SONAR sightings for Feb. 25: 3 lanes to watch, Headhaul Index, more

Shippers: There is plenty of excess intermodal capacity in the lane, which is shown most clearly in SONAR with the 101 empty domestic containers that moved each day in the lane, on average, in the past week. But, dry van capacity is also not as tight as most lanes, so shippers may still want to use the highway since it should be easy to get loads covered at a reasonable rate. 

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Watch: Shipper Update

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Lane to watch: Dallas to Cincinnati

Overview: No change in capacity combined with consistent spot rates makes this a good lane to run. 

Highlights:

• Dallas has a Headhaul index of 138.83, indicating there is an overwhelmingly greater number of outbound loads in relation to inbound loads. 
• The FreightWaves TRAC spot rate is $2.67, and it has held at that rate for the past few weeks. This is the lowest rate over the past month.
• Cincinnati’s outbound tender volumes and its outbound tender rejections have leveled off. The rates have become nothing if not consistent. 

What does this mean for you?

Brokers: This lane has settled into an extremely consistent rate. Over the last two weeks the rate hasn’t changed more than $0.10 in either direction. Continue to price this lane as is, but be wary of a sudden change in outbound tender rejections that signals a change in rates.

Carriers: Load balance is tight in this lane. Consistency is key and the rates reflect that. Dallas has a heavy skew to outbound loads. Use that as a way to get trucks into markets with tighter capacity and target those more lucrative moves. 

Shippers: Outbound tender lead times are averaging about 2.5 days in both markets. This lane has been rock-steady on rates, so now is a good time to look at service metrics. Get new carriers in to replace failing ones or review performance scorecards with existing carriers as  rates aren’t likely to change in the near-term.

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Watch: Carrier Update

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Ocean lane to watch: All import lanes into Port of Charleston (S.C.)

Overview: Volumes to major East Asian ports are on the rise, but capacity is still relatively loose.

Highlights:

• Inbound twenty-foot equivalent unit (TEU) volumes from all ports of lading to the Port of Charleston (as the Port of Discharge) are at their highest levels since May 2021. 
• TEU volumes have been declining between 8-9% on ocean carriers headed to the Port of Charleston, which are some of the highest levels for the past two years.
• Weekly import shipments reported by U.S. Customs reached a new all-time record for shipment volume handled in one week’s time via the Port of Charleston.

What does this mean for you?

Brokers: If you are looking to move ocean containers with the Port of Charleston as the Port of Discharge, be aware of the potential delays that could arise. With container volumes still booming from most major origins for U.S. imports via the Port of Charleston, you can expect that capacity is likely to remain relatively tight on these lanes. However, volumes are forecasted to ease in the coming week, so capacity should begin to loosen as volumes recede.

Carriers: Pricing power on these lanes has shifted further in your favor over the last couple of months as many importers have chosen to try and bypass port congestion through the ports of Los Angeles, Long Beach and Savannah by rerouting cargo through Charleston. These volumes are expected to remain strong for another week, but will likely begin to normalize soon thereafter.  

Shippers: If you have been attempting to reroute your cargo through the Port of Charleston to bypass congestion at other U.S. ports, then you are not alone. Unfortunately, however, this shift in volumes has caused congestion at the Port of Charleston to reach record levels. If you have the opportunity to shift your cargo back over to the Port of Savannah, that would be recommended as congestion is beginning to ease quicker than what is forecasted for the Port of Charleston.

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Watch: Freightonomics

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Focus on … Headhaul Index

No freight market in the country is perfectly balanced, but understanding how the imbalances are changing is important to understand how capacity conditions are changing.

The Headhaul Index – Weekly Change (HAULW) signals where freight imbalances are changing rapidly on a weekly basis, which directly impacts capacity moving forward.

Dallas is currently the largest headhaul market in the country. It experienced a HAUL increase of 30% over the past week, driven both by an increase in outbound volume and a decline in inbound volume. These changes will likely cause a temporary squeeze in capacity throughout the next week.

In Harrisburg, the 45% decline in HAUL over the past week was driven by positive inbound volume growth and a slowdown in outbound volumes, which will likely lead to increased available capacity in the coming days.