The Outbound Tender Volume Index (OTVI.USA) has stayed horizontal below its March 2018 starting point of 10,000 since it recovered from its New Year’s trough.
The index currently sits at 9,401.28, which is slightly below its yearly comparable by less than 1%. At this point in the year, it is important to dissect our Outbound Tender Volume Index into its two largest components: van and reefer volumes.
Van volumes in 2020 are almost identical to 2019 at this point, but they had been slightly up in the low single-digit range for the last two weeks. A different story is visible when analyzing reefer volumes. Outbound reefer volumes are up nearly 15% year-over-year, due in part to particularly cold weather in the Midwest. It may seem counterintuitive for reefer volumes to soar in cold weather, but reefer trailers are used to keep freight from freezing in the winter.
Two of the 15 of the markets FreightWaves tracks were positive on a week-over-week basis. Markets with the largest gains in OTVI.USA were Memphis, Tennessee (3.89%), and Atlanta (3.09%). Markets with the largest declines in OTVI.USA were Savannah, Georgia (-14.37%); Fresno, California (-12.46%); and Cleveland (-12.01%).
Capacity loosening
After peaking at 14.25% on Christmas Day, the Outbound Tender Reject Index (OTRI) has slipped to 7.1%. This is three straight weeks of declining tender rejections off the peak. The index has seemingly stabilized at a higher level than seen in most of 2019. This is due in part to the cold weather and thus higher reefer rejection rates. OTRI is an amalgamation of all Class 8 modes — van, reefer and flatbed. Van makes up the largest portion, but elevated reefer rejections have helped hold OTRI nearly flat with early 2019 levels.
Reefer rejections have begun to tumble from a healthy level over the last week due to warmer than average temperatures across the Midwest. Looking ahead, weather across the U.S. is forecast to warm over the next few days. We expect reefer rejections to continue to fall and drag down OTRI for the next week.
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.
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