Freight volumes still sluggish but positive this week

Outbound tender volumes (OTVI.USA) rose by just 1.06% year-over-year this week, down sharply compared to the year-to-date high of 6.78% from three weeks ago. The good news is that volumes seem to have settled into this lower sluggish (but positive) range. While tepid, this continues their upward trajectory and extends their multi-week winning streak dating back to late July, when OTVI first crossed over to positive on July 24. It has been positive on a year-over-year basis since. 

Nationally, outbound tender volumes were up 1.06% year-over-year this week. Month-over-month volumes are tracking down 7.18% while week-over-week volumes are down 1.28%. Overall, the volume picture continues to be positive but weakening substantially relative to the past several weeks. As we enter peak season, it will be important to watch whether volumes can stay positive or accelerate.

On a market-by-market basis, eight of the 15 major markets FreightWaves tracks were positive on a week-over-week basis. On the upside, Miami led the way, up 9.3%, followed by Savannah, up 8.5% and Cleveland, up 5.5%. We continue to keep an eye on Detroit volumes, which continue to be severely impacted by the UAW strike, though they are showing some signs of stabilizing, falling 22.5% year-over-year and 0.9% week-over-week. On the downside, the worst markets week-over-week included Fresno (down 11.2%), Chicago (down 8.6%) and Seattle (down 7.2%).

National rejection rates rise this week

National tender rejections now sit at 5.21%. The tender rejection story has been much slower to develop, likely a reflection of stubbornly high capacity in the market. This week brought good news on this front, with tender rejections showing some signs of life and rising for the first time in several weeks.

OTRI.USA briefly broke above the 6% level for the first time since March back on September 17 but has since taken a noticeable step back. On a week-over-week basis, OTRI.USA rose by 41 basis points (bps). Month-over-month, it is also up 41 bps and year-over-year it is down 720 bps compared to 12.41% at this time last year. On a trending basis, OTRI.USA looks good and the trend is resuming upwards, having risen in eight out of the last 12 weeks with tender rejections rising off of the 3.75% bottom experienced in mid-August. National tender rejections are 3.4% above their 60-day moving average.

Year-over-year comparables for national rejection rates are still extraordinarily difficult due to the daunting 2018 numbers in which rejections never fell below double digits. As a result, on a year-over-year percentage basis, OTRI.USA is down 58.0%. As can be seen in the chart below, comparisons do not start to ease until the January and February timeframe in 2020.