Holiday truckload demand stronger than in 2020

Unlike the end of 2020, when tender volumes dropped quickly throughout December, there has been more of a slower-paced decline this year. Last year, it was apparent by looking at the OTVI that shippers were expecting transportation capacity to ease as it traditionally does after the winter holidays. 

In 2020, tender volumes fell 8% from Dec. 4 to 22. This year, the OTVI only dropped 4.3% over the same period. 

After December, the OTVI continued to fall coming out of the holidays, falling another 3% before trending lower into the middle of February. At that point, it appeared truckload demand was going to gradually return to something similar to a pre-pandemic pattern, but a catastrophic winter weather event along with unexpected consumer resilience reversed the course as tender volumes jumped 23% in eight days. 

Carrier networks were paralyzed as ice and record cold temperatures hit as far south as Houston the week of Valentine’s Day. Shipper operations were also impacted and that led to a domino effect of production and transportation disruptions that are still being felt today. 

This event combined with strong consumer demand for goods and industrial recovery pushed shippers back into panic mode as trucking capacity became as scarce as it was around the holidays at a very uncharacteristic time. 

The industrial sector was nearly fully recovered and consumer demand for goods was as strong as it ever has been as of November. Port congestion is significantly worse than it was at this point last year, which means shippers cannot assume order cycles will get better. 

There have been some improvements in labor since last year as companies have ended furloughs, but trucking employment levels are still not where they were prior to the pandemic era and demand is still well above 2019 levels. 

Shippers appear to be wary of letting their feet off the accelerators heading into the new year, even with concerns of demand eroding on the heels of rapid inflation. After a year of record demand, little has changed in terms of aggregate infrastructure. Inventory management strategies will have to adapt to what has become a very volatile environment.

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