Chart of the Week: Outbound Tender Reject Index, Outbound Tender Volume Index – Laredo SONAR: OTRI.LRD, OTVI.LRD
Shipper requests for truckload capacity are being rejected at the highest rates since the pandemic era in Laredo, Texas — the largest U.S. border crossing market.
The Outbound Tender Reject Index (OTRI) measures the percentage of truckload capacity requests that carriers decline. Since rejecting loads is generally undesirable for carriers, rising rejection rates indicate a tightening market with limited available capacity.
Rejection rates for loads out of Laredo averaged around 3.8% from October through mid-December but surged over 6% just before Christmas and have unexpectedly remained elevated.
Since October, demand has been running approximately 10% higher year over year, yet rejection rates only spiked around the holidays. This suggests that demand alone may not explain the market tightening.
One potential driver is uncertainty surrounding U.S. trade policy. Over the past month, President Donald Trump threatened, implemented and then paused tariffs on Mexico, the U.S.’s largest trading partner by value. This uncertainty was anticipated before the election, which may explain the sustained growth in cross-border freight demand as shippers rush to move goods ahead of potential cost increases. However, the rising rejection rates suggest additional factors at play.
From an outbound freight perspective, Laredo is a relatively small market. It ranks 48th out of 135 U.S. freight markets, with just 0.7% of total outbound freight volume. Its location — a day’s drive from Dallas and just over a half-day from Houston — makes it relatively remote.
Most notably, Laredo handles far more freight moving out of the region rather than originating there, a trend that has intensified over the past year. When freight markets become heavily outbound-focused, carrier networks can become strained, leading to supply chain inefficiencies.
In major outbound-heavy markets like Los Angeles, pricing accounts for the additional cost of repositioning empty trucks (also known as “deadheading”). Shippers pay beyond the direct transport cost, covering the expenses carriers incur when relocating equipment.
However, Laredo’s cost to serve has risen even as broader freight rates decline. Carriers have struggled to pass along these repositioning costs, reducing their incentive to prioritize Laredo-bound freight.
Contract rates in key lanes, such as Laredo to Dallas, have increased 13% year over year, according to SONAR’s invoice data, while spot rates in this lane have risen 8%. Yet, these increases have not kept enough carriers in the market to prevent rising rejection rates.
