It Likely Will Not Hold Into January, But OTRI Is Above 10% For The First Time All Year

The outbound tender volume index fell slightly this week to 9,977.00. Yearly comparables are still rosy – up over 8%. Last year, in the weeks after Thanksgiving and Black Friday, OTVI tumbled sequentially much faster than this year. We believe there are a few factors holding tender volumes steady: Thanksgiving fell on the latest possible day, leaving less time for shippers to get inventory off the shelves; and there may be a pull-through of goods from Asia due to Chinese New Year being earlier than usual this year. 

SONAR: OTVI.USA

Larry Mullne, Logistics Manager at Allied Alloys, a full-service scrap metal and metals management company with a private fleet and a brokerage gave FreightWaves insight into the company's pre-holiday operations. On the shipper side, he said, "The end of the year is crazy as we try to get as much inventory out before the end of the year to minimize taxes. We've been able to keep pricing stable because of relationships with preferred carriers." Allied Alloys is based in Houston, one of the 15 markets FreightWaves follows each week. Houston was one of a handful of markets that increased volumes – Houston was up over 5% this week. Leading the way to the upside was Indianapolis, up 11.23%. Fresno, Memphis and Savannah led the decline, down 11.37%, 12.66% and 25.46% respectively. 

Although it likely will not last into January, OTRI is above 10%

The Outbound Tender Rejection Index accelerated again this week, now sitting at 11.32% and poised to go higher. OTRI has nearly doubled in the past month and now sits comfortably above its 60-day moving average by 70%. Regarding Allied carrier operations, Mullne confirms the narrative, they have been running at full-capacity and have more freight than they can handle. Allied's goal this week has been to get drivers as close to home as possible so they can spend the holidays with their families. Mullne also said spot rates have jumped between 8% to 35% in the past couple weeks. 

There is a strong possibility OTRI crosses over into positive yearly comparable space in the coming weeks. The index was cut in half from Christmas to the end of January last year. The same is likely this year as the market stabilizes after the peak holiday season.

SONAR: OTRI.USA

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