year well above historical averages and continued to tighten in the first few days of 2022. Although their straight line forecast is hard to trust, the consistency seen year-over-year of the seasonality throughout the year is highly informative about what directional trends to expect on a go-forward basis. Looking forward, normal seasonality would indicate easing tightness through Valentine’s Day, before seeing demand pick back up in March.

Truckload rates

Dry van spot rates continued their climb, reaching a new all-time high of $3.00 per mile, including fuel, in December. Early January results show dry van spot rates are increasing rather quickly and have bucked their normal seasonal trend, currently sitting at $3.14 per mile. Reefer spot rates climbed just $0.02 to $3.47 per mile in December, but have followed dry van rates, increasing $0.13 to $3.60 per mile, in early January. Normal seasonality would indicate that we should expect to see spot rates plateau or decline in January and February. Capacity conditions would need to improve rapidly for a reversal of the current conditions to occur in January, but assuming stable weather patterns and declining COVID case counts, we still believe normal seasonality could prevail as we progress toward February.

The Contract and Spot Van Rates continue to climb in unison to new records. Rapidly tightening conditions in early January have resulted in spot rates climbing faster than contract rates.

Dry van contract rates, which have only declined month-over-month once since May 2020, have reached a new all-time high in early January at $2.60 per mile, excluding fuel. Reefer contract rates, which have also seen consistent growth over the last 18 months, have plateaued in January at $2.68 per mile, excluding fuel. The flatbed market has seen a slight down tick in contract rates, decreasing $0.02 in early January to $2.54 per mile, excluding fuel.

Ltl Market Notes

Capacity Outlook

All signs point to continued challenges with capacity throughout 2022. It is difficult to tell whether or not we will see equipment and or driver issues begin to improve as the year progresses, but no clear improvements are expected in the short term. This sentiment is echoed in the data Morgan Stanley collects as part of its regular survey. The charts below show just a two percentage point reduction in respondents that indicated tight LTL supply conditions month-over-month in December. 

We are hearing anecdotes about a high number of drivers coming down with COVID in early January. This has impacted the availability of drivers so far month to date. Additionally, we are expecting cross-border shipments to experience tightening conditions later in the month as both the U.S. and Canada will require drivers entering the country to show proof of vaccination.

Now that the holiday season has passed, there is some hope that a decline in demand for local, parcel delivery jobs could result in a shift of drivers back to the long haul trucking sector. Additionally, the White House has launched its plan to try and fix the driver availability issue. The plan focuses on recruiting new drivers to the industry and making it easier for them to acquire their CDL. 

Regardless of what forces result in drivers entering the long-haul trucking workforce, carriers are likely to continue to encounter the same challenges with equipment shortages that have persisted over the past year. Class 8 truck production did improve 12% per day as component availability improved, but these gains are limited as declines in production are expected in December. This increase in production levels led to a decrease in the average time from order to delivery from 14.6 months in October to 13.1 months in November. FTR is reporting that OEMs are still way behind due to the shortages of semiconductors and other components and it is expected to take more than a year for OEMs to catch up with demand. Additionally, FTR indicated that growth in new class 8 truck orders in December shows at least some optimism about future supply chain performance as OEMs have been content in keeping backlogs at current levels, but the current order volume still understates the tremendous demand for new trucks.

New truck lead time decreased from 14.6 months in October to 13.1 months in November as production levels improved in the month.

New trailer production levels increased slightly in November, as OEMs produced 2% more units on a per-day basis. FTR indicated that the outlook for new trailer production in 2022 improved and is now forecasting production to start growing in 2022 as parts and components become more plentiful.

FTR’s forecast for truck utilization, the share of seated trucks actively engaged in freight hauling, is mostly unchanged from last month’s update, with the expectation that it is to remain above 96% through the entirety of 2022 and beyond.

Volume Outlook

Although there are no signs yet of seasonal slowdowns in the first quarter, we are still taking a wait-and-see approach throughout the remainder of the month. Disruptive weather patterns have made the data difficult to interpret. We believe the next few weeks will be very telling for what to expect throughout the first half of the year. 

Congestion at the ports remains, indicating there is still a healthy amount of backlogged volume to work through. High import volumes are expected to continue throughout 2022, supplying much-needed raw materials to support manufacturing and industrial production. On-the-shelf availability is currently running at 90%, down just 1% from pre-pandemic levels. This is a sign that even with all the concerns around port congestion and supply chain constraints, retailers were able to keep inventory levels high enough to fulfill consumer demand throughout the peak of the holiday shopping season. Retail inventories remain up 2.5% year-over-year.

There are some concerns as to how the spread of the Omicron variant not just here in the U.S., but overseas in China, could impact truckload demand. It is a long shot, but if overseas lockdowns and Chinese New Year related shutdowns enable U.S. ports to work through and clear backlogs, then it is possible to see declining demand in the domestic truckload market. The spread of Omicron could just as easily impact labor availability at the ports here in the U.S. limiting their ability to catch up, so it really is a guessing game.  

The new White House dashboard illustrates the surging demand for imports, up 15% from the prior peak in 2018, and slightly lower on-the-shelf availability of products, down just 1% from pre-pandemic levels.

Manufacturing and industrial production continue to be ripe for growth after being severely bottlenecked by supply chain issues in 2021. Inventories remain low and supply chain constraints are expected to improve as the year progresses, leading to recovery in production levels which would be an additional boost for demand.

FTR’s latest truck loadings forecast shows a slightly stronger outlook for 2022 than last month’s forecast coming in at 3.9% for the full year, up from 3.6% last month. 

Increases in the full year 2022 forecast were seen month-over-month for all equipment segments except for Dry Van, which is unchanged from last month. With volumes forecasted to continue to grow in 2022, we must note that easing pressures in the market will require improvements in capacity conditions as the anticipated growth in demand will continue to stress carrier networks and keep upward pressure on rates until capacity can be added to the road.


The Bank of America (BofA) consumer spending data provides visibility into changing consumer behaviors and spending patterns. Total card spending is up 8.2% year-over-year and 14.5% compared to 2019 for the 7-day period ending January 8th. These numbers indicate consumer spending remains elevated as we move into January. 

Inflation is expected to have a growing impact on consumer behavior in 2022. We are already seeing what looks like growth in a few categories equate to reductions in spending when adjusting for inflation using the most recent CPI data. BofA specifically called out lodging and grocery spending in their latest consumer spending report. As inflation continues to rise, consumer spending power is reduced, resulting in downward pressure on demand over time.

Omicron had a significant impact on consumer spending in December. On a month-over-month basis, we saw declines in airline spending for the first time since the surge of Delta cases in August. These trends indicate the sensitivity of the consumer to the ongoing changes associated with surges in COVID case counts. While we expect spending on durable goods to ease in 2022 as a result of the pull-forward demand for durable goods in 2021, additional COVID variants popping up throughout the year could lead to a continuation of strength in spending on durable goods versus services.

Last month we noted the personal savings rate had returned to pre-COVID levels, indicating consumers are not saving as much as they were, and that current spending levels may not be sustainable. The personal savings rate trended down again last month, providing even more support that at some point we will see the economy slow down and allow for a return to normal unless additional stimulus is passed. 

The unemployment trends show mixed results in December. Initial claims trended up slightly, coming in at 230,000, down from 184,000 from last month, but remain well below the elevated levels seen in the early stages of the pandemic. Continued claims have declined further, again reaching their lowest levels since the start of the pandemic, down to 1.56 million from 1.99 million last month, on a weekly basis. 


While most of the underlying conditions pertaining to the freight market remain relatively consistent with the back half of 2021, 2022 has gotten off to a rocky start. Widespread winter weather conditions, severely elevated COVID case counts, and many drivers opting to take extended time off around the holidays have collectively resulted in rapid intensification of the capacity constraints in the market. Tender rejections still have not yet returned to their pre-holiday levels by mid-January, a trend that hasn’t been seen in any year since the index was released. We continue to see just how sensitive carrier networks are to disruptive events such as snow and ice storms. 

In the short term, we expect to see shippers struggle to maintain their routing guides while winter weather continues to impact large portions of the country. When travel is difficult or impossible, trucks fail to get to where they need to be in time to service their normal routes. As a result, we expect to see an active spot market lead to additional upward pressure on spot rates. If the winter weather subsides and allows for some stability in the market, we do expect to see normal seasonal patterns prevail. The longer it goes without seeing stable conditions, however, the more we risk seeing a similar situation to what played out after the ice storms in February 2021.

The outlook for conditions, as we look ahead in 2022, will depend largely on what we see from truckload demand. Congestion at the ports and backlogged orders in manufacturing and industrial production indicate that we should expect demand strength to continue. Inflation and the expiration of government stimulus will continue to result in a reduction in consumer spending power, likely leading to pullbacks in consumer demand. There has been little to no improvement in capacity conditions, which continued to see challenges with driver and equipment availability.  COVID has the potential to be highly disruptive to both domestic and overseas labor availability, and influence the balance of spending between durable goods and services. 

Despite the uncertainty and challenges that remain, we believe the data is supporting a forecast that sees spot rates on the decline from a peak following winter weather disruptions in Q1 2022. These rate declines will be gradual as we expect improvements in the truckload supply and demand balance to take place slowly. On a year-over-year basis, we now expect to see spot rates up in the high single digits due to the rapid, unseasonal rate surge in January, with year-over-year comps turning negative by early in the third quarter.

About The Market UPdate

The Arrive Monthly Market Update, created by Arrive Insights, is a report that analyzes data from multiple sources, including but not limited to FreightWaves SONAR, DAT, FTR Transportation Intelligence, Morgan Stanley Research, Bank of America Internal Data, Journal of Commerce, Stephens Research, National Retail Federation and FRED Economic Data from the past month as well as year-over-year.  

We know that market data is vital to making real-time business decisions, and at Arrive Logistics, we are committed to giving you the data you need to better manage your freight.



Tender Volumes are representative of nationwide contract volumes and act as an indicator of Truckload Demand.


Tender Rejections indicate the rate at which carriers reject loads they are contractually required to take and acts as an indicator of the balance between Truckload Supply and Demand.


New Truck Orders is an indicator of the trucking industry’s health and carrier sentiment, as carriers typically invest in new trucks when demand and optimism are high.


Industrial Production measures the output of the industrial sector, including mining, manufacturing and utilities.


US Customs Maritime Import Shipments, China to the United States measures the total number of import shipments being cleared for entry to the U.S. from China.


Rate Spread measures the difference between the national average contract rate per mile and the national average spot rate per mile and is closely inversely correlated to movements in tender rejections and spot market volumes.


Weekly Jobless Claims are used as a barometer for the pace of layoffs in the general economy.


Unemployment Rate is the number of people who are unemployed that are actively seeking work.

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