Trucking News: Freight Economy Rebound May be Underway. Carrier Bankruptcies and Unseated Trucks will Drive Next Spot Rate Surge.

Mike

Well-Known Member
The freight economy has been completely turned upside down by the COVID-19 shutdown. Initially, the industry experienced a massive surge of freight demand in response to demand for consumer packaged goods and groceries.

The build-up to the climax that started on February 21, 2020 took 31 days before it peaked on March 23, 2020. But with much of the economy going into lock-down, the surge was short-term. The drop back to the pre-COVID surge took just 16 days, almost half the time the freight economy experienced elevated volumes.

This past week, I suggested that the market bottom was close and that we would see an acceleration in volume over the coming weeks. My reasons were simple, and based on a key point – the economy is about to restart.

I made the call on April 14, 2020, when OTVI was at 8,763. At the time, the drop in freight demand had not stopped, but the slope had. My logic was that the parts of the freight economy that were likely to be shut down had already been and the sentiment had shifted from panic about the virus to people talking about restarting the economy. The drop in OTVI continued for a few days, but ended up finding a bottom at 8,439 on April 16, 2020.

 

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