SONAR sightings for March 11: Chicago to Dallas, shipper update, more

The highlights from Friday’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: Savannah, Georgia, to Allentown, Pennsylvania

Overview: Spot rates are likely to rise as the Headhaul Index increases 14% w/w.

Highlights:

What does this mean for you?

Brokers: 
The Port of Savannah has been receiving large 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 slow to increase due to the increased import volumes that have arrived at the Port of Savannah, but it would be wise to push your lead times to between three and three-and-a-half days.


Watch: Shipper Update


Lane to watch: Chicago to Dallas

Overview: As intermodal volume rises, carriers increase intermodal spot rates to protect capacity for contracted shippers.

Highlights:


  • The intermodal spot rate to move 53-foot containers door-to-door increased 15.5% in the past week to $3.53 a mile, including fuel, the highest level since November.
  • The loaded domestic intermodal volume average of 414 containers per day in the past week is at the high end of its range over the past two years.  
  • Both the average dry van spot rate shown in SONAR Market Dashboard ($2.90/mile, including fuel) and the Truckstop.com dry van spot rate ($3.14/mile, including fuel) are below the latest intermodal spot rate.  

What does this mean for you?

Brokers: 
You may want to lower your bids in this lane given that inbound Dallas van tender rejection rates have declined from nearly 19% at the beginning of the month to 15.5% and the average spot rate that other brokers are paying for on-demand highway capacity in the lane has declined 11% in the past month (from $3.27/mile to $2.90/mile).   

Carriers: 
Accepting tenders to Dallas will take you to a market where it should be very easy to get reloaded given Dallas’ Van Headhaul Index of 93. Carriers should note, however, that the Dallas market is not as tight as most given its van outbound tender rejection rate of 14%, compared to a 17.4 % national van tender rejection rate.  

Shippers: Intermodal volume has increased in the late, but appears to be hitting a plateau, which may indicate that intermodal is bumping up against capacity constraints. The now-elevated intermodal spot rates indicate that carriers are protecting capacity for shippers with contracts and spot shippers should use the highway for the best rates and service levels. 


Watch: Carrier Update


Lane to watch: Ontario, California, to Denver

Overview: Spot rates are at historic lows; it’s shipping time.

Highlights:

  • Ontario’s outbound tender rejection rate is the lowest level in over six months. It fell 2% in the last week alone, for a current rate of 6.88%.
  • Denver’s outbound tender volumes are trending upward at a steady pace. 
  • The FreightWaves TRAC spot rate is down 53 cents in only four days, now sitting at $4.73, its lowest point in the last three months.

What does this mean for you?

Brokers: 
Capacity is loosening in Ontario and spot rates are down. Now is the time to try and award some contracted freight. Any spot market loads that come from this area will not need to be prioritized as rates have hit historic lows. Rates will continue to fall, so drive spot rates to the lower end of the range. 
                                            
Carriers: 
Spot market rates are equal if not lower than contracted rates right now. Try to win some contracted business; Ontario has heavily skewed to having more outbound loads than inbound loads with a Headhaul Index of 98.36.
                            
Shippers: 
Anything you can pull forward to ship on this lane would be a smart idea. Rates are low, making it an ideal time to save on costs. If that isn’t an option, look at carrier compliance and see if failing carriers can be swapped out for a lower-cost alternative since rates are low. 

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