The highlights from Wednesday’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: Kansas City (Mo.) to Jacksonville (Fla.)
Overview: Capacity is loosening in Kansas City, putting downward pressure on spot rates.
Highlights:
- Kansas City outbound tender rejection rates are currently at 27.38% and falling, while outbound volumes are rising (but not to record levels).
- FreightWaves TRAC spot rate is $3.72 and trending downward. While it might not be the lowest rate for the last 30 days, it should stay in this range for a while.
- Jacksonville’s outbound tender rejection rates and tender volumes are both falling, which signals capacity is loosening in the market.
What does this mean for you?
Brokers: Capacity is loosening in Jacksonville; as a result spot rates will continue downward. Press carriers to give a fair and accurate rate, but watch for a sudden change in the market, which could result in spot rates increasing suddenly.
Carriers: Loads are almost balanced in the Kansas City market, while capacity is loosening in Jacksonville. Hold firm on rates as Jacksonville works to increase the imbalance of outbound and inbound loads, currently favoring inbound loads.
Shippers: Rates are in a solid range, not what they were in the beginning of the month. Heading into month-end, keep tender lead times out to 3 days or more. Kansas City should reach its highest outbound tender lead times for the past 30 days with 3 days and Jacksonville is hovering around 3.5 days.
Watch: Carrier Update
Lane to watch: St. Louis to Columbus (Ohio)
Overview: Rejection rates pop back up out of St. Louis.
Highlights:
- As another round of weather hit the market, St. Louis’ outbound rejection rate jumped back above 23% after falling to near 20% last week.
- Rejection rates to Columbus have been on a long, slow downward trend since last year, falling 4.5 percentage points since mid-September. Spot rates have increased nearly $0.40 per mile to $4.73 over that period of time.
- Columbus’ outbound rejection rate is falling after a turbulent winter, hitting its lowest value since November.
What does this mean for you?
Brokers: Expect rates to be flat to slightly higher in this lane this week with rates below the $4.70 per mile mark considered a win. Watch for increasing spot activity out of St. Louis.
Carriers: Look for lucrative moves in this lane this week. Now is the time to target the St. Louis market for long-term accounts with rejection rates continuing to move well above the national average. Expect some slight easing in the Columbus market.
Shippers: Keep lead times extended in this lane and keep the route guide deep out of the St. Louis market. This is a lane that you should consider a rate increase if compliance rates have been below 30%.
Watch: Shipper Update
Lane to watch: Chicago to Atlanta
Overview: Dry van carriers should seek out loads heading to a tighter market before accepting tenders to Atlanta.
Highlights:
- SONAR’s Market Dashboard shows an average dry van spot rate in the lane of $4.22/mile, including fuel surcharges, which is at the low end of the range for the past month.
- The elevated door-to-door intermodal spot rate ($3.76/mile, including fuel) and the lack of empty containers moving in the lane highlight a lack of excess intermodal capacity.
- The Atlanta van outbound tender rejection rate is 12.7%, well below the national van tender rejection rate of 18.1%.
What does this mean for you?
Brokers: When negotiating with carriers reluctant to head to Atlanta given its below-average outbound tender rejection rates, highlight the Atlanta Van Headhaul Index of 33, which suggests that it should be easy for carriers to get reloaded in Atlanta.
Carriers: Before accepting tenders to Atlanta, carriers may want to first look for loads to a tighter freight market. The 12.7% van tender rejection rate on loads leaving Atlanta suggests there will be relatively few opportunities to move highly rated loads on the spot market.
Shippers: The 11% difference between intermodal and dry van spot rates may not be enough to entice shippers to use rail intermodal in light of ongoing difficulties with sourcing intermodal containers in Chicago. Keep dry van lead times extended past the 2.7-day average for inbound Atlanta loads since some carriers may be reluctant to head there.
Ocean snapshot: Los Angeles to East Asian ports
Overview: Vessel delays and port congestion continue to put upward pressure on container spot rates.
- Outbound twenty-foot equivalent unit volumes from Los Angeles to Japanese ports are at their highest levels since the index started Jan. 1, 2019.
- Ocean carriers are currently declining just over 12% of booking volumes (highest levels since April 2021) to East Asian ports, signaling that capacity is likely tightening.
Focus on … Reefer Outbound Tender Reject Index
The Outbound Tender Volume Index (OTVI) has had its worst week of the year to-date, falling by 4.6% week-over-week (w/w). The decline in OTVI is widespread as shown in the map below.
The Outbound Tender Volume Index – Weekly Change (OTVIW) shows the w/w changes in tender volumes across SONAR’s 135 markets.
In the map below, the red and white markets indicate where tender volume growth turned negative w/w, while the blue markets indicate positive volume growth w/w. Volume levels have picked up out of Detroit and Elizabeth, New Jersey, increasing by 6.15% and 1.4% w/w, respectively.
Volume levels in other large markets like Ontario, California, and Chicago experienced volume declines greater than the overall index, falling 9.5% and 9% w/w, respectively.
