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Encouraging Signs for Trucking Market as Volume Returns

High-frequency truckload volume data published by FreightWaves SONAR shows promising signs that demand has begun to return to the U.S. trucking market.


SONAR measures volume of truckload tender requests using the Outbound Tender Volume Index (OTVI). Since tender data is obtained from shippers’ load requests, the data does not include the standard false flags in load board data, such as ghost loads and duplicate postings. Moreover, by way of tracking the contract market, OTVI effectively forecasts the market direction – making OTVI a multi-value indicator.


OTVI was at 10,541 points on Jan. 25 2023, a 12% increase on the same date in 2020 and 11% on 2019. As the OTVI indicates, the 2020 score was lower than 2019 due to the mid-2019 recession in the freight market. By this logic, the firm increase in volume for 2023 suggests a full recovery is on the horizon for the trucking industry, a possibility that will be confirmed if the OTVI continues its upward trajectory.



Capacity, however, continues to be greater than demand. Another metric assessed by SONAR is Outbound Tender Rejection Index (OTRI), which measures what percentage of loads are rejected by carriers. Aside from the extreme figures of the COVID-19 lockdown period, the rejection rate is at the lowest it has ever been, at 3.76%. Truckload carriers are taking almost all cargo they are offered, in order to keep trucks moving and drivers working; the OTRI would have to hit more than 8% to indicate that the freight market is moving in the right direction.


Volume being up suggests that demand in the U.S. goods economy is increased – due either to excess inventories clearing and restocking, or to rates of purchase rising.


Rejection being down, meanwhile, indicates that there is excess capacity. It is likely that this excess capacity is caused by the surge in drivers and trucks that occurred to meet demand during the pandemic. This demand has since shrunk, leaving many more drivers and trucks in the market than there were when demand was last at its current level.


If OTVI (demand) continues to be up, while OTRI (capacity) also continues to be below a good score, this will be a clear indicator that there is too much capacity, which will have to decrease to meet demand – even if January demand is at the highest it has been for 4 years.


There is, however, hope. Demand is already strong, and volumes will increase from produce and spring shipping season. If truckers can hold on for a few months, the degree of excess capacity is likely to decrease.

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