The highlights from Friday’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.
Van tenders vs. loaded 53-foot intermodal container volume, month-over-month change
Overview: Dry van demand falls as domestic intermodal remains stable — at least for now.
Highlights
- Seven of the eight major outbound freight markets shown above have experienced a decline in demand to move dry van loads outbound in the past month. Declines have been as large as 15% month-over-month (m/m).
- Meanwhile, domestic intermodal volume is mixed and relatively stable in the same markets, ranging from a -3% to a +1.8% m/m change.
- Atlanta and Elizabeth, New Jersey, have shown the greatest variance between outbound dry van demand and domestic intermodal volume (down 15% and 14%, respectively, in the past month), amid flat domestic intermodal volume.
What does this mean for you?
Brokers: Brokers should lower their bids for dry van capacity on loads outbound from the major markets. With intermodal congestion easing and shippers placing less emphasis on speed, brokers should consider using rail intermodal for sourcing capacity on a larger portion of loads.
Carriers: The recent intermodal outperformance suggests that shippers are placing less emphasis on the speed of service in the densest freight lanes as inventory levels have grown. Carriers may want to reposition equipment to markets where they don’t have to compete with intermodal and may want to step-up efforts to align themselves with shippers that offer consistent volume since the truck demand downturn is widespread.
Shippers: The relative stability in domestic intermodal volume suggests that other shippers are currently finding value in the domestic intermodal value proposition given current service levels. That may be particularly true in the outbound Elizabeth and outbound Atlanta lanes.
Watch: Carrier update
Lane to watch: Allentown, Pennsylvania, to Atlanta
Overview: Spot rates decline amid falling outbound tender rejections and tender volumes from the Allentown market.
Highlights:
- Spot rates continue to trend downward but remain volatile as rates hover between $2.58 per mile to $2.96 per mile, with an average rate of $2.76 per mile.
- Outbound tender rejections from the Allentown market rapidly fell across the board, falling from 15.50% to 11.92% in the past seven days.
- Outbound tender volumes remain volatile but falling, declining from 380 bps to 332.2 bps (after briefly falling below 321.64 bps on March 11).
What does this mean for you?
Brokers: The rate volatility coming from Allentown will benefit brokers with an extensive carrier routing guide, as greater capacity in the market and declining volumes are driving down rates. Margin performance will heavily favor brokers with better internal buying power; knowing where to buy cheaper capacity will be rewarded in margin per load. With outbound tender rejections declining across the board, there is the opportunity to try and solicit new customers that are seeking savings if their characteristics complement your existing carrier base.
Carriers: Declining outbound tender rejections and volumes will continue to drive down spot rates as greater trucking capacity competes for fewer loads. For contracted rates, these declines might mean fewer loads tendered based on customer characteristics and a greater focus on service as both brokers and customers will take advantage of greater trucking competition. Focus on securing and managing committed freight coming out of Allentown and adjust spot rates accordingly if attempting to find inbound loads.
Shippers: The declines in freight volumes paired with increased trucking capacity in the market will provide greater transportation cost savings and put more pressure on carriers to service their tendered load commitments. Focus on improving your routing guides as more carriers should be reaching out for freight now that volumes are declining. An in-depth internal routing guide will lead to greater cost savings as some carriers may have their networks impacted by lower freight volumes nationwide and create an opportunity for service with other providers.