Carriers Regain Ground in Freight Negotiations Amid Seasonal Slowdown
The latest FreightWaves Supply Chain Pricing Power Index reveals an uptick to 40 for shippers this week, up from 35 the previous week, indicating a shift in negotiating power back towards carriers.
Read also: Challenges Faced by Low-Cost Carriers (LCCs)
The seasonal drop in freight volumes, typical at this time of year, is largely attributed to Christmas and New Year’s falling midweek, causing an earlier-than-usual slowdown. According to FreightWaves’ analysis using their SONAR platform, the Outbound Tender Volume Index (OTVI)—which tracks national freight demand—has decreased by 5.4% week over week, and is down 2.43% compared to the same period last year.
Despite the broader declines, some of the nation’s largest markets, such as Southern California and Dallas, have seen tender volumes rise modestly. Conversely, markets like Atlanta and Chicago have not fared as well, experiencing weekly volume declines of 2.34% and 6.3% respectively.
On the capacity side, the market is witnessing higher tender rejection rates—a reflection of tighter conditions. The Outbound Tender Reject Index (OTRI) surged by 286 basis points to 9.34%, with significant hikes in major markets like Chicago, Los Angeles, and Dallas. This rise in rejections is the first consistent holiday-related reaction in two years, suggesting a looming tighter environment moving into early 2025.
Spot rates have also experienced volatility, with the National Truckload Index (NTI) dropping by nine cents to $2.43 per mile. However, this figure remains 18 cents higher than last year’s level, likely indicating further upward pressure as rejection rates adjust.
Data from IndexBox shows that November’s retail sales were strong despite the late Thanksgiving holiday, forecasting a 0.5% month-over-month growth. As the market adjusts to these seasonal effects, all eyes are on potential volume rebounds and rate movements post-holiday season, with indicators suggesting a possible tighter freight market environment as 2025 unfolds.
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