The highlights 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. Also, be sure to check out the latest SONAR update, TRAC — the freshest spot rate data in the industry.
Lane to watch: Pittsburgh to Dallas
Overview: Capacity is likely to tighten and put significant upward pressure on spot rates.
Highlights:
- Pittsburgh outbound tender volumes are up 10% w/w, signaling that demand for capacity is increasing.
- The Headhaul Index in Pittsburgh is up 24% w/w, signaling that capacity is likely to tighten.
- Pittsburgh outbound tender rejections are already up 494 bps w/w but are likely to move higher due to tightening conditions.
What does this mean for you?
Brokers: You are likely to see capacity tighten in the days ahead. Already, outbound tender rejections are up 494 bps w/w. The increase of 24% w/w in the Headhaul Index has been driven primarily by a decrease in inbound volumes, which is signaling that this growing imbalance in volumes could cause a significant tightening of capacity. With these conditions, expect upward pressure on spot rates.
Carriers: This Pittsburgh market’s pricing power is shifting back into your favor as outbound tender rejections indicate significant tightening in capacity in the days ahead. With shippers and brokers likely already feeling the pressure, try to stay firm on your rates and capitalize on your spot market opportunities as outbound volumes rise.
Shippers: Your shipper cohorts in Pittsburgh are averaging 2.8 days in tender lead times, but if the Headhaul Index continues to increase, you will need to extend your tender lead times to between 3.5 and 4 days to ensure that you are able to source capacity effectively during these tightening conditions.
Watch: Industry Update
Lane to watch: Milwaukee to Atlanta
Overview: Milwaukee rejection rates bounce off their annual low.
Highlights:
- Milwaukee’s outbound tender rejection rate has risen to over 20% over the past week after hitting an annual low of around 15% early in the month.
- Rejection rates to Atlanta have moved similarly and continue to be well above the national and market average. FreightWaves TRAC spot rates for van loads increased from $4.09 to $4.15 per mile over the weekend.
- Atlanta’s outbound rejection rate has been surprisingly stable over the past week as the Christmas holiday approaches, hovering around 16%.
What does this mean for you?
Brokers: Pad margins in this lane and make outbound Milwaukee loads a higher priority to start your week. Take any rates below $4 per mile.
Carriers: Do not expect as much upward pressure on spot rates out of Atlanta. Atlanta’s outbound rejection rates are below the national average and are very stable. Divert more capacity to the spot market in this lane.
Shippers: Expect lower compliance in this lane this week, especially if contract rates are well below $4 per mile. Read the broker advice if shopping the spot market for good rates.
Watch: Are we seeing peak season performance?
Lane to watch: Memphis (Tenn.) to Columbus (Ohio)
Overview: Capacity ratchets tighter in Memphis as rejection rates rise.
Highlights:
- Rejection rates have increased by over 370 bps during the past week in both Memphis and Columbus.
- The Headhaul Index (HAUL) in Memphis has increased by 4% w/w, signaling that capacity is likely to continue tightening during the next week.
- FreightWaves TRAC rates are off the highs established over the past six months but have hovered around $3.63/mi for the past month.
What does this mean for you?
Brokers: Focus on getting loads outbound from the Memphis market earlier in the week before spot market activity increases around the Christmas holiday.
Carriers: Take advantage of higher rates leaving the Memphis market, because in the Columbus market changing load balance is likely to lead to diminished spot market activity, thus lower rates out of Columbus.
Shippers: Expect disruptions to carrier networks as rejection rates in Memphis have continued to climb higher over the past week. Focus on fair pricing to secure the necessary capacity during the holiday week. Also, extend lead times if possible to give ample time to secure capacity.
Focus on … Long-haul Inbound Tender Rejection Index
The Long-haul Inbound Tender Rejection Index (LITRI) shows carriers are not accepting loads that travel more than 800 miles into parts of the Mountain West with more frequency than many others.
Smaller markets like Fayetteville, Raleigh and Montgomery also have some of the highest current LITRI values in the U.S.
Looking at inbound rejection rates for long-haul loads gives insight into where rates will have the strongest upward pressure from a destination standpoint.
These markets tend to be lower volume or challenging to traverse because of weather or terrain.
