The highlights from Thursday’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.
Lane to watch: Elizabeth, New Jersey, to Indianapolis
Overview: The Northeast is showing signs of easing.
Highlights:
- Average spot rates have fallen 10 cents per mile to $3.25 in this lane since the end of February, with a relatively narrow range from high to low.
- Elizabeth’s outbound tender rejection rate has fallen from 17.3% on March 2 to 15.2%, with lane-specific rejection rates to Indianapolis falling from 22.4% to 20.67% over the same time frame. Demand is increasing, however.
- Indianapolis’ outbound tender rejection rate has dropped from 28.9% on Feb. 7 to 22.3% with relatively stable demand.
What does this mean for you?
Brokers: Target buy rates below $3.25 per mile in this lane and look for increasing volume. Rates moving out of the Northeast are starting to settle, which should allow you to expand margins more easily.
Carriers: Expect easing capacity in the Northeast and rely less on spot market volumes out of Elizabeth. Contract demand is growing out of Elizabeth, however, which should help supplement the loss of spot volume, though at a lower rate. Indianapolis is also starting to ease, although rejection rates are well above the national average.
Shippers: Expect slowly improving conditions in this lane with compliance rates on the rise. Keep lead times high as spot rates will continue to be inflated over where they were to start the year.
Watch: Shipper Update
Lane to watch: Savannah, Georgia, to Allentown, Pennsylvania
Overview: Spot rates are likely to rise as the Headhaul Index increases 14% w/w.
Highlights:
- After hitting its lowest point since the beginning of the year, the Headhaul Index in Savannah is up 14% w/w and is very likely to climb further in the weeks ahead as import volumes convert to the truckload market.
- Outbound tender volumes in Savannah are up 2% w/w, signaling that demand for outbound capacity is increasing.
- Outbound tender rejections are up 231 basis points (bps) w/w, confirming that capacity in the Savannah market is already tightening significantly.
What does this mean for you?
Brokers: The Port of Savannah has been receiving significant maritime import volumes for months, and this increased volume is likely to continue putting pressure on capacity just as the harvest season arrives. With volumes increasing out of Europe to the East Coast, Savannah is likely to continue this trend in the weeks ahead. Get your loads tendered out further in advance and notify your team that they will likely need to price freight higher coming out of this market.
Carriers: Stay firm on your rates, as we are likely to see the 14% increase in the Headhaul Index cause capacity to tighten even further in the days ahead. Outbound tender rejections are already up 231 bps w/w, so if they rise even higher, the upward pressure should increase on spot rates.
Shippers: Your shipper cohorts currently have tender lead times at 2.2 days, signaling that many shippers are not likely anticipating a tightening of capacity in the days ahead. Outbound volumes may have been slower to increase than expected; however, due to the increased import volumes that have arrived at the Port of Savannah, it would be wise to go ahead and push lead times to between three and three-and-a-half days.
Watch: Carrier Update
Lane to watch: Detroit to Nashville, Tennessee
Overview: Capacity is loosening in Nashville, causing spot rates to fall.
Highlights:
- Spot rates are just under $4 per mile and continue to fall as capacity loosens in Nashville.
- Outbound tender rejections in both markets are in line with the national average. Detroit is at 13.14% and Nashville is at 16.29%; the national average is 17.76%.
- Detroit has a higher number of inbound loads over outbound and continues to widen the spread.
Brokers: Capacity is loosening in Nashville, making it an ideal city to book loads in at the moment. Spot rates are dropping, so shoot for the $3.75/mile rate to protect margin. Run what you can now before rates flip and start to creep back up.
Carriers: Spot rates are loosening; hold firm on rates to protect yourself. Outbound rejections in both markets are running parallel to the national average, so having extra trucks in either market wouldn’t be the end of the world, but don’t prioritize moving trucks to the area. Start to look for some contract rate lanes to run as spot rates deflate.
Shippers: Outbound tender lead times in Detroit are firmly above three days. Stay at a minimum of three days to avoid paying inflated spot rates. While spot rates are low, it would be OK if tender lead times went under three days. However, beware of a turn in spot rates if that’s the plan. Don’t get stuck paying a premium.
