The highlights from Tuesday’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.
In a recent change of the traditional way of doing things through SONAR Sightings with lanes to watch, there will be a slight alteration in the presentation of the data. It will begin with a market to watch then branch off to lanes to watch out for in regard to that market. The goal in mind is to place carriers, brokers and shippers in the markets that will benefit them most.
Market blowup
In many ways, Atlanta is the heartbeat of the Southeast. It is the most populous city in the region and also a powerhouse for outbound freight volume.
Atlanta produces 3.9% of the overall outbound volume in the United States. To put that into perspective; Ontario, California, owns the most market share in terms of outbound volume with 4.2%.
The Outbound Tender Rejection Index for Atlanta has climbed roughly 300 basis points (bps) in the last eight days to reach 10.9% overall. Note that the national average for rejections is 7.9%.
This rise in rejections puts upward pressure on spot rates coming out of Atlanta just in time for the end of the second quarter and the Fourth of July holiday.
Watch: Carrier update
NTI as a point of reference
The National Truckload Index is a daily look at how spot rates in specific lanes hold up in comparison to the national average, giving carriers and brokers an idea of which lanes to gravitate toward or avoid.
Lane to watch: Atlanta to Baltimore – $3.46 per mile – 688 miles
With the rise in rejections out of Atlanta, carriers are capitalizing on their pricing power to increase rates. But keep your eyes open for loads going into the Northeast, specifically Baltimore. Harrisburg, Pennsylvania, is a destination to keep a look out for as well.
After experiencing a bit of dip through the month of May, spot market rates in this lane are back up to only 6 cents less than they were at the beginning of April. In two transit days up the East Coast, carriers can make 26 cents above the national average for spot rates.
Once at the end of the road in Baltimore, booking a load coming out has become easier due to the recent increase in volume. Outbound volumes are up 10.3% week-over-week (w/w), causing rejection levels to surge in the past seven days from 378 bps to 13.2% and providing pricing power when booking a load on the way out.
It is important to note the size of the Baltimore market is much smaller than one like Atlanta, causing these changes in volumes and rejection rates to present more significantly. Baltimore does, however, own just more than 1% market share in the United States for overall volume.
This tightening of capacity from the increase in tender rejections will allow carriers to take advantage and put upward pressure on spot market rates coming out of Baltimore.
Chart of the week: Diesel Truck Stop Actual Price Per Gallon compared to Ultra Low Sulfur Diesel Rack
As the price of diesel fuel gains attention, let’s take a look at the actual price compared to what enterprise and large fleet carriers are paying.
The cost of diesel fuel, as updated in FreightWaves SONAR today, is at $5.82 per gallon — almost a 30-cent increase in the month of June alone.
However, large and enterprise fleets have contracts negotiated with fuel stations to purchase fuel at the wholesale price — also known as the rack price. That’s understandable, considering these larger carriers have multiple trucks fueling up every day at any of the locations across the country.
But here’s the catch: These larger carriers charge the fuel surcharge on their rates associated with the actual price of diesel fuel, not their contracted rate for fuel, allowing the difference between the two to become pure profit in the pockets of the carriers.
