Refrigerated tender rejections are still running hot while van and flatbed markets cool off, and the big swing factor is intermodal: cost savings are now around 33% versus over-the-road trucking, pulling more freight off the highway even as refrigerated freight remains far less flexible. In a recent SONAR Daily Update, FreightWaves' Craig Fuller and Julie Van de Kamp broke down reefer rejection trends, flatbed seasonality, rail container volume strength, and what mode conversion means heading into Labor Day.

Refrigerated tender rejections are bucking a broader softening trend across truckload modes, holding steady at 20% to 20.5% even as van and flatbed rejection rates ease, according to FreightWaves SONAR data reviewed during the broadcast. The rejection rate measures the share of contracted freight loads that carriers turn down — so a reading above 20% signals that carriers carrying refrigerated freight have meaningful leverage to decline contract tenders, a level historically associated with tight capacity even as other modes loosen.

The persistence of reefer tightness is partly seasonal — hot summer temperatures drive demand for temperature-controlled capacity — but Fuller and Van de Kamp identified a structural factor that may matter even more to carriers and shippers: refrigerated trailers cannot easily convert to intermodal. Unlike dry van freight, reefer loads require purpose-built refrigerated containers that must run continuously, making mode substitution largely unavailable as a pressure valve.

"Refrigerated is the least fungible mode with intermodal," Fuller said.

That intermodal pressure valve, meanwhile, is wide open for dry freight. The intermodal contract savings index — which measures the cost gap between intermodal and trucking — is running 33% above over-the-road costs, the highest level in at least three years. Van de Kamp pointed directly to that figure as the driver of record intermodal volumes. The dynamic matters for the broader truckload market: when shippers can shift dry van freight to rail at a sizable discount, highway demand softens, which in turn weighs on truckload spot rates and carrier pricing power in those modes.

"33% — I think that's your answer on why intermodal is so strong right now," she said. "Intermodal is not getting cheaper. It's just not getting more expensive."

Total outbound rail container volumes are running significantly above the prior three years on a seasonally adjusted basis, with SONAR data showing the current year's volume trajectory continuing upward alongside the widening cost-savings index. Fuller noted that the modest recent dip in the savings index likely reflects spot truck rates easing slightly rather than any move in intermodal pricing — a dynamic that could narrow the gap if trucking softens further heading into fall. For shippers and carriers, the spread between the two modes is the number to watch into the fall: how it moves will shape how much freight stays on rail versus returns to the highway.

Flatbed rejections, by contrast, have fallen sharply from their spring highs. Van de Kamp attributed the pullback to construction seasonality: building materials move heavily in the first half of the year before summer heat slows construction activity, particularly in northern markets where the building season can be limited to roughly 10 months. With that demand cycle winding down, flatbed capacity has loosened considerably.

On the cross-border rail front, Fuller flagged early data on Canada-to-U.S. and U.S.-to-Canada outbound rail container volumes as a potential leading indicator for tariff-related trade shifts, though both anchors said it is too early to draw conclusions. Van de Kamp noted that Canadian rail volumes in bulk commodities — metals and mining in particular — have been lagging U.S. levels for some time, predating the current tariff environment. Fuller added that Mexican rail volumes remain relatively strong but represent only a small share of overall North American rail activity. Both said they will continue tracking cross-border flows for signs of tariff impact in the weeks ahead.

To recap the key data points: refrigerated tender rejections are holding at 20%–20.5%, outperforming all other truckload modes, driven by summer heat and a structural lack of intermodal substitution; the intermodal contract savings index stands 33% above trucking costs, a three-year high, fueling record outbound rail container volumes; and cross-border U.S.-Canada and U.S.-Mexico rail volume data are being monitored as potential early indicators of tariff-driven trade shifts, though current data remain inconclusive.

This summary is based on a transcription of the interview; the full interview is available in the video above.

Source: FreightWaves