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Quick-Hitting Snowstorm Could Further Tighten Denver Freight Market (With Forecast Video)

FreightWaves

A quick-hitting storm will move through the Denver area today and tonight. At this time, Denver is a freight market with high volumes, elevated rejection rates and tight capacity. The storm could make things a little worse.


SONAR Critical Events and radar: Friday, Mar. 27, 2020, 10 a.m. EDT; Rockies/north-central U.S snow storm
Setup and snowfall amounts

A fast moving spring storm will move through Colorado today and tonight. Snow will begin over the northern mountains and foothills this morning. Rain will spread eastward across eastern

Colorado this afternoon and evening. Rain will change to snow late this afternoon and this evening across the lower elevations. In addition, strong winds from the north will produce areas of blowing snow across eastern Colorado.

Snowfall totals of 3 to 6 inches are likely for places such as Limon, Castle Rock, while Cameron Pass and Rocky Mountain National Park could get up to 10 inches.

Heavy snowfall and gusty winds will also hit western Nebraska tonight, as well as southern Wyoming, which is part of the Denver market. Drivers may run into potential roadblocks and delays on I-25, I-70, I76 and I-80 across the impact zone.

The storm will then track through other areas of Nebraska, along with parts of South Dakota, Minnesota, northern Wisconsin and upper Michigan Saturday through Sunday. Look for snowfall accumulations of 3 to 6 inches with locally higher amounts possible. Winds will remain gusty, between 30 and 40 mph in some areas.

Impact on freight

FreightWaves SONAR data indicate elevated outbound tender volumes (OTVI.DEN) in the Denver market – the 20th-highest in the nation. The national OTVI has a base value of 10,000 based on trucking volumes on March 1, 2018. The index moves in proportion to the total observable outbound tender volume among the 135 freight markets nationwide.

Outbound tender rejection rates (OTRI.DEN) are also high, around 30%. In terms of percentage ranges for demarcating a tight, balanced or loose market, here's the rule of thumb – a loose market is defined by tender rejections in the low- to mid-single-digit range, a balanced market by tender rejections in the high single digits, and a tight market by tender rejections above 10%.

The OTVI and OTRI are updated in SONAR every 24 hours.


SONAR Tickers: OTVI.DEN, SOTRI.DEN, MOTRI.DEN, TOTRI.DEN, LOTRI.DEN

Tender rejections are the percentage of electronic, contracted loads offered by shippers that carriers turn down. In this case, carriers are rejecting a high amount of freight because they literally may be at full utilization and do not have any excess capacity to take on the loads due to the COVID-19 outbreak. Carriers can't keep up with the increased demand for shipments of medical supplies and household items. FreightWaves has been tracking national outbound tender rejections since January 2018.

But SONAR can break down tender rejections in several ways, including by length of haul. Rejections rates in Denver are sky high for mid-haul (MOTRI.DEN), tweener-haul (TORTI.DEN) and long-haul (LOTRI.DEN), lanes of 250 to 449 miles, 450 miles to 799 miles, and 800 miles or more, respectively.

However, in the past several days, carriers have been rejecting fewer short-haul loads (SOTRI.DEN) of 100 to 249 miles. So carriers with enough capacity to send drivers to Denver to pick up loads seem to be keeping most of them close to the Mile High City. The developing snowstorm may tighten capacity a bit more in the short-term as some carriers could be reluctant to send drivers into the storm. But since the storm will be in and out of the region in less than 24 hours, impacts will be short-lived.

Severe weekend weather

On the warm side of the snowstorm, thunderstorms on Saturday could produce tornadoes, large hail and severe winds from Des Moines, St. Louis and Memphis to Nashville, Louisville, Indianapolis, Chicago, Milwaukee and Columbus. As of this morning, the Storm Prediction Center (SPC) has placed northern Illinois in the Moderate Risk category. On a scale of one to five, with five being the highest risk, Moderate risk is a three.

Looking Ahead


SONAR Critical Events: Friday, Mar. 27, 2020, 10 a.m. EDT; Pacific Northwest snow storm next week

A series of storm systems will be moving into the Pacific Northwest starting Sunday night, possibly lasting through next Tuesday night, March 31. In the higher elevations of the Cascades in Washington, Oregon and British Columbia, as well as the Olympics in Washington,  look for total snowfall of 12 to 36 inches. Isolated spots of more than 36 inches are possible. This storm could impact the Seattle, Portland and Medford freight markets.

Have a great day! Please stay healthy and be careful out there!

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