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Volumes stagnant, now 8% below year-ago levels

Photo: Jim Allen/FreightWaves

National freight volume movement has nearly come to a halt over the past week. The outbound tender volume index (OTVI) has been flat for more than 10 days within the 8,500-8,700 range. The current freight volume is at a level that would be typical for a national holiday like Independence Day or Labor Day. The current OTVI reading is the lowest of any non-holiday value in its three-year history. 

There are sectors of the economy and regions of the country that are beginning to come back online. This week, Tennessee, Georgia and South Carolina all announced plans to open some businesses in the coming week. Unfortunately for the freight industry, many of these businesses are service-related and do not move much freight. 

OTVI is reported as a seven-day moving average in order to smooth out day-to-day volatility. The index is currently in limbo and we believe looking at the weekly change (OTVIW.USA) will give better insight into the strength of any volume momentum swings.  

The reopening of service industries will be positive for freight volumes, but not nearly as significant as when the retail, manufacturing and industrial sectors come back online. Currently, all public manufacturing data is very weak: the Empire State Manufacturing Index posted its lowest reading in history for April at -78.2; and Markit’s Flash Purchasing Managers Index also reported a new series low for April at 27.4. So while it is constructive for freight volumes that service industries open back up, volumes will continue to underperform as long as the backbone industries are shuttered. 

On the positive side, 11 of the 15 major freight markets FreightWaves tracks were positive on a week-over-week basis. This ratio is a dramatic improvement from recent weeks. The markets with the largest gains in OTVI.USA were Memphis (26.27%), Laredo, Texas (18.26%) and Seattle (14.27%). On the downside, this week saw a decline in Dallas (-10.83%), Savannah, Georgia (-2.99%), and Houston (-2.77%).


Tender rejections continue to fall, now at an all-time low

Outbound tender rejections have fallen from the previous series low last week to a paltry 2.87%. This is well below any point in the index’s three-year history. 

The index has previously found a support level around 4%, meaning it tends to bounce and does not fall below this level. This is the longest time OTRI has been under that support line, and with volumes at national holiday levels, there is not much pointing towards a rebound. 

Since peaking at 19.25% on March 28th, OTRI has plummeted by 85%. OTRI is a measure of carriers’ willingness to accept loads at contracted rates and currently, carriers are moving whatever freight they can find. Contract volumes are at Independence Day levels, and spot rate volumes from are in the Christmas Day range for most major lanes. 

In terms of pricing power, it is not constructive to either shippers or carriers when volumes are this low. So, to grasp where the power is in this underperforming environment, we must look to pre-crisis capacity, which was already excessive. Although we believe bankruptcies and company failures will accelerate during the second quarter, capacity is still very loose right now. Until volumes pick back up, or a swath of drivers leave the market, that environment will remain.


For more information on the FreightWaves Freight Intel Group, please contact Kevin Hill at [email protected], Seth Holm at [email protected] or Andrew Cox at [email protected].

Check out the newest episode of the Freight Intel Group’s podcast here.


  1. Hans Witt

    How do get only 8%?, Landstar earning projected down 20-30% ( WSJ)! There whole segment of the economy shut down.50% or more of the trucks are parked. NO Spot freight, OK The few brokes that trying to get a truck for .98 cent mile, crooks , same as no freight !
    Air and rail volumes down at best 12% most rail is 26% , where do you come up with these numbers?

  2. Mike

    How about a story on the drivers of these trucks, you know, the “human” element to the industry? Unemployed drivers, and there are many, are In many cases collecting roughly $23 an hour to sit at home for the next 36 weeks. That’s quite a bit of coin, imagine if it is you and the wife, that is $1800 a week? Hell, you just hit the lottery! Think these folks will be coming back to work anytime soon to that $17 an hour job? I saw an article the other day, a gal got that payroll protection funding, and her employees pulled a mutiny on her.

    I would be curious to see an attempt to clarify the above. What are, if any, ramifications to the above scenario I laid out above? Is it a reality out here, or are their stop gap measures to put an end to these payments when and if the economy is ever allowed to function?

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Seth Holm

Seth Holm is a Senior Research Analyst for the Freight Intel Group at Freightwaves, which publishes proprietary research on all things transports and logistics. Most recently, Seth spent 9 years as an analyst covering consumer and technology, media and telecom (TMT) stocks at a hedge fund. Prior to that, he was as an analyst at a high net worth wealth advisory firm. Seth is a graduate of the University of Georgia with a major in Finance.