Freight volumes finished the week slightly lower as financial markets whipsawed back and forth on fears of an escalating trade war between the U.S. and China. The U.S. stock market began the week with a 3 percent drop, then recovered with three straight days of gains, before closing slightly down on Friday. The end result was the S&P 500 was little changed this week.
The freight markets, on the other hand, were business as usual. The first week of the month is usually light. Companies typically push out shipments in the last week of the month in order to boost revenue.
The first week of August was no different. Load tender volumes (OTVI.USA) were little changed, down 93 basis points (bps) for the week.
Tendered load volumes continue to outpace activity on a year-over-year basis now, up 158 bps from the first week in August 2018. Load volumes also continue to be well above the 60-day moving average.
While load volumes are improving, over-capacity continues to push down tender rejection rates (OTRI.USA) to new lows at 3.85 percent. This is a steep drop from levels a year ago when rejection rates were 17.92 percent.
“We anticipate load volumes to remain flat, with declining rates until at least the fourth quarter,” said Mike Fullam, Vice President of ReedTMS. “We’re keeping a close eye on trade disputes with China and even Mexico. This will be the key factor for how this holiday season will play out. Our approach is to continue to be aggressive with rates. We are going to pick our spots carefully though because we don’t want to downgrade service for either our carriers or our customers.”