Beware the false spring
Even as carriers’ pricing power deteriorated, freight demand was consistently robust throughout February.
Even as carriers’ pricing power deteriorated, freight demand was consistently robust throughout February.
The early stages of this recovery are characterized by a rebalancing market, a return to normalcy after a four-year roller coaster of volatility.
The sustained imbalance between supply and demand has yet to be corrected, such that only an unprecedented tidal wave of demand could satisfy the current amount of capacity in the national freight economy.
Spot rates did eventually see a boost at the start of the new year, albeit one that was unable to meet our prior forecasts.
Tender volumes began to outpace 2020 earlier this week and are now marching toward favorable comparisons with 2021.
Volumes are leveling out at the start of December, delaying the seasonal dip that ordinarily occurs at this time of the year.
Tender volumes were outpacing 2022 levels before the holiday and came within spitting distance of 2020 — freight demand’s second-best year on record.
This week, freight markets underwent a surprising rally that saw a wave of volumes sweep across the country.
Domestic manufacturers fail to inspire optimism, since they foresee major headwinds on output in the first half of 2024.
The upcoming months are littered with major holidays during which carriers can leverage seasonal constraints on capacity for higher spot rates.
Outside of the holiday rush periods, the fundamental lack of freight demand will continue to expose the lingering overcapacity in the market.
Given the surplus of available capacity, shippers are more confident in switching to “just-in-time” freight strategies as consumer resilience remains an open question.
By next week, it is likely that actual freight flow will have finally risen on a yearly basis for the first time since May 2022.
Consumer demand during the holiday season is expected to be relatively soft, which should temper expectations for a red-hot peak season in truckload markets.
Perhaps the most pressing question for both freight markets and the broader economy is how the consumer will fare in the coming months.
Rejection rates gathered some promising momentum in the run-up to Labor Day, though these gains are slowly being lost.
After a none-too-brief break, the Pricing Power Index is resuming its regular Friday schedule.
Weekly NTI Update
Weekly NTI Update
Weekly NTI Update
Weekly NTI Update
Weekly NTI Update
NTI works to provide carriers with actionable data and benchmarking studies, enabling them to make informed decisions about their own compensation packages.
Against significant odds, the Federal Reserve might realize its once-unlikely goal of a “soft landing” — that is, taming inflation without also triggering a recession.
Weekly NTI Update
Freight volumes continue to trend sideways, which is a positive sign overall as the 15th of July traditionally marks a time for slowing demand in the freight market.
Weekly NTI Update
Demand from retail shippers is historically quiet in the period from now until August, after which retailers restock their shelves for the back-to-school season.
Weekly NTI Update
Demand from retail shippers is historically quiet in the period from now until August, after which retailers restock their shelves for the back-to-school season.
Weekly NTI Update
Maritime’s peak season — which typically ramps up in August and lasts throughout October — is expected by retailers and supply chain professionals to be weaker than it has been in previous years.
Weekly NTI Update
Weekly NTI Update
Tender rejections have yet to return to mid-May’s all-time low, but their softness could persist in a trough for the next two quarters.
Weekly NTI Update
One last round of bad news to cap this week: China and the U.S. both posted dismal data from their respective industrial economies.
Volumes did see some growth ahead of the upcoming Memorial Day holiday, though not nearly enough to bust out the champagne and sparklers.
So as not to bury the lede, this week’s lack of change in the PPI might ultimately prove to be the most exciting stability in quite some time.
Despite expectations for seasonal growth in the second quarter, the health of the American consumer has continued to become more precarious, stirring headwinds for even once-reliable sources of freight.
The Commercial Vehicle Safety Alliance (CVSA) is holding its annual International Roadcheck next Tuesday through Thursday.
Volumes are just beginning to tick up at the tail end of April, but freight demand in the quarter has been mostly flat and thus grossly unseasonable.
Weekly NTI Update
Weekly NTI Update
What do historically low rejection rates mean for the truckload industry?
While ocean carriers are not facing the same risks as their domestic trucking counterparts, given their consolidation and enormous war chests, ocean’s weakness in demand will continue to trickle down into truckload markets.
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Upstream and historic values are predicting another strong deterioration in truckload spot rates in April. How seriously should we take this?
Despite seeing slight seasonal growth, truckload markets are showing a continued soft patch.
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The gap between current levels of freight demand and those of 2019 is narrowing, casting doubt on the market’s ability to sustain growth.
Weekly NTI Update
The consumer will be key to resolving the present tension in freight demand’s future, but consumers continue to be predictably unpredictable.
Weekly NTI Update
Market conditions will likely become a bit more favorable before they get much worse.
Weekly NTI Update
Strangely enough, tender volumes are abiding by seasonal trends.
Weekly NTI Update
Weekly NTI Update
Strangely enough, tender volumes are abiding by seasonal trends. The first quarter of 2022 was unusually active as shippers tried to get ahead of disruptions to capacity, which historically tightens in the spring.
Weekly NTI Update
With the inflation-squeezed consumer running through their discretionary budgets, freight demand is in a precarious state.
Weekly NTI Update
Consumers’ appetite for discretionary spending has been usurped in favor of squirreling away income into personal savings.
Weekly NTI Update
Volumes have continued their recovery from the winter holiday season with a surge in pent-up freight demand unleashed into the market. Naturally, since last week’s data was affected by holiday noise, the Outbound Tender Volume Index (OTVI) faces some absurdly easy comps on a weekly basis. Even still, accepted tender volumes remain below their levels of 2021 and ’22 for the time being.
Weekly NTI Update
Volumes have continued their recovery from the winter holiday season with a surge in pent-up freight demand unleashed into the market. Naturally, since last week’s data was affected by holiday noise, the Outbound Tender Volume Index (OTVI) faces some absurdly easy comps on a weekly basis. Even still, accepted tender volumes remain below their levels of 2021 and ’22 for the time being.
Weekly NTI Update
For all intents and purposes, the month of December has only three weeks of freight activity, as the final week from Christmas to New Year’s is effectively null. In years prior, freight demand has fallen throughout the month before bottoming out in that final week. So far, December looks to be following seasonal trends, which is to say that, while shippers’ activity is winding down, this movement is not alarming by itself. Rather, the gap in freight demand between 2022 and ’21 (or even ’20) is the main symptom of current ailments.
Weekly NTI Update
For all intents and purposes, the month of December has only three weeks of freight activity, as the final week from Christmas to New Year’s is effectively null. In years prior, freight demand has fallen throughout the month before bottoming out in that final week. So far, December looks to be following seasonal trends, which is to say that, while shippers’ activity is winding down, this movement is not alarming by itself. Rather, the gap in freight demand between 2022 and ’21 (or even ’20) is the main symptom of current ailments.
Weekly NTI Update
Contrary to popular opinion, December is not a peak season for freight. True, the freight that needs to be moved in this month typically has greater urgency than usual, which does put upward pressure on carrier rates. But peak truckload volumes are largely influenced by maritime imports, which historically peak between July and September.
Weekly NTI Update
Historically, November is the month in which maritime imports begin to move inland for their final push before the holiday shopping season. Yet such imports were lost at sea this year, failing to materialize during ocean shippers’ peak season. This one-two punch of weakened import volumes and overstocked retail inventories means that carriers are left with fewer opportunities to source freight.
Weekly NTI Update
Weekly NTI Update
Historically, November is the month in which maritime imports begin to move inland for their final push before the holiday shopping season. Yet such imports were lost at sea this year, failing to materialize during ocean shippers’ peak season. This one-two punch of weakened import volumes and overstocked retail inventories means that carriers are left with fewer opportunities to source freight.
Outbound demand in Harrisburg and Allentown, Pennsylvania, bottomed out at the start of the month and are starting to slowly rise. Dallas and Fort Worth, Texas, both are seeing rejection rates drop to a two-year low.
FreightWaves SONAR recently released two new market analysis tools that provide lane-level rate benchmarking capabilities and insight into the future state of the domestic truckload spot market.
Atlanta still owns the most market share by outbound volume but saw a drop in its value as demand falls further. Imports to the Port of New York and New Jersey fell to their lowest levels since 2021, bringing surface transportation volumes down with them.
Contracted tender volumes in Ontario, California, remain at their lowest levels since 2020, and markets in Illinois are struggling to recover from drops this month.
Weekly NTI Update
Markets along the East Coast in the path of Tropical Depression Nicole are seeing relatively normal fluctuations in rejections in volume compared to previous severe storms.
Since the pandemic started, many shippers found their existing contracts unable to ensure carrier compliance. Supply and demand were especially volatile, and so spot rates, which are more sensitive to changing market conditions, handily outpaced contract rates.
Dry van volume dropped significantly this month leading into the holidays, but reefer demand remains strong. Diesel price per gallon grows slowly, but the spread between wholesale and retail prices rises.
Markets across the board have been seeing drops in both inbound and outbound volume since the start of the month.
FreightWaves unveiled two new features in SONAR at the F3 event, and container spot rates from China dropped further.
Weekly NTI Update
Weekly NTI Update
Truckload volumes in Elizabeth, New Jersey, are still rising after a boost in imports last week, but that will likely change in the days ahead. Detroit’s volume boom went bust, bringing reactions to their lowest on record since 2018.
Since the pandemic started, many shippers found their existing contracts unable to ensure carrier compliance. Supply and demand were especially volatile, and so spot rates, which are more sensitive to changing market conditions, handily outpaced contract rates.
Charlotte, North Carolina, is seeing a slow recovery after volumes dropped to their lowest levels since February of 2021, and reefer volume in Milwaukee is up more than 22% this week.
Outbound demand in Denver is swinging up after falling to a two-year low earlier this month, and Salt Lake City has shown consistent headhaul market activity since Labor Day.