Outbound tender volumes (OTVI.USA) rose 11.77% week-over-week. Nationally, outbound tender volumes rose 6.77% year-over-year this week. Month-over-month volumes are down 20.03%.
Volumes have predictably eased off of their peak season highs in typical seasonal fashion as January begins.
Thirteen of the 15 markets FreightWaves tracks were positive on a week-over-week basis. Markets with the largest gains in OTVI.USA were: Savannah, Georgia (45.55%); Fresno, California (24.60%); and Cleveland, Ohio (22.71%). The two markets that experienced week-over-week drops were Ontario (-2.83%) and Los Angeles, California (-1.19%).
National rejection rates pulling back but still double digits
The Outbound Tender Reject Index has slipped sequentially from its Christmas Day high of 14.25% to 10.05%. This total is still substantially higher than the 2019 average of 6.13%, but is likely to go lower as drivers get back on the road after the holidays. This last week was the first negative week-over-week change in rejections since early November.
From Christmas 2018 to the first week of February 2019, the OTRI halved to less than 7%. It is likely the same happens this year, but possibly to a lesser degree. It is also possible that OTRI exhibits positive year-over-year growth for the first time in more than a year within the next few weeks.
Despite the slip from the Christmas high, OTRI still remains above its 60-day moving average. We expect capacity to loosen up over the coming weeks and into the early summer. By Q3, we believe there are a few factors that may tighten capacity and put upward pressure on rates: first, the FMCSA Drug Clearinghouse will likely gut the industry of drivers; second, used truck prices have fallen through the floor – indiciating drivers may be looking for work elsewhere; and third, the new Class 8 truck orders were well below the replacement rate for all of 2019.
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