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Has the Freight Recession ended?

Photo: Jim Allen - FreightWaves

Chart of the Week: Outbound Tender Volume Index — USA (SONAROTVI.USA)

After approximately nine months of flat or contracting volumes and rates, the freight market has started to change course. The national Outbound Tender Volume Index (OTVI) just had its longest stretch of positive growth this year at 31 days of year-over-year growth. During this stretch, which started on July 24, volumes averaged 2.9% higher than the same period in 2018. Prior to this, the longest consecutive period of positive YoY comps was an 11-day period preceding the May 10 Chinese tariff implementation, where volumes averaged a marginal 0.7% higher.

Up to that point, it was unclear whether or not 2018 was just an over-heated year that produced tougher comps or the freight markets were really in a substantial downturn. From March 1 till May 9, volumes were averaging 1.3% under 2018. From May 10 till July 23, volumes averaged over 4% under the previous year. In other words, the spring was like rolling down a grassy hill, where the summer season was like falling off a cliff.

The period from March through July is generally considered the peak of construction and manufacturing in the economy. Agriculture and beverages are also major contributors to surging freight volumes during this time. The agricultural sector kept things interesting with above average rains in California making harvests difficult, but this segment of the transportation market (non-grain produce) is small in comparison to the durable goods that drive most of the freight market’s volumes.


Many macroeconomic figures have supported an industrial slumping over the past several months. A weakening manufacturing sector, where annual growth has been mostly negative since February, and a lackluster new housing market has kept construction underwhelming.

Manufacturing growth has been stunted in the first half of 2019. (Image: SONAR – IPROG.MFTG)

There are those that would argue still that we are just reeling from a booming 2018, where growth was overheated due to things such as tax incentives and recovery from natural disasters. Looking at the definition of a recession—two consecutive quarters of negative growth—there is no mention of whether the contraction came after an anomalously robust period.

For trucking, the supply side increased to meet demand with more trucks entering the market on the heels of record new class 8 orders in 2018. With less freight to move, these trucks are nothing but additional cost, diluting the market and keeping rates down by increasing the competition.

Spot market rates have not crossed above 2018 levels yet, but it will take more time to see rates cross above previous year as the supply side of the equation is still elevated. The good news for carriers is the fact the 3rd and 4th quarters are driven more heavily by retail demand and increasing service requirements, which has been a strong point of the economy unlike manufacturing. The pull forward of 2018 has also fizzled as shippers have adjusted their supply chains, reducing inventory levels.


Pending further geopolitical other other unforeseen events, there is reason for optimism in trucking for the first time in months, and the data shows it.

About the Chart of the Week

The FreightWaves Chart of the Week is a chart selection from SONAR that provides an interesting data point to describe the state of the freight markets. A chart is chosen from thousands of potential charts on SONAR to help participants visualize the freight market in real-time. Each week a Market Expert will post a chart, along with commentary live on the front-page. After that, the Chart of the Week will be archived on FreightWaves.com for future reference.

SONAR aggregates data from hundreds of sources, presenting the data in charts and maps and providing commentary on what freight market experts want to know about the industry in real time.

The FreightWaves data science and product teams are releasing new data sets each week and enhancing the client experience.

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14 Comments

  1. Rita Kemp

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  2. Jesse

    Thanks to Obama who opened the floodgates to NAFTA anybody with a driver’s license from any FN country who think’s they know how to drive can come here and work here as a truck driver very cheap . All they say is that they get in their nationality money and that makes it legal for them to drive here .

    1. art

      Presidents are puppets.
      Uncontrolled immigration will never stop. Businesses (the rich) need cheap labor regardless if democrats or republicans (the rich) are in control.

      1. Noble1

        Quote:
        ” Businesses (the rich) need cheap labor regardless if democrats or republicans (the rich) are in control.”

        The only reason for which the capitalist class(Bourgeoisie) rule is simply due to the proletariats allowing themselves to be ruled by them .

        According to my logic , if one class outnumbers the other then the many should rule the few rather than the other way around as it is today .

        If every labourer(proletariat) in transportation united as one , I can guarantee that no Bourgeoisie would rule them .

        And by the way , “business” simply needs to be innovative in order to cut costs and increase profits . Major carriers understood that cheap labour is more troublesome than skilled labour . That’s why they lobbied for better training programs . Unfortunately at the tax payers expense .

        And for those talking about other cultures , some of those immigrants who created a trucking transportation business here , pay better than our own on payroll ! .80 cents per mile running flatbed as an employee !!! I don’t see too many of our kind(Caucasians) offering that sort of wage ……….

        Judge by “mentality” , not by the color of one’s skin or race .

        In my humble opinion …………….

        1. Cindy

          That’s why we had unions…But the government made sure to seed them with corrupt puppets who worked for crime bosses…then one day the government decided they didn’t like the competition…started a class war with the very people they utilized to take control…the rich has always used slave labor, but this time the Democrats have decided the tax payers will subsidize it on a humanitarian basis. It’s not like they care for these people. It’s how they line their pockets and because foreigners have no clue what we built, what we stood and fought for that the workers get a living wage and a quality of life…we were the greatest country in the world. Decent wages, full benefits, paid vacations and a retirement plan that could be depended on…and these companies still turned a tremendous profit. Look at the Koch Brothers, Amazon’s Jeff Bezo and the Waltons of Wal-Mart fame…They could pay their employees all that and more and still be the ultra rich. It is pure ego. But you drivers still run into Wal-Mart like big kids to do your shopping. Tell your families to quit shopping there. Stop delivering these people’s freight. If you are forced to then always be late…and disrespect them like they disrespect every honest person who is trying to support their families. Too many wimps in this world…and the rest are just clueless.

          1. Noble1

            Quote:
            “disrespect them like they disrespect every honest person who is trying to support their families. ”

            Remember the quote , “an eye for an eye makes the whole world blind ” ?

            Therefor be better than that . Outsmart them . Be a friend and make a friend . However, I concur with your statement to stop shopping there if they behave unethically .

            Vote with your consumer dollars rather than descending to their level . However, until you manage to find a way to replace those unethical business mentalities , people will continue to shop there due to low costs .

            If consumers aren’t “united” then why would they penalize themselves by not shopping where it costs less , according to their perspective ?

            Personally I chose to boycott Walmart due to their lack of consumer service especially since they began implementing automatic cash registers .

            As we head into the future costs are increasing while the quality of consumer service is decreasing . Why should people pay for a bag to carry out the goods they bought from a store ? Why force consumers to no longer want a plastic bag through corrupt persuasive propaganda ? Simply offer bags that biodegrade within a shorter period of time(5 to 11 days) . They exist .

            People are unfortunately to easy to manipulate . They don’t question and most don’t reason . They haven’t learned from the past . History is our best teacher . And as long as the people remain divided due to primitive manipulating tactics then they are to blame . They need to wake up and question .

            I observe . I question . I reason . I choose . I act .

            It’s not as difficult as one may think to outsmart the 1% . And believe me they have a lot more to lose than the 99% . Most of the 1% are simply educated clowns . Being educated and being smart are two very different things . Education doesn’t lead to intelligence . A lot of uneducated people are smart .

            A simple example:

            In “school” they educated us into believing that in order to be “healthy” we humans had to consume foods from certain “food” groups . Among those “food” groups they “educated” us to believe that “meat” was a human “food” and that humans needs to consume it in order to obtain protein .

            However, if one were to simply observe the animal from which the “meat” was derived in the “food’ group , example Beef, and look at what that animal consumed in order to obtain protein , we come to the conclusion that it didn’t obtain protein from consuming an animal .

            So we question . Where did the beef obtain protein from ? through observation we realize it obtained it from a combination of amino acids that are found in plants and grains . Thus its body created the protein for its species from ingested amino acids from plants and grains , not from consuming meat .

            So through “education” we have been tricked . A smart person would realize that , not an “educated” one . The best way to trick someone is to combine a little truth to many lies . Example , 1+1=2 , 2×2=4 , and you need to eat meat in order to obtain protein , and if you’re a nice child(OBEY) “Santa Clause” will bring you gifts while “God” will be happy with you and allow you into paradise . And if you don’t do as you’re told “the devil” will harm you and you won’t get any cake .

            Now since we know that we’ve been tricked as children by adults , are we so naïve to believe that this will change once we the children grow up into adults ? We become tricksters ourselves . We trick ourselves and we trick others .
            All the 1% really are , is a bunch of tricksters . That’s what they have been taught , it pays , and so they became . The 99% are the “tricked” or the deceived .

            The question is : Can we manage and prosper without “tricking & deceiving ” one another ?

            Of course we can . So what are we waiting for ? Let’s start uniting , really uniting and OBSERVE , QUESTION , REASON , CHOOSE , and ACT !

            In my humble opinion ………………

          2. Noble1

            Number 1-Concerning Unions , I agree . Therefore rather than “joining” one , create your own .

            Number 2-
            Money aka a medium of exchange . Who does this medium of exchange belong to ? Who creates it ? fiat currency belongs to the name that it bares . Who “manipulates” it ? Any monetary medium of exchange is manipulated .

            So your wealth generally diminishes either through devaluing your purchasing power and or through taxing your gains and spending .

            However , the 1% created a game . And they were dumb enough to educate people to learn about it in the hopes of persuading them to serve them . And it worked !

            This game of theirs is the backbone to their advantage and wealth increase . STOCK EXCHANGES & BANKS !

            If you learn about this game it gives you an opportunity to increase your wealth . Without this “game” the 1% would no longer have an advantage . Nor would they have an advantage if the 99% understood this game ,united” and competed against the 1% .

            Use their game to beat them at their own game !

            Let’s assume that out of the 3 million or so truck drivers in the United States , only 25,000 united to start their own ethical “union” . And those 25,000 drivers decided to collectively withdraw all their funds from their banks and go to one particular bank until they created their own bank .

            Do you not think that these 25,000 drivers along with their loans and capital would not have negotiating power to reduce their fees and rates as a large group by offering to bring ALL their business to one particular bank and or insurance company ?

            Of course they would . You start small and you snowball from there .

            Reducing your costs increases your gains . So first as you attempt to unite , you focus on finding ways to reduce your costs(expenses) which translates to more money in your pocket . You talk about this among yourselves . You find smart legal ways to outsmart your competition(the 1%) by using your competition(the 1%) and beating them at their own game .

            And you increase in numbers so does your negotiating power .

            As you increase in numbers(members) you create your own bank . Now it becomes interesting and a whole different ball game . Now you’re in a position to really level the playing field and compete with the 1% .

            Your Bank obviously creates an insurance division , a discount brokerage division ,and a hedge fund etc . Are you getting an idea of where this can lead ? I hear people talking about the “Rothschild’s” . I ask those same people if they sent their children to learn about finance , wealth management, and banking . Most answer no . Rather than judge the “Rothschild’s” , learn from them . THEY ARE BANKERS ! They hire educated people , not necessarily the smartest, and that’s why they get caught in unethical dealings from time to time . But they hire well educated people in their line of business !

            Anyone can do it ! Any clown can unite enough people to start a freaking bank and trade the markets , anyone ! Not everyone may come up with the idea and structure it well and behave ethically though .

            If you’re fed up of being used and abused then what are you waiting for to create a change for yourselves ? An idea ? I just gave you one !

            Start talking to yourselves and acting as a friend and make a friend . Camaraderie was once the best thing about being a trucker . Where has this gone ??? It’s nearly extinct ! REVIVE IT ! Be different ! Create this bond and don’t compete among yourselves . Help one another prosper by uniting and competing with the one’s that want to prosper off of your backs unethically !

            And if the “Walmart’s” of the world need to be replaced then find an ethical way and create it , and then compete with Walmart by improving what they do well and by doing better at what they are not good at !

            All it takes is to put yourselves on the same playing field level to make a change . Tons of hedge funds own department stores(retail) etc.

            Your industry moves 70% to 90% of goods ! And you complain about the 1% controlling you ??? YOU HAVE MORE CONTROL ON THEM THAN YOU REALIZE ! But you’re sleeping at the helm !

            Wake up my friends , WAKE UP !

            in my humble opinion ………………..

  3. Noble1

    I had to go and check something that I will share with you based on his reasoning at 4:22 into the video . He strikes me as a clown so I went to check Walmart’s second quarter earnings in August 2018 to confirm my belief and to compare with his lack of freight chart above in August 2018 compared to the supposed reason for the current increase he’s claiming in August 2019 .

    Here is the title :
    Quote:
    “Walmart shares soar 9% as earnings top expectations, boosted by 40% US e-commerce sales growth”

    “Walmart on Thursday reported quarterly earnings and sales that topped analysts’ expectations, as more shoppers flocked to its stores and spent more per trip, and e-commerce sales ticked higher than previous quarters.

    The retailer said it had the strongest growth in more than a decade at those stores open for at least 12 months, thanks to robust sales in its grocery and apparel departments, both of which Walmart has poured money into to compete with the likes of Amazon and Kroger.”

    https://www.cnbc.com/2018/08/16/walmart-earnings-q2-2018.html

    Ok let’s now check Target in August 2018 :

    Quote:
    “Unprecedented 6.4 percent traffic growth drives comparable sales growth of 6.5 percent
    The Company now expects higher full-year comparable sales and EPS
    Traffic growth of 6.4 percent is by far the strongest since the Company began reporting traffic in 2008.
    Comparable sales increased 6.5 percent, the best comp at Target in 13 years.
    • Comparable store sales grew 4.9 percent.
    • Comparable digital sales grew 41 percent, on top of 32 percent growth a year ago.”

    ““We are extremely pleased with Target’s second quarter results, which demonstrate our guests’ excitement for the enhanced and differentiated shopping experience we’re building. For the second consecutive quarter, traffic growth is better than we’ve seen in well over 10 years, driving 6.5 percent comp growth – Target’s best in 13 years,” said Brian Cornell, chairman and chief executive officer of Target Corporation.”

    https://corporate.target.com/press/releases/2018/08/target-reports-second-quarter-2018-earnings

    This “clearly” demonstrates that the supposed reason the guy in the video above is giving for the current supposed freight increase in August 2019 compared to August 2018’s decrease is “absolute nonsense” .

    In my humble opinion …………..

  4. Noble1

    Concerning Retail :

    Perhaps one should look at the DOW JONES U.S. GENERAL RETAILERS INDEX in an attempt to get a clearer picture ,rather than get all excited on a simple few retail components which reported good numbers based on consumers trading down to lower priced retailers to save money during an economic contraction(early recession) .

    And since the Consumer Confidence Index(CCI) is widely regarded as the most accurate leading economic indicator for the United States economy , perhaps one should not neglect it .

    I don’t share his “enthusiasm” .

    In my humble opinion …………..

    https://tradingeconomics.com/united-states/consumer-confidence

  5. Elvis Durant

    Says WHO…..??? DONT believe those INDICES or Graphs algorithms…….. whoever wrote this article should be on the trucker/carrier of the ballgame and then write the article……This recession is going into extra innings and dont expect any improvements until AT LEAST 2021! Hope some major national carriers go under!

    1. art

      The sweatshop 1099 carriers are killing this industry.

      Thanks Punjabs, Mexico, and ex-Soviets for racing to the bottem.
      As long as the boss got their bottem shelf Mercedes C, business must be booming!

Comments are closed.

Zach Strickland, FW Market Expert & Market Analyst

Zach Strickland, the “Sultan of SONAR,” curates the weekly market update. Zach is also one of FreightWaves’ Market Experts. With a degree in Finance, Strickland spent the early part of his career in banking before transitioning to transportation in various roles and segments, such as truckload and LTL. He has over 13 years of transportation experience, specializing in data, pricing, and analytics.