Daily Tip 07/29/2022: Outbound Tender Lead Times

Ashley McAvoyDaily Tips

Did you know? You can measure a shipper’s reaction to capacity changes with SONAR’s Outbound Tender Lead Times Index.

Each day we’ll send you a daily tip designed to guide you to becoming a SONAR expert. If you have any questions, please contact your Customer Success Representative or email the team at cs@freightwaves.com.

Outbound Tender Lead Times (OTLT) is a daily index that measures the length of time in days between a load being offered and the requested pickup date. For example, shipper A sends a load request on June 8th with a pickup date of June 10th. The load has a 2-day OTLT.  

In the HeatMap below, SONAR users can sort all 135 markets by the actual OTLT, numerical change or percentage change to see which markets have the longest or shortest tender lead times. 

Outbound Tender Lead Times in the HeatMap feature

Outbound Tender Lead Times – HeatMap view

Carriers: OTLT is a tool that can help carriers judge capacity issues in a market. Tight or loose capacity can affect a carrier’s rates out of a market. OTLT can also be a signal to carriers on when to book their next load. If a market has an extended OTLT, carriers might want to book their next load early to ensure their trucks keep moving.    

Brokers: Brokers can use OTLT to help judge capacity in both origin and destination markets. Since brokers are the middlemen between shippers and carriers, it is important to see how both are reacting to market conditions. Brokers can then adjust their rates based on how capacity is affecting shippers in a certain market.

Shippers: OTLT can help shippers see how they compare with other shippers in a market. By looking at the average OTLT in the market, they can decide if they need to adjust their OTLT for better performance.   

OTLT will help SONAR users understand a shipper’s reaction to current market conditions. When a market experiences changes in OTLT it can mean: 1) shippers are anticipating capacity issues, so they increase lead times to ensure capacity for their loads; 2) shippers have unexpected surging volumes, so the lead time decreases as shippers turn to the spot market for same-day, on-demand capacity; or 3) the market a shipper operates in becomes oversupplied with capacity, so the shipper reduces tender lead times, taking advantage of the downward trends in spot rates as carriers reduce their bids on loads.  

OTLT helps SONAR users understand market conditions from a shipper’s perspective. Are shippers experiencing tight or loose capacity issues? Capacity issues can lead to fluctuations in spot rates in a market, influencing changes by brokers, carriers and shippers on how they approach a market.      

OTLT can also be broken down by trailer type by adding a V for dry van (VOTLT), or an R for a refrigerated trailer (ROTLT).  

1) Click U.S. Map to view the outbound tender lead times at a high level to see how shippers are reacting to current market conditions. 

  • Markets that are shaded a darker blue indicate extended tender lead times.
  • Markets that are shaded a light blue or white indicate shorter tender lead times.

2) Click Chart to view the historical trends and changes in the outbound tender lead times.

  • Markets with extended tender lead times may signal that shippers are anticipating issues with capacity in a market.
  • Markets with short tender lead times may signal that a market is flush with capacity, and shippers are moving freight over to the spot market due to low carrier rates. 
  • Charts can also help users compare the OTLT in a market to the national average (OTLT.USA), or to other markets.

Pro Tip: Use OTLT in conjunction with OTRI to understand both shippers’ and carriers’ reactions to the current market conditions. 

If you have questions about outbound tender lead times, please contact us at cs@freightwaves.com. 

Happy Hauling,

FW Team