State of Freight takeaways: sagging volume, but capacity tightening a bit

With a rebound successful the freight marketplace expected to person commenced agelong earlier the extremity of 2025, the inevitable question among analysts and observers is: what happened?

That was the absorption of the November State of Freight webinar Tuesday, with FreightWaves’ strategical expert John Paul Hampstead joining SONAR’s caput of freight marketplace quality Zach Strickland to instrumentality up the issue. FreightWaves and SONAR CEO Craig Fuller sat retired the November webinar, with Hampstead taking his place.

One of the culprits was identified rapidly successful the treatment betwixt Hampstead and Strickland: a turndown successful demand. That was 1 of the 5 takeaways from the November discussion.

Carriers merchantability capacity. Strickland and Hampstead reviewed information successful SONAR’s Outbound Tender Volume Index (OTVI) and it shows that request for that capableness is brushed by immoderate measure.

“The tender measurement scale is not precise awesome astatine this point,” Strickland said, pointing to “the large dip.” He said measurement is down astir 11% from this constituent successful the calendar past twelvemonth though past twelvemonth astatine this point, the OTVI was taking a abrupt counterseasonal downturn.

A caller upturn successful the OTVI was noted by Strickland, but helium said it was not “robust growth.”

Hampstead said galore retailers whitethorn beryllium expecting an “anemic oregon brushed request oregon income situation going forward.” Given that, “I deliberation that these retailers are blessed to benignant of pain disconnected those inventories and fto them tally down,” helium said.

Demand, Hampstead said, “is truly what is holding the truckload marketplace back.”

The counterpart to the OTVI is the Outbound Tender Rejection Index (OTRI). It is simply a measurement of capableness and Strickland noted it is stronger…but not by a lot.

The rejection complaint has been rising, lasting Tuesday astatine 6.79%. Last twelvemonth astatine this time, Strickland noted, it was astir 6.5%. “We’ve had this incremental tightening of capableness that astir radical would not person felt, oregon they didn’t consciousness it, due to the fact that it’s not happening quickly,” Strickland said. A quality of that magnitude implicit a twelvemonth is “essentially nothing,” helium said. “It has been dilatory getting higher, truthful these increases are conscionable not easy felt arsenic much.”

Although it hasn’t happened yet, Strickland said spot rates are an country wherever “a batch of radical expect things to truly instrumentality off.” Recent question has seen an upward determination successful SONAR’s NTIL, the National Truckload Index (Linehaul Only),

Hampstead said information from the OTVI suggests that determination has been much long-haul concern recently, and that tends to propulsion down the complaint per mile calculations.