The outbound tender volume index has fallen off its typical holiday cliff and now sits at 6,819.93. Due to OTVI being calculated as a seven-day moving average, the index value will remain at suppressed "holiday volume" levels for the next few days. The nature of the index renders weekly comparables meaningless, but yearly comparables glean insight into the strength of this holiday season. Similar to the holiday trough after Thanksgiving, this Christmas trough is shallower than that of 2018.
The OTVI was initiated in March 2018, so we only have one-year comps available for the peak holiday season. It is safe to say this holiday season has been marginally stronger than last year. We believe there are a few factors bolstering a better holiday season besides a confident consumer: Thanksgiving fell on the latest possible day, leaving less time for shippers to get inventory off the shelves, and there may be a pull-through of goods from Asia due to Chinese New Year being earlier than usual in 2020.
Capacity At Tightest Level In 2019
It is typical for capacity to reach its tightest levels around the Christmas holiday and this year is no different. The Outbound Tender Rejection Index accelerated again this week and is now sitting at 13.93%. OTRI has doubled in the past six weeks and now sits comfortably above its 60-day moving average by 80%. Many drivers take multiple days off around Christmas, so the current tight capacity environment will likely loosen up over the weekend and into the New Year's holiday.
There is a strong possibility OTRI crosses over into positive yearly comparable space in the coming weeks. The index was cut in half from Christmas 2018 to the end of January 2019. The same is likely in early 2020 as the market stabilizes after the peak holiday season.
For more information on the FreightWaves Freight Intel Group, please contact Kevin Hill at email@example.com, Seth Holm at firstname.lastname@example.org or Andrew Cox at email@example.com.
Check out the newest episode of the Freight Intel Group's podcast here.
Image Sourced from Pixabay
See more from Benzinga
- 2019 Was A Win-less Season For Trucking…2020 Will Feel Like Winning The Super Bowl
- US Rail Traffic Falls Again
- Freight Futures Daily Curve: 12/27
© 2019 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.