National freight volumes closing in on two month winning streak

Labor Day noise continued to influence the individual markets we follow in OTVI.USA as it is calculated based on a seven-day moving average. However, the overall index continued on its upward trajectory and extended its multi-week winning streak dating back to late July. Nationally, outbound tender volumes were up 4.17% year-over-year last week and have separated from the 60-day moving average by 4.3% to the upside. National outbound tender volumes were up 16.94% week-over-week and 3.3% month-over-month.

On a market-by-market basis, while it is difficult to glean any material insights given Labor Day distortions in the data, Fresno (up 90.1% year-over-year), Savannah (up 51.2% year-over-year), and Miami (up 20.5% year-over-year) led the way on the upside. On the downside, the worst markets included Ontario (-53.5%), Los Angeles (-50.3%), Atlanta (-46.4%) and Houston (-40%).

“We’re keeping an eye on the Midwest and Great Plains. In the fourth quarter of 2018, when the Midwest became very active, it affected capacity across the entire country,” said Jonathon Falcon, managing director of the Nashville, TN, branch of Sunset Transportation. “This was especially true for the South, where capacity didn’t loosen up again until February of 2019. We aren’t expecting this same drain on capacity, even as there might be more volume in the Midwest this year. It looks like the traditional seasonalities are coming back this year.”   

National rejection rates up again, uptrend back intact

After slipping slightly last week, national rejection rates resumed their multi-week winning streak dating back to early August. National rejection rates were up 19 basis points week-over-week and now sit at 4.85%. They are closing in on the 5% level for the first time since June and March before that. OTRI.USA is showing clear signs of life and clues that it may be bottoming, confirming the optimistic tone around waning excess capacity that several publicly traded TL management teams struck at Morgan Stanley’s conference this week.

OTRI.USA is now up more than a full percent off the low seen in the past year of approximately 3.75% in August. It is now a robust 14.1% above its 60-day moving average of 4.25% as momentum is gaining steam to the upside. 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.