The highlight reel from Monday’s SONAR reports. For more information on SONAR — the fastest freight-forecasting platform in the industry — or to request a demo, click here.
Lanes to watch
By Zach Strickland, director, Freight Market Intelligence
CHICAGO to MEMPHIS
Overview: Reefer carriers average $4.53 all-in on the CHI–MEM lane as capacity tightens in Chicago.
Highlights:
- Reefer carriers averaged $4.53 all-in rpm on the CHI–MEM lane last week, but rejection rates have since increased to 32.34% in the Chicago market.
- Reefer market conditions have tightened in the Memphis market, pushing reefer rejection rates up to 47.50%.
- Memphis shippers feel pressure in the reefer market and increase tender lead times to 4.05 days.
What does this mean for you?
Brokers: The demand for reefer equipment has increased in the Chicago market, which has pushed carrier rates up on several lanes out of the Chicago market. Brokers should search the spot market for freight that runs across the CHI–MEM lane, increasing their bids since reefer rejection rates climbed up to 32.34% over the past few days. Keep downward pressure on carrier rates. Memphis will be a strong destination market for reefer carriers since rejection rates have increased to 47.50%.
Carriers: Reefer carriers with excess capacity in the Chicago market should search the spot market for reefer loads that deliver into the Memphis market. Carriers averaged $4.53 all-in rpm last week on the lane, but reefer capacity has tightened in Chicago and rejection rates have increased to 32.24%, allowing carriers to increase their bids for on-demand capacity. The Memphis market is also tight on reefer capacity with rejection rates at 47.50%, which will allow carriers to find strong rates on the spot market for outbound Memphis loads.
Shippers: Memphis shippers need to continue to increase reefer tender lead times as market conditions tighten in the market. Monitor freight volumes, headhaul index, and rejection rates for shifts that would allow you to push carrier rates back down. Secure capacity as early as possible and avoid the high costs for on-demand capacity. This trend could last for the next several weeks as we enter the holiday shipping season.
ALLENTOWN (Pennsylvania) to CHICAGO
Overview: Capacity is likely to tighten significantly over the next month.
Highlights
- Allentown outbound tender volumes are up 2.7% w/w, signaling that demand for capacity is increasing slightly.
- The Headhaul Index in Allentown is up 30% w/w, signaling that capacity is likely to tighten.
- Allentown outbound tender rejections are already up 150 bps w/w, also signaling that the capacity is likely to tighten as well.
What does this mean for you?
Brokers: Allentown outbound capacity has considerable room to tighten further, and we are likely to see rejections increase through the most important month to two months for the holiday retail season. Be sure to keep an eye on outbound tender rejections because that will be one of the best proxies for a significant tightening in the market. Already, rejections are up 150 bps, so be sure to prioritize your outbound Allentown freight.
Carriers: Allentown pricing power is shifting even further in your favor as the large surge of over 30% in the Headhaul Index is likely to cause a significant tightening of capacity. This will be especially true in the lead up to the end of the month and the arguably the most important month for truckload transportation.
Shippers: Your shipper cohorts in Allentown are still averaging 2.9 days in tender lead times, but it is highly recommended to push those out to between 3.5 and 4 days. You are likely to experience a significant tightening in capacity this month as “Black Friday” approaches.
ELIZABETH (New Jersey) to GREENVILLE (South Carolina)
Overview: Elizabeth outbound rejection rates bounce.
Highlights
- Elizabeth’s outbound rejection rate has jumped from 17.98% on Oct. 27 to 19.82% in a matter of days, indicating rapid deterioration.
- Lane specific rejection rates to Greenville are a large part of that as they have also increased rapidly from 18.5% to 20.7% over the same time.
- Greenville conditions are easing as rejection rates have hit their lowest levels since early July. Inbound demand has increased significantly while the outbound wanes.
What does this mean for you?
Brokers: Increase priority on outbound Elizabeth loads to start your week, making this lane one of the higher priorities. Expect upward pressure on rates as carrier willingness and availability drop.
Carriers: Divert more capacity to higher priced spot market loads in this lane as capacity loosens in Greenville. Less outbound demand will mean lower reload potential.
Shippers: Increase lead times over three days in this lane if possible. If capacity is consistently needed and compliance rates are below the market average of 80%, consider offering a seasonal rate increase to get better coverage.
Transportation Update
Update on … Reefer Index
By Zach Strickland
The national average for reefer outbound tender rejection rates has climbed back up to 36.77% as capacity tightened just before the end of October. Historically, reefer rejection rates trend upward during the month of November, indicating that carriers will be increasing spot rates for on-demand capacity over the next few weeks.
Shippers in the Fargo, Little Rock, Twin Falls, Cedar Rapids, Pendleton, Indianapolis and Fayetteville markets are struggling with reefer rejection rates over 60%, and over reefer rejection rates are over 50% in the Dubuque, Des Moines, Joplin, Rock Island, Kansas City, Tulsa, Jefferson City, Columbia, Omaha, Sioux Falls, Savannah and Nashville markets.
Carriers will find the most opportunities for reefer freight in the Ontario, Atlanta, Indianapolis, Joliet, Fresno, Chicago, Allentown, Harrisburg, Twin Falls, Lakeland, Fort Worth and Fargo markets, which are the largest reefer markets by volume in the nation at this time.
