Freight demand plummets at fastest pace since December 2020
Chart of the Week: Outbound Tender Reject Index, Outbound Tender Volume Index – USA SONAR: OTRI.USA, OTVI.USA
National truckload tender volumes have fallen nearly 9.5% since March 3 while rejection rates have accelerated their decline to hit their lowest point since June 2020. FreightWaves CEO Craig Fuller wrote about how this is the start of another “bloody” cycle for truckload carriers but not everything will be the same as it was in 2019. While that piece focuses on the future, let’s make sure we fully understand the present and then see what may be different about this environment from the one three years ago.
The freight market is easing at its fastest pace since early 2021, which was a time when many shippers expected seasonal easing to return. What they got was an unexpectedly stimulated consumer and a winter weather event rivaling major hurricane-level infrastructure damage. While the latter is hardly predictable in the long run, the former can be vetted.
The macroeconomic environment is vastly different from what we saw in December 2020. The pandemic was still in full bloom, and another round of stimulus checks went out to a population that was still largely isolating from one another.
Inflation was below the 2%-3% Federal Reserve target, hovering around 1.3%. And while unemployment was still relatively high, sitting just below 7%, a large portion of those claims were being subsidized at…
