Tender rejections: Absolute levels positive for carriers, momentum positive for shippers
The holiday break is over and done, and drivers have reentered the market. This is evidenced by declining rejection rates on flat volume. Tender rejections are following a seasonal pattern downward after the holidays, albeit at a much higher level. Currently, the Outbound Tender Reject Index sits at 23.39%, its lowest level since mid-August just before the last leg up in volumes. OTRI has fallen steadily since the Christmas holiday when it peaked at 28.5%. We had suspected OTRI may push through previous all-time highs and possibly reach 30%, but it never quite made it.
The
FreightWaves
SONAR to analyze the market and estimate the negotiating power for rates between shippers and carriers.
Outbound tenders have declined materially since Thanksgiving. Trucking capacity has become easier to secure, yet spot rates inched higher over the past week. We believe retailer replenishment strategy could be slowing the freight demand. All being said, we still believe the market can take one last leg up into the new year.
The Pricing Power Index is based on the following indicators:
Load volumes: Absolute levels positive for carriers, momentum neutral
The Outbound Tender Volume Index has normalized after its holiday disruption and now sits at 15,266. OTVI has taken a typical seasonal path downward, falling nearly 11% since Turkey Day. This is a more pronounced decline than in the previous two years, but volumes are at such an extraordinary level, this is not concerning.