The highlights from Thursday’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: Memphis to Atlanta
Overview: Spot rates have held steady around a $3.97 all-in rate per mile on the MEM–ATL lane, but return rates have increased to a $3.04 all-in rate per mile.
Highlights:
- Spot rates remain volatile on the MEM–ATL lane, enabling carriers to increase their rates well above the national spot rate average.
- Average return rates on the ATL–MEM lane have increased to a $3.04 all-in rate per mile, allowing carriers to average around a $3.50 rate per mile on the round-trip lane.
- Memphis shippers have increased dry van tender lead times to 2.78 days as rate volatility increases in the market.
What does this mean for you?
Brokers: Contact your Memphis shippers to see what lanes they have available this week. Increase your bids, but keep downward pressure on carrier rates since the national average for spot rates is in decline.
Carriers: Carriers with inbound Memphis trucks should search the spot market for loads that run between Memphis and Atlanta. Bid the loads above a $4.20 all-in rate per mile, and let your shipper negotiate your rate down slightly. Search for a return load before your truck arrives in the Atlanta market.
Shippers: Both Memphis and Atlanta shippers need to keep dry van outbound tender lead times extended while market conditions continue to deteriorate. Keep downward pressure on carrier spot rates, and secure capacity as early as possible.
Watch: Carrier update
Lane to watch: New Orleans to Chicago
Overview: Spot rates rise as outbound tender rejection levels surge from the greater New Orleans market.
Highlights:
- Spot rates continued to rise over the past month, from an average of $2.73 per mile on May 1 to $2.97 per mile on Wednesday. This is the first upward movement since rates declined from a six-month average high of $3.22 per mile at the end of February.
- Outbound tender rejection levels from New Orleans to Chicago continue to outperform the overall New Orleans market. NOLA to CHI outbound tender rejections have remained steady around 9% for the past 30 days while the overall outbound New Orleans market increased from 14% to 33.82%.
- New Orleans outbound tender volumes have been volatile, but there has been a surge in the past seven days, with volumes climbing from 90 basis points (bps) on May 23 to 119.65 as of Wednesday.
What does this mean for you?
Brokers: The overall New Orleans market is seeing a rapid rise in outbound tender rejections relative to the New Orleans to Chicago lane. That indicates one of two things — the Chicago lane remains a favorable lane for carriers or New Orleans outbound load volumes are surging to different locations. Use rising spot rates to quote ad hoc loads higher and focus on targeting return loads to Chicago and Midwestern carriers that might be drawn to New Orleans due to rising volumes and rejections.
Carriers: The rapid rise in outbound tender rejection volumes from the New Orleans market is perplexing. While hurricane season officially began Wednesday, there appear to be no immediate weather-related causes for this decline in capacity. This appears to indicate that a possible rise in rejections may be related to spring/summer surges from large-volume customers in the market, as the substantial contract tender rejection increases have not materialized in major upward spot market movement. Now that one of three loads are being rejected from the New Orleans market, there is an opportunity to solicit large-volume customers and attempt premium ad hoc rates before they attempt to solicit on the broader spot market.
Shippers: An overall outbound tender rejection level of 33.82% is expected to cause localized service disruptions due to lack of available capacity to cover the increase in truckload demand. Expect to utilize all parts of the routing guide if your primary and secondary carriers cannot commit to the increases in volume or are being pressured by other customers to divert capacity.
