National outbound freight volumes have gone faster than they came. The coronavirus giveth a freight frenzy, and the coronavirus taketh said frenzy. The outbound tender volume index (OTVI) is now below where we would expect it to be during “normal times.” The index is below its March 2018 starting point of 10,000, currently sitting at 9,417.07. Since the peak of the freight frenzy 17 days ago, OTVI has fallen 26%. It took 31 days for national freight volumes to rise from normal levels to their peak on March 24th.
National truckload freight volumes are now at the same point they were on February 17th. There is no end to the volume deceleration in sight. At the time of writing, 94% of Americans are still under shelter-in-place orders. Even if consumers weren’t under orders to stay home, the businesses in their communities are still shut down. The U.S. Chamber of Commerce released a survey of small businesses that stated within two weeks more than 50% of small businesses would be completely shut down. Small businesses move a significant amount of truckload freight. National freight volumes will continue to underperform as long as small businesses are not open. Carriers need to prepare for a time when trucks are sitting idle.
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 the absolute weekly percentage decreases are accelerating. The market with a gain in OTVI.USA was Laredo, Texas (3.57%). On the downside, this week saw a decline in Indianapolis (-21.86%), Miami (-21.35%) and Savannah, Georgia (-21.25%).
Tender rejections plunge this week
Much like OTVI, the outbound tender rejection index (OTRI) has also fallen back to “normal levels.” In the 11 days since peak tender rejections, OTRI has fallen 65% – from 19.25% to 6.84%. Just as with volumes, capacity is loosening faster than it tightened. In the 11 days prior to peak OTRI, the index increased 43%. This was a drastic but short-lived tightening of capacity. Due to the steep decline in volumes, capacity has now returned to what we would expect in a normal spring environment.
Capacity will continue to loosen as freight dries up throughout April. With a vast majority of the country on lockdown and many industries at near cancellation, there simply isn’t enough freight to keep capacity tight.
Check out the newest episode of the Freight Intel Group’s podcast here.