National outbound freight volumes are drying up as fast they came. Since the peak nine days ago, OTVI.USA has shed 12.5% to a current 10,974.47. In the same period preceding the peak, outbound tendered volumes rose nearly 11%. It is safe to say this peak is behind us. The panic-buying pull forward of demand for groceries and consumer packaged goods (CPG) is over.
Data from Placer.ai, a retail intelligence provider, shows that foot traffic to the nation’s largest packaged retailers (Walmart, Costco and Target) fell off considerably towards the end of March.
As we have noted over the past two weeks, we believe only 40% of truckload freight is safe from a lockdown environment including food, medical supplies and some CPG. It is possible the drop in foot traffic could be a lull in between grocery demand spikes. We believe some of the demand for CPG will be weaker due to the pull forward, but overall demand for grocery and packaged goods will be strong through the next few weeks.
If OTVI continues its descent at this pace, we would expect volumes to fall another 6% before our next publication. Volumes are still elevated above historical comparisons, but with consumer spending down 30%, we expect volumes to tumble for the month of April.
Just one of the 15 major freight markets FreightWaves tracks was positive on a week-over-week basis. The ratio of positive markets has plummeted compared to recent weeks and so has the absolute weekly percentage increases. The market with a gain in OTVI.USA was Atlanta (0.16%). On the downside, this week saw a decline in Cleveland (-21.46%), Fresno, California (-18.58%) and Laredo, Texas (-17.47%).
Tender rejections fall sharply this week
Much like OTVI, the outbound tender rejection index (OTRI) has also peaked and is rapidly slipping to the downside. OTRI is only four days off its peak, but it is exhibiting the same trend as OTVI – rejections have fallen 16.3% off the peak, and in the four days prior to the peak OTRI rose only 5%.
Capacity is still quite tight around the country, and OTRI remains higher than at any point in 2019. However, much like volumes, tender rejections will continue to plummet in April. With a majority of the country on lockdown and many industries at near total shutdown, there simply isn’t enough freight to keep capacity this tight for long.
For more information on the FreightWaves Freight Intel Group, please contact Kevin Hill at khill@freightwaves.com, Seth Holm at sholm@freightwaves.com or Andrew Cox at acox@freightwaves.com.
Check out the newest episode of the Freight Intel Group’s podcast here.
Noble1 suggests SMART truck drivers should UNITE & collectively cut out the middlemen from picking truck driver pockets ! UNITE , CONQUER , & YOU'LL PROSPER ! IMHO
Quote:
“Peak volumes are now in the rearview mirror”
It would be nice if we could state the same about the coronavirus infecting and spreading throughout North America !
Unfortunately this is not the case !
Recently I had stated that truck drivers were among the most at risk of contracting COVID-19 as well as spreading it . Apparently some appear to agree . Some clowns were arguing differently based on their hocus pocus belief that truckers are among those that are the most isolated !
Quote:
‘MAYDAY’: The largest organization of independent truck drivers is demanding that Trump provide masks, testing, and quarantine zones for truckers
“Meanwhile, truck drivers are at a greater risk than other Americans to get the coronavirus and to experience complications from it. ”
“Todd Spencer, the president and CEO of the Owner-Operator Independent Drivers Association, wrote in a letter dated April 3 that truck drivers are key to the nation’s supply chain and have been deemed “essential” workers, but they’re at more risk than ever as the coronavirus sweeps across the US.”
Spencer argued that this critical service could be at risk. “Once word spreads that drivers are testing positive, we could very well see a tremendous reduction in drivers willing to risk everything for the rest of us,” he wrote.”
End quote .
Be wise , be vigilant , stay safe, and self isolate !
In my humble opinion …………….