Market Overview

Freight Volumes Go Negative For First Time Since July As Tough Comps Reassert

Freight Volumes Go Negative For First Time Since July As Tough Comps Reassert

Outbound tender volumes (OTVI.USA) fell by 2.21% year-over-year this week, and now sit well off the year-to-date high of 6.78% from early October. Volumes have been in a consistent downtrend for the last several weeks. Most importantly, this week's volumes negative results break a nearly three-month "winning streak" of positive volumes dating back to late July, when OTVI first crossed over to positive on July 24. 

Nationally, outbound tender volumes fell 2.21% year-over-year this week. Month-over-month volumes are tracking down 3.85%, while week-over-week volumes are down 2.21%. As we enter the heart of peak season, it seems fair to now question if we are going to actually have a peak season at all. This is a stark reversal from a month ago when things were looking up, but this can be a volatile index so all is not lost yet.

On a market-by-market basis, seven of the 15 major markets FreightWaves tracks were positive on a week-over-week basis. On the upside, Fresno led the way, up 13.1%, followed by Indianapopolis, up 6.16% and Miami, up 5.70%. On the downside, the worst markets week-over-week included Ontario, California (down 21.73%), Los Angeles (down 14.67%) and Seattle (down 6.00%).



National rejection rates fall this week

National tender rejections now sit at 5.08%. The tender rejection story has been much slower to develop, likely a reflection of stubbornly high capacity in the market. This week brought negative news on this front with rejections falling 38 basis points (bps) week-over-week. 

OTRI.USA briefly broke above the 6% level for the first time since March back on September 17, but has since taken a noticeable step back. On a week-over-week basis, OTRI.USA fell by 38 bps. Month-over-month, it is up 8 bps, while year-over-year it is down 775 bps compared to 12.83% at this time last year. On a trending basis, OTRI.USA looks okay but not great, having risen in nine out of the last 13 weeks with tender rejections rising off of the 3.75% bottom experienced in mid-August. National tender rejections are 2.36% below their 60-day moving average.

Year-over-year comparables for national rejection rates are still extraordinarily difficult due to the daunting 2018 numbers in which rejections never fell below double digits. As a result, on a year-over-year percentage basis, OTRI.USA is down 60%. As can be seen in the chart below, comparisons do not start to ease until the January and February timeframe in 2020.


Image Sourced from Pixabay


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