Chart of the Week: Contract Load Accepted Quantity Index, Outbound Tender Quantity Index – USA SONAR: CLAV.USA, OTRI.USA
Carriers are accepting the identical load volumes that they have been in April 2023, close to the theoretical flooring of the freight market’s current recessionary interval. Rejection charges (the speed at which carriers flip down load protection requests from contracted shippers) are greater than double what they have been on the time. That is additional proof {that a} important quantity of provide has left and is continuous to depart the home truckload market.
The Contract Load Accepted Quantity index (CLAV) is a measure of accepted load tenders from shipper to provider. It differs from SONAR’s Outbound Tender Quantity Index (OTVI) in that it doesn’t depend tenders that carriers rejected. Extra rejections imply it is more difficult to obtain truckload capability. When evaluating the Outbound Tender Reject Index (OTRI) to the CLAV, we will approximate how balanced the provision and demand curve is within the truckload market by durations of comparable accepted volumes and evaluating rejection charges at these instances.
In Might 2023, the CLAV had a price of 13,951 whereas the OTRI was 2.92% – mainly carriers have been robotically accepting masses with out discrimination. Final Thursday, the CLAV was at 13,910 whereas the OTRI hit 6.48%. Whereas not all masses are created equal, the common lengths of haul have been additionally comparable between the 2 durations. Seasonality is an element, however the traits are the principle inform.
Accepted volumes trended decrease from early September till November earlier than flattening. Rejection charges have been growing since early October, rising from about 4.5% on Sept. 29 to six.5% on Dec. 12.
This rise is greater than your typical seasonal spike pushed by vacation capability discount. The one yr that rejection charges elevated steadily throughout this era was 2019. In each different yr outdoors 2019 and the present one, rejection charges are both flat or declining heading into the Thanksgiving interval.
Wanting on the historic OTRI figures from the previous seven years, a downward pattern is current in most. This aligns with a little bit of a slide in demand popping out of the Labor Day weekend surge.
Nonetheless lacking from the present yr’s OTRI is the Thanksgiving week spike, which has been muted the previous three years. However the upward pattern in rejections is a brand new improvement, particularly contemplating it doesn’t look like pushed by a demand-side occasion.
Evaluating the OTVI (whole tenders) and CLAV (accepted tenders) over the previous yr, the hole is steadily rising. That is the results of much less availability of trucking capability. The hole is represented by the OTRI. The fascinating half is that each CLAV and OTVI are falling. Most individuals acquainted with transportation markets would suppose a transitioning market would have a flat to slowly rising CLAV and an growing OTVI, which is what occurred in 2020 as seen beneath.
