Tender Volumes Show Signs of Recovery

The truckload market is actively working to overcome seasonal depression, with tender volumes beginning to rebound after a sluggish period. Although freight volumes are below last month’s levels, there is a notable improvement as tender volumes have turned positive year over year for the first time since mid-November. The Outbound Tender Volume Index (OTVI), which measures national freight demand by tracking shippers’ requests for trucking capacity, has stabilized by eliminating holiday-related fluctuations. Currently, tender volumes are up 4.6% compared to last year’s period despite a slight weekly decline of 0.2%, indicating a resilient market poised for continued growth.

Elevated Rejection Rates and Spot Rates Persist

Despite the encouraging rise in tender volumes, tender rejection rates and spot rates remain elevated following the holiday season. The Contract Load Accepted Volume (CLAV) index, which tracks accepted load volumes under contracted agreements, has seen a more significant week-over-week decrease of 0.58%, primarily due to an uptick in tender volumes that have yet to be fully absorbed. Additionally, Bank of America’s latest card spending report revealed a 0.8% year-over-year decline in overall spending, driven by harsh winter weather across the Midwest and South. These factors contribute to sustained pressure on spot and tender rejection rates, highlighting ongoing challenges within the freight market.

Regional Growth and Mode-Specific Trends Highlight Resilience

On a regional level, most freight markets have experienced growth over the past week, with 83 out of 135 markets tracked by SONAR reporting higher volumes. Significant increases were observed in St. Louis and Jefferson City, Missouri, which saw a 17.2% week-over-week rise, and Atlanta, where tender volumes surged by 8.53%, marking one of the most substantial volume weeks on record. Mode-specific trends reveal a rebound in the dry van market, with the Van Outbound Tender Volume Index increasing by 0.88% and surpassing year-ago levels by 5%, primarily influenced by the Martin Luther King Jr. Day holiday. Conversely, the reefer market experienced a slight decline in tender volumes, decreasing by 0.63% week-over-week, though it remains up over 9% compared to last month and 6.6% higher than the previous year. The new administration’s policies and the upcoming Lunar New Year are expected to influence freight volumes further, particularly as inbound ocean volumes rise and impact intermodal transportation.