Transportation Market Report (August 2024): Truckload

OTRI & OTVI

In August, the Outbound Tender Volume Index (OTVI) increased slightly by 1.4%. The Outbound Tender Rejection Index (OTRI) showed a decline of 66 BPS in August. These trends suggest a minor improvement in freight volumes, while capacity continued to ease slightly, leading to a more competitive market environment.

Key Takeaways:

• OTVI is up 2.58% YoY, indicating a slight but positive gain in overall freight volumes.
• OTRI increased by 80 basis points (BPS) YoY, suggesting a modest tightening in capacity.
• These gains reflect a gradual but encouraging expansion in the freight market.
• As the end of the month (EOM) and the Labor Day holiday approached, tender rejections remained relatively stable, with a minor change from 4.5% during the first 24 days of the month to 4.68% in the last 7 days.

Spot Rates?

Dry Van Spot Rates: Spot rates for dry van decreased from $2.07 per mile in July to $2.01 per mile in August, marking a 2.9% decline month-over-month (MoM). This decrease indicates a slight easing in demand and a possible loosening of capacity as the summer season progresses. While there has been a slight increase in contract volume and a corresponding rise in freight being rejected and pushed to the spot market, the overall impact on spot market rates month-over-month (MoM) remains minimal. The increase in rejections has not yet translated into a significant shift in volume that would meaningfully influence spot rates.

Reefer Spot Rates: Reefer spot rates saw a decline from $2.45 per mile in July to $2.40 per mile in August, marking a -1.6% drop MoM. This decrease points to a cooling in demand for temperature-controlled freight, likely driven by the seasonal reduction in agricultural shipments and a potential oversupply of capacity in the market.?

Dry Van Load-To-Truck Ratio

The Dry Van Load-To-Truck Ratio decreased from 4.18 in July to 3.71 in August, indicating a continued reduction in the number of loads available per truck. This 11.2% decline suggests that capacity has further loosened, with fewer loads being posted relative to the number of available trucks. The drop could be attributed to a seasonal slowdown in freight demand as summer draws to a close, along with an increase in truck availability. As a result, shippers may find it easier to secure transportation services, while carriers are likely to face a more competitive environment with a lower load-to-truck ratio.

Contributors

Thanks to this month's contributors:

Mike Beckwith - Vice President, Brokerage

[email protected]

Dan Burke - Senior Manager, Strategic Capacity & Pricing

[email protected]

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