We are finally wrapping up CVSA International Roadcheck week, and as usual capacity has been sidelined, with owner-operators parking their trucks and looking to avoid the risk of inspection. Those who have risked DOT inspection remained opportunistic and looked to maximize the value of their equipment over this 72-hour timespan.
With those impacts, plus the Memorial Day weekend on the horizon, get the full scoop on how you can navigate the freight market with this week’s Redwood Report.
Watch This Week's Redwood Rundown
Roadcheck! Yes, that’s the focal point this week, but EVP of Procurement Christopher Thornycroft also discusses the larger long-haul capacity picture and the potential black swan event that could really throw the market for a loop:
A Closer Look at International Roadcheck 2023 Impacts
We’re seeing limited capacity, particularly out of the regions with rising volumes such as the Southeast (especially Atlanta) and Southwest (especially Los Angeles and the capacity it pulls from the Phoenix market) along with Texas (especially Houston) and Chicago.
With a historically high spread between contract and spot rates, brokerages are emphasizing service of contract freight with the limited capacity at hand. A natural byproduct of the high contract-to-spot spread continues to be the limited spot environment, though an immediate return of spot capacity is expected with the end of Roadcheck week, ending tonight.
In terms of specific impacts, the Outbound Tender Rejection Index (OTRI) has risen .17% from Wednesday to 2.79%. While that’s still historically low, that .17% movement is actually the largest single-day OTRI movement upwards in 2023. We’ll look at the full OTRI impact next week.
Chart of the Week
The current 1.39 to 1 ratio Total Business Inventory to Sales Ratio from the Federal Reserve Bank of St. Louis (FRED) matches December 2022 for the highest inventory level to sales ratio since June 2020.
U.S. Census Bureau, Total Business: Inventories to Sales Ratio [ISRATIO], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/ISRATIO, May 18, 2023.
Looking for Even Deeper Market Insights?
Want to know more about how the freight market rebounds from Roadcheck week and how you should be thinking about capacity heading into Memorial Day weekend?
Follow the Redwood LinkedIn page to catch our Redwood Rundown videos on Tuesdays, plus coming soon you'll be able to sign up for exclusive deeper weekly market insights via email on Wednesdays. And keep checking back to our insights blogfor these weekly highlights.