The Outbound Tender Volume Index (OTVI) has roared out from the Memorial Day disruption and now sits at 10,996. This is the highest June 5 value in the three-year series history. Due to the holiday, weekly comparisons are skewed, but OTVI is up 7% year-over-year. The agricultural hubs along the West Coast and in the Southwest and Southeast continue to be strong sources of volumes. In May, the Midwest and Great Lakes area also became a source of outbound freight as much of the country’s manufacturing and industrial economy came back online.
On the positive side, all 15 of the major freight markets tracked were positive on a week-over-week basis. This ratio soared this week relative to last week’s tepid ratio but the strong levels have been mostly consistent in recent weeks. The markets with the largest gains this week in were Laredo, Texas (37.34%), Houston (30.88%) and Savannah, Georgia (30.14%).
Tender rejections continue to improve with volumes
Outbound tender rejections have increased week-over-week for the fifth week in a row after tumbling for the six weeks since the OTRI peak of 19.25% on March 28. Capacity has tightened as volumes began to fill markets throughout May. Considering we are just four weeks removed from the lowest point in OTRI’s data history, any movement toward the upside should be welcomed by carriers.
Although there are pockets of tightening capacity in the Southeast, on the West Coast and Northern Plains, capacity remains relatively loose across the country. If volume throughput remains near this level, rejections will adjust upward in the coming weeks.
Source: Freightwaves