SONAR Pricing Power Index slips to 70: intermodal contracts at $1.61/mile, spot $3.52

The Analysis

SONAR's Pricing Power Index printed 70 for the week of 12 October 2026, the fourth weekly fall in a row and still thirty points clear of the 50 line where the market is neutral, so carriers are the ones setting terms. The number I keep coming back to is not the index itself, it is intermodal contract rates at $1.61 a mile, down from $1.68.

Let me put the scoreboard on the table before I start interpreting anything. FreightWaves SONAR's Pricing Power Index came in at 70 for the week of 12 October 2026, and that is the fourth consecutive weekly decline. The neutral line on that index is 50, so at 70 carriers are still the ones setting terms, not the shippers paying the bill. The components behind the move are these: intermodal contract rates fell to $1.61 a mile from $1.68 and were the single biggest drag at roughly 0.9 index points; ocean import bookings fell about 2 percent; national tender rejections held at 13.85 percent, which sits in the 83rd percentile of the five-year range; the average spot rate eased to $3.52 a mile from $3.56 and is still in the 95th percentile; and rail volume ran at 35,575 loaded containers, the 99th percentile. Five numbers, and they are not all pointing the same way.

If you only read the headline you would conclude the market is loosening and you should sit on your hands until rates come to you. I do not read it that way, and the reason is simple. A falling index tells you about direction. A level of 70 tells you about who still holds the leverage. Those are two different questions, and the second one is the one that decides whether your freight moves. I have sat on the other side of this desk through enough cycles to know where the shipper who mistakes direction for level ends up: he waits for another two points of softness, the renewal window closes, the freight has to move on the first of the month, and he signs whatever the carrier puts in front of him.

The piece I keep coming back to is intermodal. Contract rates went from $1.68 a mile to $1.61, seven cents, which is a little over 4 percent, and SONAR attributes about 0.9 index points of the decline to that one line. Seven cents a mile sounds like nothing until you put it against a real lane. Assume you move intermodal out of Los Angeles to Chicago, roughly 2,000 miles, and assume you run 40 containers a month on that lane. Seven cents a mile is $140 a container, and 40 containers is $5,600 a month, call it $67,000 a year. That is real money and it belongs in your budget.

Now hold that against the exposure sitting on the other side of the ledger. Tender rejections are at 13.85 percent. Assume you tender 100 truckloads a month on contract, so roughly 14 of them come back to you. Assume your contract rate on those lanes is $2.20 a mile and your average length of haul is 1,200 miles, so a contracted move costs you about $2,640. The same load on the spot market at $3.52 a mile costs about $4,224. The gap is roughly $1,584 a load. Fourteen rejected loads at that gap is about $22,000 a month. So the seven cents on intermodal buys you $5,600 and the rejections cost you $22,000. I know which one I am spending my week on.

And 13.85 percent is not a data glitch. At that level it sits in the 83rd percentile of the five-year range, which means that in five years of weekly readings, only about one week in six has had carriers turning back more contracted freight than they are turning back right now. That is what it looks like when a carrier would rather reposition a truck or run it light than take your contracted rate. It also tells you how to read the spot quote you are about to get: in a market where one tender in seven falls out to the open market, the person quoting you knows you need the truck today.

So when the average spot rate eases from $3.56 to $3.52, I do not hear cheap. Four cents on $3.52 is about 1 percent, and this is still the 95th percentile. Ninety-five out of a hundred weeks in the last five years had a lower spot rate than the one you would pay this morning. The decline is real and I will take it, but the honest reading is that spot is expensive and slightly less expensive than it was seven days ago. If you build a 2027 budget off $3.52 because the number went down, you are building a budget on the ninety-fifth percentile of the last five years. I have had to unwind that conversation with a CFO more than once, and it is not a conversation you enjoy.

Rail is the number that makes me sit up. 35,575 loaded containers is the 99th percentile, which is essentially the ceiling of the five-year range; you cannot get much fuller than that. Think about what a full rail network does to the things that actually cost you money. Ramps get congested. Dwell drifts out by a day and then by two. Chassis get scarce at exactly the ramp you use. Free time, the number of days you get before storage starts billing, gets consumed by the terminal rather than by your drayage provider. None of that appears in a rate per mile, and all of it appears in your monthly accrual and in the phone call from a customer who did not get his container.

Ocean import bookings falling about 2 percent fits the same picture, and I want to say clearly what it does and does not tell you. A 2 percent decline is softening at the margin, not a collapse. What it does say is that the inbound flow feeding your intermodal and dray legs is easing slightly, and that is part of why intermodal contract rates have room to come off. What it does not say is that ocean capacity is about to get cheap. Carriers watch their own booking curves as closely as you watch your order book, and the standard response to a soft booking week is to manage capacity rather than to cut rates. I would not build a plan that assumes a 2 percent booking decline turns into a rate war.

Here is how I reconcile soft prices with a full rail network and high rejections, because this decides what you do next. The softness shows up where contracts get repriced and where demand is marginally lighter, which is intermodal contract rates and ocean bookings. The tightness shows up where physical capacity is measured, which is tender rejections and rail container counts. Both can be true at the same time. Carriers are defending rate by controlling how much equipment they put in front of you rather than by holding a published number, and that is a much harder thing to negotiate against than a tariff. It is also why I do not think a 70 becomes a shipper's market simply because it fell for four weeks.

Timing is the part people get wrong. We are in the second week of October. The fourth-quarter push is already running, holiday embargoes land through the back half of November and December, and the 2027 bid cycle for most mid-size shippers opens somewhere between early January and early March depending on the carrier. If you want $1.61 to be your 2027 intermodal rate, the work happens now, not in January. I would have my lane list, my volume commitments and my historical tender acceptance out to my intermodal providers before the end of October, and I would ask them to price against a committed volume band rather than a flat annual number.

Why a volume band? Because the reason carriers still hold pricing power is that they do not trust your forecast. Commit to a flat 40 containers a month and ship 28, and you have handed them a repricing trigger for free. Commit to a band, say 30 to 45 containers a month with the rate holding anywhere inside it and a defined repricing conversation only if you fall outside it for two consecutive months, and you have bought certainty inside the range you actually operate in. I have signed both versions of that contract, and the band version is the one that survives a soft quarter.

On the truckload side the work is boring, and the boring work is what pays. Pull your routing guide and count how many carriers you actually have at each origin. With rejections at 13.85 percent, a lane with two carriers is a lane where you are one rejection away from the spot market. I want three carriers deep on every lane that moves more than ten loads a month, and I want the third one to have actually taken a load from me in the last quarter rather than being a name in a file. A carrier who has never moved your freight will quote you the 95th percentile spot rate, because that is what the market pays. A carrier who has moved it will quote something closer to reality, because he wants the next one.

Then decide what your spot budget is and write it down. Not a hope, a number. If 14 percent of your loads are going to spot at roughly a $1,500 premium each, that is a line in your monthly freight accrual, and if it is not there your controller will find it in February and ask what happened. I would rather tell him in October. Assume 100 loads a month and the gap where it is now: that is about $22,000 a month of unbudgeted exposure, roughly $264,000 a year. Half of fixing that is knowing the number. The other half is cutting the rejection rate, which starts with the routing guide depth I just described and with being straight with your carriers about volumes and appointment times.

There are alternatives and each one carries a price. Moving freight off intermodal and onto over-the-road buys transit certainty and costs a large multiple of the intermodal rate, and I want to be honest about that comparison: $1.61 a mile for an intermodal container and $3.52 a mile for a truckload are not the same unit even though they sound like it, and the accessorials around each are different, so do not do arithmetic on the gap. Get both quoted on your own lane, same origin, same destination, same equipment, then compare door to door. The directional point still holds, over-the-road costs multiples of intermodal on a long-haul lane, and you use it for the loads with a date attached rather than for the whole book.

Shifting the ocean leg is the other lever, and the 2 percent booking decline gives you a little room to talk. What I would not do is spend that softness on cancellations. With rail at the 99th percentile and your ramp already tight, a container that lands two weeks late because you moved it to a cheaper sailing costs you dwell, storage and possibly a stockout, and that bill is bigger than the freight you saved. The version I like is to keep the sailing pattern stable and use the softness to negotiate free time and detention terms instead of base rate. Free time at the ramp is worth real money when the network is this full, and carriers will trade it far more readily than they will trade line haul.

The traps are mostly boring paperwork, which is exactly why they cost so much. Watch the free time and the detention and demurrage clock at the ramp; with rail volume at the 99th percentile, terminal congestion eats your free days and nobody sends you a warning when it happens. Watch how your contract defines a rejection and what the fallback rate is, because some routing guides convert a rejected tender straight into a spot move and others have a contracted fallback tier, and that difference is the entire $1,584 a load I calculated earlier. Watch the fuel surcharge basis, since a line haul that comes down seven cents and a fuel table that moves against you can net to zero. Watch whether the intermodal rate you were quoted is all-in or whether ramp-to-door drayage sits outside it, because on a congested ramp the drayage is where the money goes.

One more thing about the index itself, because people misuse it. The Pricing Power Index is a composite. It fell to 70 because specific inputs softened, and the 0.9 points from intermodal contract rates was the largest single contribution. That does not mean every lane in your network got cheaper. It means the average of those inputs moved. Your Los Angeles to Chicago intermodal lane may well have come off while your Midwest short-haul truckload lane did not move at all. Do not walk into a carrier negotiation with a composite index decline as evidence that your rates should fall. Walk in with your own lane data and your own tender acceptance history, and negotiate specific lanes.

Four straight declines deserves a paragraph of its own, because a run like that changes behaviour on both sides of the desk. Carrier sales teams read the same index you do. After four down weeks their internal guidance shifts from defending rate to protecting volume, and that is precisely when a shipper with real volume and clean tender data can win a concession he could not have won in August. It does not last. In my experience the gap between carriers admitting the market is soft and carriers managing capacity back into balance runs somewhere between six and ten weeks. If the index has already fallen for four weeks, you may be standing in the middle of that window. That is why the renewal work belongs in October and not after the holidays.

Most of what I have written is about the inbound side, which is where the data points, but there is an outbound version if you export as well. Rail container counts at the 99th percentile mean equipment and ramp slots are being consumed on the loaded inbound side, and your export bookings compete for the same boxes and the same appointments. Ocean import bookings being down roughly 2 percent does not automatically release export equipment. Where you have export commitments with a date on them, book further out than you did over the summer and get the equipment commitment in writing rather than assuming the box will be sitting there. I once watched an exporter miss a sailing because the container he had been promised went to an inbound load that paid better, and there is no claims process for that conversation.

There is a commercial piece too, and it is the one everybody skips. Your customer contracts carry delivery dates, and your freight cost is moving in two directions at once: intermodal is cheaper by seven cents a mile while every rejected tender costs you roughly $1,584. If you quoted a delivered price back in June, you are absorbing that gap today, and if you quoted a delivery date, a ramp running at the 99th percentile threatens the date rather than the price. I would go through my open quotes this month and find the ones where two days of dwell drift breaks a commitment. Those are the shipments where I pay for over-the-road and stop feeling bad about it.

What I am watching next Monday is two numbers together, not the index. If intermodal contract rates fall again while rail volume stays at the 99th percentile, that is carriers cutting price into a full network, and I would read it as a short window and lock whatever I can. If rejections push above 14 percent while spot holds at the 95th percentile, the softness is over, the fourth-quarter squeeze is real, and I am on the phone to my carriers that morning rather than at month end. Four straight declines is a trend worth respecting. Seventy is a level worth respecting more. I have been doing this long enough to know which one sends the invoice.

↑ Back to the key points

— By Leo