Best week yet in January reverses short-term downtrend

National average spot rates inclusive of fuel dropped by 14 cents to $2.71 per mile. This represented a week-over-week (w/w) drop of 4.9%.

Contracted tenders rose 1.8% week-over-week, snapping a very short-term downtrend. Both the West and East coasts saw strength in tenders. Spot volumes fell in half of the four major lanes we monitor each week but this was a better result than we have seen in weeks. We continue to expect an upward trajectory for volumes in coming weeks despite typical January seasonality. Contract volume on a tender rejection-adjusted basis is outpacing 2020 levels by 26.4%.

Relative capacity loosened by just 13 basis points (bps) week-over-week to 21.97%, which indicates the rise in tenders was also driven by rising load volumes. This continues the  multiweek slide for tender rejections, primarily driven by improving routing guide compliance. On the positive side, the slope of the downtrend in tender rejections appears to be flattening and bottoming out.

The backdrop for truckload (at least through 1H 2021) remains healthy with a strong consumer, further stimulus forthcoming and a recovering industrial economy.

Consumer spending, according to Bank of America card spending data, was up a strong 6% year-over-year last week, driven by the initial disbursement of stimulus.