Tender volumes stable at a very high level 1,254 3 minutes read Photo: Jim Allen/FreightWaves
After the winter storm disruptions, freight tender volumes have stabilized and moved horizontally this week. The Outbound Tender Volume Index is up ~16% yoy when adjusting for the high level of rejected tenders. Yearly comps will soon become tougher given the 30% volume surge last March on the backs of consumer panic buying and hoarding of grocery and household staples.
We are entering the seasonal second-gear freight markets find toward the end of Q1. Not only does the warm weather bring about elevated consumer demand, but retailers have quarterly results to report, and lagging inventories are not applauded by Wall Street.
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Winter weather retightens domestic trucking capacity even as demand drops 4,666 4 minutes read
Chart of the Week: Outbound Tender Reject Index, Outbound Tender Volume Index – USA SONAR: OTVI.USA, OTRI.USA
The recent string of winter storms and cold weather that has gripped the central U.S. disrupted shipping across the country in a way that is somewhat counterintuitive volumes fell while capacity tightened.
The Outbound Tender Volume Index (OTVI) a measure of shipper requests for truckload capacity fell over 6% last week while the Outbound Tender Rejection Index (OTRI) the rate at which these requests are rejected by carriers jumped to near-peak-season levels in mid-February. Declining carrier compliance is tightly correlated with increasing shipping costs. These events are extending the effects of the shipping boom that resulted from increased consumer demand for goods last year.
We believe the winter storms tip the scales in carriers’ favor ever so slightly. Freight markets were already imbalanced with seemingly insatiable demand overwhelming already strained carriers, and it's only February.