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Holiday truckload demand stronger than in 2020

Truckload tender volumes 10% higher than last Christmas

Photo: Jim Allen - FreightWaves

Chart of the Week: Outbound Tender Volume Index – USA SONAR: OTVI.USA

After underperforming 2020 over Thanksgiving, the Outbound Tender Volume Index (OTVI) that measures the amount of electronic requests for truckload capacity shippers send to carriers has been averaging over 10% higher than the previous year since Dec. 22. This trend is a sign that shippers still have plenty of freight to move heading into the new year. 

The OTVI is an index with a base value of 10,000 based on the tender volumes occurring on March 1, 2018. It has spent most of the past year with values over 15,000, meaning that tender volumes have been consistently 50% higher than they were in early March of 2018. 

The OTVI is an index used to measure changes in truckload demand and strong directional shifts have a connection to upward or downward movement on trucking costs. While the current trend is declining, its position relative to last year is telling us this cycle is not over.  

Unlike the end of 2020, when tender volumes dropped quickly throughout December, there has been more of a slower-paced decline this year. Last year, it was apparent by looking at the OTVI that shippers were expecting transportation capacity to ease as it traditionally does after the winter holidays. 

In 2020, tender volumes fell 8% from Dec. 4 to 22. This year, the OTVI only dropped 4.3% over the same period. 

After December, the OTVI continued to fall coming out of the holidays, falling another 3% before trending lower into the middle of February. At that point, it appeared truckload demand was going to gradually return to something similar to a pre-pandemic pattern, but a catastrophic winter weather event along with unexpected consumer resilience reversed the course as tender volumes jumped 23% in eight days. 

Carrier networks were paralyzed as ice and record cold temperatures hit as far south as Houston the week of Valentine’s Day. Shipper operations were also impacted and that led to a domino effect of production and transportation disruptions that are still being felt today. 

This event combined with strong consumer demand for goods and industrial recovery pushed shippers back into panic mode as trucking capacity became as scarce as it was around the holidays at a very uncharacteristic time. 

The industrial sector was nearly fully recovered and consumer demand for goods was as strong as it ever has been as of November. Port congestion is significantly worse than it was at this point last year, which means shippers cannot assume order cycles will get better. 

There have been some improvements in labor since last year as companies have ended furloughs, but trucking employment levels are still not where they were prior to the pandemic era and demand is still well above 2019 levels. 

Shippers appear to be wary of letting their feet off the accelerators heading into the new year, even with concerns of demand eroding on the heels of rapid inflation. After a year of record demand, little has changed in terms of aggregate infrastructure. Inventory management strategies will have to adapt to what has become a very volatile environment.

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 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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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.