Chart of the Week: SONAR Truckload Rejection Index – USA SONAR: STRI.USA with Seasonally Adjusted Moving Average
The SONAR Truckload Rejection Index (STRI), a measure of truckload capacity availability where higher values indicate a more challenging procurement environment, has surged more than four percentage points over the past two weeks following Winter Storm Fern, which left a swath of snow and ice across portions of the South. This storm has proven to be the most disruptive weather event to surface transportation markets in nearly five years, leading many to wonder whether it is the catalyst the market has been waiting for. The recently introduced seasonally adjusted moving average (SAMA), represented by the dotted line, helps answer that question.
What is a SAMA?
In simple terms, the SAMA is an average of the past two years of index values, adjusted to reflect the current year’s trend. Any sharp deviation from the normal seasonal movements of the prior two years—either higher or lower—causes the SAMA to correct sharply back toward the established trendline. The magnitude of that correction highlights just how anomalous the current environment is relative to the longer-running trend.
The longer the correction, the more unusual the event. For businesses, recognizing that they are operating in a market well outside predictable conditions is invaluable. It signals that standard operating procedures may not apply and that contingency planning is warranted.
In this case, the SAMA indicates a decline of roughly five percentage points would be required to return to the prevailing market trend, placing STRI near 9.2%. For those familiar with the behavior of the STRI, this represents an exceptionally large deviation from the baseline. In effect, the recent move has made normal volatility appear almost stationary.
For context, the STRI has increased by more than two percentage points in only two instances: the past two Christmas seasons. Winter storm events over the previous two years pushed rejection rates roughly one percentage point higher, but it took 49 and 32 days, respectively, for the index to return to trend. This extended recovery period is where the SAMA struggles—or, more plainly, does not work particularly well.
By design, this statistical tool is meant to identify long-running trends and make only incremental adjustments in response to sustained movements. It largely ignores short-lived anomalies until they evolve into something more persistent.
Turning the page
For those trying to determine whether the market has finally broken out, the SAMA points to a baseline that is meaningfully higher than at any point over the past three years. The model shows STRI reaching a low of 6.98% in early May, historically the softest point in the post-COVID market. Notably, that level is roughly in line with last year’s summer peak around the Fourth of July.
So while this does appear to be a fleeting winter weather event, it does not necessarily mean the market will revert to the conditions we have grown accustomed to over the past three years.
About the Chart of the Week
The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real time. Each week a Market Expert will post a chart, along with commentary, live on the front page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.
SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.
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