After the winter storm disruptions, freight tender volumes have stabilized and moved horizontally this week. The Outbound Tender Volume Index is up ~16% yoy when adjusting for the high level of rejected tenders. Yearly comps will soon become tougher given the 30% volume surge last March on the backs of consumer panic buying and hoarding of grocery and household staples.
We are entering the seasonal second-gear freight markets find toward the end of Q1. Not only does the warm weather bring about elevated consumer demand, but retailers have quarterly results to report, and lagging inventories are not applauded by Wall Street.
In this week’s special topic report, the Passport Research team covered asset operators with a piece titled “It’s good to be a trucker” and highlighted that carrier key performance indicators (KPIs) are at the healthiest levels in years. The team wrote, “There was some seasonal giveback in operating ratios but this is to be expected. The bull market for freight is alive and well; the question is how long it will last. At this point, our answer is longer than we previously thought.”
Over the past week, there were a swath of stock upgrades in the transportation sector from various sell-side shops. As I wrote last week, since the market was already so tight and imbalanced, any event that removed trucks from the roads would have an outsized and lasting impact. Retailers and their transportation partners are finally…