This past week, the Outbound Tender Volume Index has risen 15 basis points to about 15,522. The OTVI was flatly maintaining it’s presence at an elevated level, since about mid-August. Freight market conditions would turn to a crawl over the length of October in the trucking world.
Contract volumes run up 24% over last year. The peak season had a certain strength. It was so strong last year but this year around, there’s supposedly a record-setting position for the season. Comps become slightly more difficult as we’re moving into the peaks season. Yet, there’s no belief that the volumes have a chance of breaking down, in a material sense this holiday season.
There are several signs of e-commerce growth are indicative of a strong holiday spending season, in the world of trucking and freight. Such factors include the lack of service-based spending options, the strong consumer sentiment and the low inventory-to-sales ratio.
Just because the holidays are approaching though, doesn’t make a huge difference for the freight situation. Certain skeptics are careful of calling this over with 8% unemployment. Meanwhile, at least 8 million Americans are still on federal unemployment insurance.
The Outbound is Incoming To Capacity
41% of people in the US said the economy has been affecting their holiday spending versus the 28% who said so last year. Potentially, that’s the hugest change appearing since the global financial crisis nearly ten years ago. A sharp increase has become evident in the amount of shoppers who will start their holiday shopping promptly.
The week before, a note came out about the capacity constraints which limit truck driver training schools. From the 28 driving schools, an estimate of 22% for all truck driving schools were shut down. Temporarily or permanently, it doesn’t truly mater with 57% of pre-pandemic capacity. Some carriers order however many trailers but it may take time before bottleneck manuevers would be solved in traffic training. Contract rates rise rapidly for capacity in 2021.