Dry Van and Reefer Markets Signal Persistent Tightness Despite Rate Softening

Despite modest declines in recent months, dry van tender rejection rates remain anchored near 11%, a level that continues to signal a structurally tight freight market with limited capacity growth. The refrigerated sector faces even greater strain, with rejection rates now exceeding both July 4th and Labor Day peaks, particularly in the Pacific Northwest and Midwest regions. The core issue is not demand weakness but rather cost pressures that have outpaced revenue gains for carriers, reducing the financial incentive for new entrants and preventing the capacity expansion needed to meaningfully loosen the market.

Regional divergence is creating operational complexity: Los Angeles faces acute pressure with 67% of lanes experiencing rate increases and spot rates running 15% above contract levels, compounded by looming West Coast port labor actions. Conversely, Savannah shows unexpected softening with rejection rates near 6% and rates below contract levels. This imbalance reflects concentration of port activity on the West Coast and suggests logistics networks will face continued fragmentation and regional volatility heading into peak season.

For supply chain professionals, the persistence of double-digit rejection rates despite 12 months of elevated pressure indicates that traditional capacity expansion dynamics have broken down. Input cost inflation for carriers, coupled with modest revenue growth, means the market is unlikely to self-correct quickly. Organizations should expect continued rate volatility on spot markets, pursue longer contract commitments on stable lanes, and monitor regional port labor developments that could trigger further disruption.