The highlights from Tuesday’s SONAR reports are below. For more information on SONAR — the fastest freight-forecasting platform in the industry — or to request a demo, click here. Also, be sure to check out the latest SONAR update, TRAC — the freshest spot rate data in the industry.
Lane to watch: Atlanta to Dallas
Overview: Carriers continue to be more accepting of loads.
Highlights:
- Carriers are rejecting 8% of inbound Dallas dry van loads, compared to a 9.4% national dry van tender rejection rate.
- Domestic intermodal volume averaged 405 containers per day in the past week in the lane, 6% below the 430-unit-per-day average during the first half of April.
- The Class I railroads cut the door-to-door domestic intermodal rate from $4.09 a mile at the end of March to $3.29 a mile. That lower rate is still above the dry van spot rate of $2.73 a mile, as shown in SONAR Market Dashboard. All rates include fuel.
What does this mean for you?
Brokers: Brokers should continue to lower their bids to preserve margins. SONAR Market Dashboard shows that the average rate that dry van carriers are willing to accept in the lane has fallen 12.5% in the past month to $2.73 a mile, inclusive of fuel.
Carriers: Carriers will likely want to accept tenders given Dallas’ status as a headhaul market – its Van Headhaul Index is 77, indicating there is more outbound than inbound freight. Van carriers are only rejecting 7.3% of outbound van tenders, which indicates there will not be a lot of spot activity at your destination. However, contract rates likely remain priced at a high level based on national van contract data contained in SONAR.
Shippers: Spot shippers should use the highway. Also, the recent decline in intermodal volume in the lane may suggest a slowdown in demand and/or contract shippers opting to use the highway if they are experiencing substandard intermodal service levels.
Watch: Carrier update
Market to watch: Ontario, California
Overview: Surging short-haul volumes are driving demand growth out of Ontario.
Highlights:
- Tender volumes for loads moving less than 100 miles (COTVI) have jumped 15% over the past week.
- Tender volumes for loads moving more than 450 miles (TOTVI and LOTVI) are down more than 25% over this same time last year.
- Rejection rates for the Ontario market are below 3%, with tweener loads (450-800 miles) averaging the highest rejection rate at around 4.3%.
What does this mean for you?
Brokers: Do not expect the recent uptick in demand to have a significant impact on spot rates or volumes out of SoCal. Most activity is shifting to shorter lengths of haul; regional carriers will fare the best.
Carriers: Expect shorter-haul freight to dominate Southern California for the time being. This is relatively seasonal, but it appears that shippers are holding more freight upstream in their supply chains as regional warehouses are filled. Expect more volumes flowing into secondary facilities away from the ports into oversupplied markets like Stockton, California, and Phoenix.
Shippers: Continue to expect improving conditions out of Ontario save for lanes like Chicago, where rail congestion is inhibiting service. Monitor tender rejections on lanes out of Ontario on a tree map to see when you might expect disruption.
Watch: Shipper update
Lane to watch: Houston to Nashville, Tennessee
Overview: Low spot market, low tender rejections – an ideal time for shipping out of Houston.
Highlights:
- The current spot rate is $2.84 per mile, which is the lowest in 30 days. However, over the past month rates haven’t deviated more than a few cents from $2.85 a mile.
- Nashville is almost at a perfect load balance with a headhaul score of -3.21. It is ever so slightly maintaining favor to inbound loads over outbound loads.
- Houston is slowly trending upward on the outbound tender rejection index to 6.69% after plummeting over 3% last week.
What does this mean for you?
Brokers: Spot rates haven’t changed that much in the past month. The average has stayed within the same 5 cents or so. While outbound tender lead times are over three days for Houston, the spot market isn’t horrible, indicating this is not a lane to put priority coverage on, especially with an outbound load.
Carriers: Houston has significant outbound tender volumes; however, the outbound tender rejection index does signal that rates will favor contracted rates instead of the spot market. Focus on gaining outbound volumes from this market as inbound loads are more than plentiful with a headhaul index of -59.78.
Shippers: With outbound tender volumes high in Houston (but not in relation to the inbound volume), now is a good time to put some extra volume out in the Houston market. There is an imbalance of inbound loads, so any outbound loads at a fair price should have no problem being covered quickly.
