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March 2022 Market Update

Author: David Vidri
MARCH 2022

Freight market conditions leading up to this week indicated a continuation of trends in line with normal seasonality. Still, conditions are likely to experience a meaningful shift due to surging oil and gas prices. The forecast for the remainder of 2022 is now expected to experience deflationary rate conditions, but how far and how quickly rates fall is highly dependent on how future inflation and rising fuel prices play out.

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Undoubtedly, the most important factor in our outlook for future market conditions is the sudden and unprecedented rise in the price of oil and gas. In addition to providing insights on the usual metrics we track, we will break down our expectations for how these changes will impact the domestic freight market.

On Monday, March 7, 2022, Diesel fuel prices rapidly rose by more than double the previous high week-over-week increase. Not only did the national average rise by a record $0.745 per gallon, but the price of $4.849 per gallon was a record in itself, eclipsing the previous high of $4.764 in July 2018.

The increase in the national average price per gallon resulted in a surge in the average, per-mile fuel recovery rate. Referencing the DAT’s methodology to calculate fuel surcharge rates, the $0.745 increase in the national average cost per gallon translated to a $0.12 increase in the fuel surcharge per-mile. 

In the very near term, this sudden rise in fuel costs will act to keep truckload rates elevated despite the downward trend seen in dry van and reefer linehaul spot rates in recent weeks. The longer term impacts, however, are where we expect the larger effect of elevated fuel costs to take a toll. The latest CPI report indicates that the annual inflation rate has increased again to a 40 year high of 7.9% as of the end of February. Unfortunately this does not take into account the sudden shock that rising fuel prices will have on the inflation number posted at the end of March. This inflation is going to impact producers, transporters and consumers of goods alike. The cost to produce goods and deliver them to consumers will increase. This will almost certainly be passed along to the consumer in the form of higher prices, lessening consumer spending power. Our hypothesis is that this cycle will result in fewer durable goods purchases, leading to slowing truckload demand. The longer fuel prices stay elevated, the more pronounced this impact will be. 

One of the most prominent trends we have seen in truckload carriers since the start of the pandemic was the growth in new carriers, particularly single truck operations. It is estimated that more than 70% of the 100,000 plus new carriers still holding authority contain just one vehicle. These carriers are more susceptible to rising fuel costs, and the impact it will have on their cash flows. Additionally, these carriers are much more likely to be players in the spot market. If our hypothesis regarding truckload demand declines due to rising inflation is correct, the opportunity in the spot market will begin to dry up as truckload demand falls. This will not only make access to freight more difficult, but the competition amongst carriers could intensify resulting in rapid spot rate deceleration, putting further financial strain on carriers. 

The most similar example we have of rapidly rising fuel costs was in 2005. Hurricanes Katrina and Rita wreaked havoc on Louisiana and rapidly cut our domestic oil supply, causing fuel prices to surge $0.55 within a month. In December 2005, three months after the surge in fuel costs, the record for revocations of carrier operating authority was seen. This leads us to hypothesize that we should expect a similar result from the current fuel cost increase we are experiencing. Although this appears to be pulling capacity off the roads, we believe it would actually act to resolve the equipment and driver shortage problems for the larger carriers, who are more equipped to handle the cash flow constraints and have less exposure to the spot market’s volatility, therefore giving them the ability to attract owner operators and their equipment. 

There are many uncertainties that remain surrounding the ongoing conflict in Ukraine and what that means for the duration and the magnitude we will see in terms of impact on fuel prices and the domestic freight market. However, we believe that this situation is unlikely to be resolved in the near term, meaning that we expect to see significant changes as a result of recent events. The most likely scenarios of declining truckload demand and an increase in capacity associated with larger fleets is a mix that should result in deflationary market conditions, should fuel prices remain elevated for a prolonged period of time.

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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

FreightWaves SONAR Outbound Tender Volume Index (OTVI), which measures contract freight volumes across all modes, was down 6.0% year-over-year in early March. 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 negative growth trend in tender volumes flips to an increase of 4.4%. Tender rejections are down 30.0% from 26.83% a year ago to 18.77% as of March 1st this year, helping to explain the increase in accepted tender volumes, despite the decline in total tender volumes.

When drilling down to specific equipment types, the dry van tender volume index was down 6.7%, and the reefer tender volume index was up 22.2%, year-over-year. This equated to a 3.4% increase and a 6.1% increase in actual volumes for the two modes, respectively. Tender rejections were lower by nearly 30% year-over-year on March 1st for dry van equipment, and 39% lower for reefer equipment, resulting in flips to positive growth rates when considering actual volumes. 

DAT data indicates that year-over-year spot volumes were up by 24.1% in February, down from more than 100% growth year-over-year in January. The sharp decline in spot volumes is in line with the decline in tender rejections, and is a result of more challenging comps compared to the volatility experienced with the disruption from the ice storms last February. The 4% week-over-week decrease the first week of March illustrates the market is continuing to follow a normal seasonal trend, easing in the first quarter.

FTR and Truckstop’s Total All Mode Spot Volume Index started March up 7.6% from the first week of February. The All Mode index remains up 5.9% year-over-year, down significantly from up 32% a month ago. Last year, spot volumes took off in February following the ice storms that crippled southern states, resulting in a decline in year-over-year comparisons as of late. Recent spot volumes have begun to increase in early March in line with historical averages for the FTR/Truckstop data, which is heavily weighted in the flatbed and specialized equipment space and therefore sees volume increases in early spring tied to new construction. 

Truckload Supply

Sonar Outbound Tender Reject Index (OTRI) measures the rate at which carriers reject the freight they are contractually required to take. The index is currently at 17.42% in early March after experiencing a fairly consistent decline from a high of 22.75% in the first week of January. There were slight increases seen in weeks plagued by severe winter weather, but conditions quickly returned to trend once the weather conditions passed. It continues to be a welcome sign for shippers to see normal seasonal trends in the first quarter, indicating some balance is being restored to the freight markets. The current OTRI level is the lowest seen since mid-July 2020 as the pandemic-related disruptions were still ramping up. Before the recent increase in fuel cost, the gradual nature of OTRI’s decline was a trend we expected to continue throughout 2022 as elevated contract rates resulted in improvements to tender rejections. If we see demand begin to fall more rapidly now that fuel costs have surged, the gradual nature of the downward trend in tender rejections would accelerate, resulting in more rapid declines of OTRI as carriers begin to accept tenders at higher rates to maintain volumes. 

OTRI has trended down in back-to-back months from a peak seen in the first week of January. Indicating a return to more normal seasonal patterns as a downward trend is expected in Q1.

Dry van and Reefer tender rejections followed a similar trend to the all mode index, trending lower in back to back months from highs in early 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 February, the Dry Van Load to Truck Ratio decreased to 7.33, down 21.9% month-over-month and 2.7% year-over-year. Recent trends indicate further easing conditions in early March for dry van equipment types.

The Reefer Load to Truck Ratio decreased rapidly to 13.74, down 32.7% month-over-month and 13.6% year-over-year. The data illustrates the normalization that has occurred in the reefer market over the last month as extreme cold and widespread severe winter weather eased. Recent trends indicate further easing conditions in early March for reefer equipment types.

The weekly load to truck ratios help illustrate the consistent declines that have been seen across dry van and reefer equipment types, but the reverse trend is taking place on flatbed equipment. With construction season getting underway in warmer climates, flatbed activity is starting to ramp up. 

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 followed a similar trend to what was seen in DAT and Freightwaves SONAR data, easing into March after seeing a downward trend throughout February. 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 a continuation of the easing conditions before seeing demand pick back up in March. However, recent trends with fuel indicate that we could see a deviation from normal seasonal trends to the downside as we get into the typically more active periods in spring and summer.

Truckload rates

As we dig into rate trends this month, it is important to note that next week’s DAT data could look very different once results from this week and new fuel costs are taken into account. As of now, dry van and reefer spot rates are both trending down for the second straight month. This trend is worth noting since fuel costs have been on the rise even before the rapid fuel increases seen the week of March 7th. This means that before the recent fuel cost surge, the downward trends seen in linehaul rates were enough to offset the growth in the fuel surcharge. Contrary to the trends in dry van and reefer rates, flatbed rates continue to rise as building and construction season gets underway in the warmer areas. Normal seasonality would indicate that we should expect upward pressure on spot rates due to increasing demand as we approach the end of the quarter. Still, recent events could result in a deviation from this trend.

Although spot van rates are trending down for a second straight month, contract rates have continued to climb as new awards continued to go live throughout February.

Dry van contract rates, which are now trending to see an increase in twenty-one out of the last twenty-two months, have reached a new all-time high in early March at $2.66 per mile, excluding fuel. Reefer contract rates have also seen consistent growth over the last twenty-two months, and have continued to increase in early March, currently at $2.80 per mile, excluding fuel. The flatbed market has also seen rising contract rates in early March, currently at $2.92 per mile, excluding fuel.

Multimodal Market Notes

LTL Insights

Mexico/Cross-Border Insights

We continue to note the strength of Laredo, TX as a strong proxy for cross-border freight movement as it sees by far the highest cross-border truck traffic at the Mexican border.

OTVI.LRD - Outbound Volume (Proxy for Northbound Mexico/US Volume)
ITVI.LRD - Inbound Volume (Proxy for Southbound (SB) Mexico/US Volume)
OTRI.LRD - Outbound Tender Reject Index (Available capacity at the border)

Capacity Outlook

The capacity landscape could shift quickly should elevated fuel costs persist for an extended period. As noted in our section on fuel cost increases, the strong growth in single truck operations since mid-2020 has created downside risk exposure for truckload rates associated with declining demand trends as a result of increasing fuel costs driving further inflation. We are unsure of how long the elevated fuel rate environment will last and ultimately how large of an impact this will have on demand, so it is still worth evaluating capacity conditions assuming the issue is resolved and should come to pass quickly.

Prior to the increase in fuel costs, not much had changed in terms of improvements to overall capacity in the marketplace. We were still expecting continued challenges with capacity throughout 2022 as a result of equipment and labor shortages.

FTR is reporting that Class 8 truck production decreased by 12% per day in January, but that number remained skewed as OEM’s finished up many previous semi-completed units in December to boost year-end figures. Build rates are not expected to see meaningful increases in the near term as semiconductor and other part shortages continue to impede production levels. The government announced plans to increase semiconductor production, but that could take years to execute due to the significant barriers to entry and time to ramp up production. 

The decrease in production levels led to a slight increase in the average time from order to delivery from 9.3 months in December to 10.4 months in January. FTR continues to reiterate that new truck orders are not a good indicator of demand as OEM’s continue to meter new orders in an attempt to control backlogs, and the new truck lead time is not expected to improve next month as more orders are entered and production levels stabilize.

New truck lead time increased from 9.3 months in December to 10.4 months in January as production levels improved in the month.

New trailer production levels declined 4% in January, but are expected to increase in Q2 as parts availability improves. Similar to truck backlogs, OEMs are carefully adding to new trailer orders to control backlogs. New orders remain a poor indicator of trailer demand. 

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 at or above 97% through 2022, and 96% in 2023, however, risks remain mostly to the downside.

Volume Outlook

A month ago, the major theme behind our outlook for a continuation of strong demand was backlogs. Backlogs at the ports. Backlogs in manufacturing orders. Backlogs in auto and other industrial production. Now, there are two new variables that indicate demand could begin to see pullbacks. First, is the increase in fuel costs and the downstream impact that further inflation will have on consumer demand. Second, is that inventories are up significantly so far year-to-date. This is an odd occurrence, as inventories are typically depleted after the Q4 retail push. The February Logistics Managers’ Index report has indicated that a combination of over-ordering to avoid shortages, late-arriving goods due to supply chain congestion, and a softening of consumer spending has created a logjam. These elevated inventory levels signal some optimism that backlogs at the port should ease as ordering patterns from Asia are expected to slow. 

The readings from the last three Novembers (usually near the height of Q4 inventory buildups) and Februarys (when Inventory Levels are often down) are highlighted here for the purpose of demonstrating how unusual the last three months have been. From November 2019 – February 2020 Inventory Levels were down 5.3 points, from November 2020 – February 2021 they were up 2.0 points, from November 2021 – February 2022 they are up 21.4 points.

The backlogs in manufacturing and industrial production are still strong, but continued inflation poses a threat to production levels moving forward as production costs rise. Continued inflation and rising interest rates would also present a downside risk to residential construction as housing costs rise due to an increased cost of building materials.

It is important to note that FTR’s latest truck loadings forecast does not account for impacts from the recent rise in fuel costs. That being said, the forecast is still indicating growth for each of the three years from 2022 through 2024. The growth is projected to continue at a slowing rate, but grow, nonetheless. Time will tell if rising inflation will impact their forecast, but for now, all equipment segments should expect to see demand strength for the foreseeable future.


Uncertainty is high as it relates to future economic conditions and consumer sentiment. This week we witnessed an unprecedented increase in oil and gas prices. The full impact this will have on the economy and the consumer is unknown, but it is expected to be relatively significant, especially if prices remain elevated. Inflation is a clear risk. The impact on truckload demand, should we see inflation continue to grow, is also clear. Decreased consumer spending power will result in declining consumer demand and, therefore, declining truckload demand. We believe the economic conditions leading up to the recent surges in oil and gas prices matter when evaluating the potential future impact. 

The Bank of America (BofA) consumer spending data provides visibility into changing consumer behaviors and spending patterns. Total card spending is up 13.4% year-over-year and 25.3% compared to 2020 for the 7-day period ending March 5th. Over the last month, the average year-over-year increase in spending was 15.7%. These numbers generally indicate consumer spending has improved, but recent spending trends may be impacted by rising gas prices. 

As inflation continues to rise, we know that the same dollars spent a year ago do not equate to the same dollars spent today. Therefore, more spending does not necessarily mean more freight. Truckload demand is also impacted by the allocation of consumer dollars that are being spent on durable goods in relation to services. February data confirms there is still pent up demand for leisure services and travel as spending in those sectors increased as Omicron cases fell. As case counts continue to fall and mask mandates ease in cities around the country, we expect this pent-up demand for leisure services to continue to result in moderated spending on durable goods. This trend presents downside risk to truckload demand.

The impact from falling Omicron cases in February can be seen in the spending by major category. On a month-over-month basis, we saw increases in airlines and lodging spending and declines in spending on furniture, clothing and general merchandise.

The personal savings rate fell to 6.4% in January, nearly 2% below February 2020 levels, indicating that consumers are not saving as much as earlier in the pandemic and that current spending levels may not be sustainable. Seeing this trend just as fuel prices at the pump increased rapidly means consumers are less prepared to handle the increased cost and total discretionary income is likely to shrink even further. As the personal savings rate dips, it provides continued support that at some point we could see the economy, and truckload demand, begin to slow down.


The past week’s events have again thrown an unprecedented variable into the mix. Our perspective on freight market conditions before the sudden hike in oil and gas prices was beginning to come into focus. As the chart below illustrates, over the past year we have seen a general downward trajectory for contract tender rejections coinciding with increases in contract rates. Outside of severe weather, surges in rejections and volatility were somewhat predictable in line with normal seasonality around holidays and EoQs.

If we assume the conflict in Ukraine and the global tensions with Russia will persist, then we can no longer assume that conditions for 2022 will follow the same pattern we have seen over the past year. As noted, we believe that increased inflation, stemming from elevated oil and gas prices, will be a key driver in more rapid deceleration of truckload demand. These conditions indicate that deflationary market conditions are now the most likely scenario for the year ahead. The pace at which rates decline and how low they go will depend on how bad inflation gets, and how long we see prices at the pump remain elevated. We will continue to closely track and report on these changing market conditions.

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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