Snow storm keeps trucking across Northwest freight region (with forecast video)

Impact on freight

The Northwest freight region – consisting of Washington, Oregon and Idaho – has been fairly interesting to watch recently. Volumes began a steady increase in early March, mainly in response to the COVID-19 outbreak. Shipments of medical supplies and various household items spiked. However, volumes (OTVI.URNW) have been falling over the past week, based on the latest SONAR data from FreightWaves.

There’s not a whole lot of outbound freight in the region to begin with, except for the Seattle market. Despite this, and the fact that the snow storm has been in the forecast since before last weekend, outbound tender rejections (OTRI.URNW) remain elevated. However, from Sunday into Monday, rejections dropped. One might think that carriers would continue to reject loads because of the snow storm. But it’s possible that some carriers already had drivers positioned nearby and are taking a chance, trying to pick up freight wherever they can.

The outbound tender rejection index (OTRI) is the percentage of electronic, contracted loads offered by shippers that carriers turn down, and is a good measure of capacity and stability. Carriers reject loads either because they literally may be at full utilization and not have any excess capacity to transport more loads, or because they have more attractive alternatives available in the form of higher rates in the spot market or from another broker or shipper.

As a rough rule, a loose market (high capacity) is defined by tender rejections in the low- to mid-single-digit range, a balanced market by tender rejections in the high single digits, and a tight market by tender rejections above 10%. The Northwest region’s OTRI as of this morning is 10.5%, although individual markets within the region may be loose or balanced.

Have a great day! Please stay healthy and be careful out there!