The Outbound Tender Volume Index (OTVI.USA) is in the midst of its post-New Year's Day rebound. The index sits slightly above the 2019 number and is currently at 9,856.04. This is slightly below the March 2018 starting value of 10,000, but it is very likely the index will move above that number in the coming days as operations get back in full swing. OTVI is an index of accepted tender volumes at contract rates.
The current spread between contract and spot rates is much higher than the spread this time last year. Our volume index last year didn't hit 10,000 until the end of February. This is not only because freight volumes were relatively weak but also because many carriers were still looking to accept spot rate loads due to the spread being much tighter between contract and spot. This leads us to believe in the coming weeks OTVI may seem strong on year-over-year comparables, but this may be misleading. Nonetheless, OTVI may exhibit double-digit yearly gains in the next few weeks. We will continue to monitor and analyze the situation.
All 15 of the markets FreightWaves tracks were positive on a week-over-week basis. Markets with the largest gains in OTVI.USA were Fresno, California (54.92%); Laredo, Texas (49.12%); and Memphis, Tennessee (39.94%).
OTRI descending rapidly but still well off 2019 lows
After peaking at 14.25% on Christmas Day, the Outbound Tender Reject Index (OTRI) has slipped to 7.68%. The fall was expected as drivers got their wheels turning again after spending time at home over the holidays. As shown in the chart below, a kindred decline occurred last year.
The index experienced a similar but more significant fall at the beginning of 2019, when the index dropped by half in just four weeks. We expect a similar acceleration to the downside in the coming weeks, but for now OTRI is still well off the 2019 lows.?
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