Yesterday we discussed length of haul differences with rejections;Today we’ll visit length of haul with Tender Volumes.
What is it?
Outbound Tender Volume Index (OTVI): An index of electronically tendered volumes on a given day.
A tender is a load offer from a shipper to a trucking company that is sent electronically. These are actual loads and are transmitted a few days before they are scheduled to be picked up. This is the most current and reliable indicator of market demand.
The FreightWaves SONAR outbound tender volume index (OTVI.USA) shows tender load volumes for the U.S. Users can also drill down to specific regions and market granularity. The index was created with a base of 10,000 on a national level from March 1, 2018 volumes. OTVI.USA currently is at 9,214. This means that outbound tender volumes for the entire USA are at 92.14% of their March 1, 2018 levels. The formula to calculate this is: 9,214/10,000= 92.14%.
Outbound Tender Volume Index by Length of Haul
OTVI can be broken down by five different lengths of haul, allowing SONAR users to see freight volumes, and the historical trends in freight volumes based on the distance a load travels from a market. These include city/local loads (COTVI), short-haul loads (SOTVI), mid-haul loads (MOTVI), tweener loads (TOTVI) and long-haul loads (LOTVI).
In the chart above, SONAR is comparing the main OTVI index for the Chicago market to three different OTVI length of haul indices – short-haul (SOTVI.CHI), mid-haul (MOTVI.CHI) and long-haul (LOTVI.CHI).
Who needs it?
Carriers: If a carrier prefers regional loads, its staff can view the MOTVI map above to see which markets have the highest volumes for loads that deliver 251 to 450 miles from a market. Markets with darker shades of blue will provide the most freight by length of haul to keep a carrier’s trucks rolling. The markets with lighter shades have lower freight volumes, signaling an area where there is less demand for capacity.
Brokers: Carrier rates can vary based on the destination of your load. Loads that deliver into a low volume market might cost you a higher rate per mile than loads that deliver into high volume markets. SONAR’s length of haul indices allow brokers to break down the destination markets by lanes to see if the volumes that are shipping from that market are local, short-haul, mid-haul, tweener or long-haul loads, enabling brokers to optimize their rates.
Shippers: OTVI allows shippers to monitor the outbound volumes by length of haul in the markets you operate in. Shifts in freight volumes could lead to changes in capacity, applying upward or downward pressure to carrier rates. If you see a market’s outbound volume suddenly increase, you will be able to see which types of loads based on length of haul will be affected. If the increase is all local loads, and a shippers loads are primarily long-haul loads, capacity for long-haul shipments will not fluctuate.
What can I do with it?
The OTVI length of haul indices were built to help users identify freight volumes based on how far the load delivers from a market, and can be viewed at a national, regional or market granularity. Users can view this data on a U.S. Map, Tree Map or Chart to help them understand which lanes are shipping the most freight, or in which lanes freight volumes are declining. Shifts in freight volumes can affect capacity. An increase in freight volumes on a particular length of haul could tighten capacity for that lane, increasing carrier rates, while a decline in freight volumes could loosen capacity, causing carrier rates to fall.
- COTVI – City/Local. Loads that have a <100-mile length of haul
- SOTVI – Short-haul. Loads that have a 100-250 mile length of haul
- MOTVI – Mid-haul. Loads that have a 251-450 mile length of haul
- TOTVI – Tweener length of haul. Loads that are 451-800 mile length of haul
- LOTVI – Long-haul length of haul. Loads that are 801+ mile length of haul
In the chart above, the Chicago market shows an OTVI of 161.33 index points. Long-haul loads, – loads that are moving 801 miles or longer (LOTVI.MFR) from the origin, – represent 23% of all outbound loads from the Chicago market, but load volumes are trending downward, indicating that capacity on this lane could loosen, pushing rate down for long-haul carriers with capacity in the market.
Show me how!
1) View Mid-haul outbound tender volumes at a high level to see which markets have the most freight for loads that deliver 251 to 450 miles from a market.
- Darker shades of blue indicate the markets with the most freight.
- Lighter shades of blue indicate the markets with lower freight volumes.
- Local/city, short-haul, tweener, and long-haul loads can also be viewed on a U.S. Map
2) View MOTVI on a Tree Map to see all 135 markets in an order that identifies the largest markets down to the smallest markets.
- Markets located in the top left corner represent the largest markets by volumes.
- As you move down and to the right from the top left corner, markets decline in volume.
- Markets located in the bottom right corner represent the smallest markets by volume.
- Markets shaded green have increased in volume from the previous day.
- Markets shaded red have decreased in volumes from the previous day.
Pro Tip: Use your SONAR OTVI length of haul indices in conjunction with OTRI length of haul indices to understand both volumes, and rejection rates based on the distance a load travels from a market.