Freight Demand Continues To Plummet

Written by Adriana Pulley

FreightWaves’ US Outbound Tender Volume Index (OTVI) shows container imports, rail intermodal shipments, and truckload demand have all fallen from their stratospheric heights during the pandemic. According to FreightWaves expert analyst Zach Strickland, these numbers may better indicate how inflation will be tamed in the coming months than the Consumer Price Index (CPI).

A Clearer Picture: Pre-Pandemic (November 2019) to Present

• Container import bookings are ~6% higher than in November 2019 after averaging 80% higher throughout 2021.
• Loaded intermodal container volumes on the rails (ORAILL) are 7% lower than in November 2019.
• Outbound Tender Volume Index is just 9% higher than this time in 2019 after averaging 50% above pre-pandemic levels from July 2020 to March 2022.
  (As measured by FreightWaves’ Inbound Ocean TEUs Index)

Macroeconomic data doesn’t tell an accurate story…

…because the dollar figures they use are contaminated by emotion as well as supply and demand imbalances. For example, the scarcity effect is an economic psychological phenomenon that occurs when people believe something has a higher value simply because there is less of it. At the same time, they place a lower value on abundant objects. The scarcity effect has been one of the main catalysts of inflation these past two years.

Things look to worsen for transportation providers…

…as we enter December and January, which are typically the slowest months of the year for domestic freight movements. While truckload and import demand have not yet found their way back to pre-pandemic levels, it won’t be long before they do.

Overall, the trends remain unpredictable. The data we see on the macroeconomic level will take time to reflect what is actually taking place.