The highlights from Monday’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: Ontario, California, to Columbus, Ohio
Overview: It is time to move off the West Coast.
Highlights:
- Ontario’s outbound rejection rate has fallen to 5.6%, its lowest value since June 2020, indicating capacity has nearly fully recovered in Southern California.
- Lane-specific rejection rates to Columbus have fallen over 3 percentage points — to 12.9% — since March 3. Spot rates have fallen 20 cents a mile since March 1 — to $2.74.
- The Columbus outbound rejection rate has been relatively sticky, hovering above the national average at around 19%.
What does this mean for you?
Brokers: Expect capacity to be much easier to source out of California this week, a continuation of a long-running trend. Target rates below $2.70 per mile.
Carriers: Rebalance your networks to stop moving into California. Capacity has overcorrected and is driving spot rates down at a record pace. Expect to cover this lane under contract and accept it if offered. Reload potential is still high out of Columbus.
Shippers: Expect improving compliance out of Ontario this week with fewer loads falling to the spot market. This is one of the more difficult lanes to cover out of Ontario, but compliance rates should be above 80% at this point.
Watch: Shipper Update
Lane to watch: Indianapolis to Dallas
Overview: Spot rates are likely to increase as the Headhaul Index surges 18% w/w.
Highlights:
- Indianapolis outbound tender volumes are down 2% w/w, signaling that demand for outbound capacity has decreased slightly over the last week.
- The Headhaul Index in Indianapolis is up 18% w/w, signaling capacity is likely to tighten due to the growing imbalance between outbound and inbound volumes.
- Indianapolis outbound tender rejections are down 77 bps w/w but are likely to move higher as a result of the large w/w increase in the Headhaul Index.
What does this mean for you?
Brokers: Take notice of the 18% increase in the Headhaul Index w/w. Even though outbound volumes are down 2% w/w, inbound volumes have actually dropped at a faster pace; this caused the major increase in the Headhaul Index. With fewer trucks headed into the Indianapolis market, if outbound volumes level off, or reverse and head higher, capacity will likely tighten rapidly and put significant upward pressure on spot rates.
Carriers: Stay firm on your rates out of Indianapolis. The 18% w/w increase in the Headhaul Index is likely to cause greater upward pressure on spot rates. Outbound volumes are down 2% w/w, but keep a close eye on outbound tender rejections, and if they rise in the coming days, adjust your pricing higher to capitalize on tightening conditions.
Shippers: Your shipper cohorts in Indianapolis have increased tender lead times to 2.9 days on average. This is a strong increase w/w and is a key signal that shippers are feeling capacity tighten. Historically, shippers have lead times between three-and-a-half and four days during periods of extremely tight capacity, so it would be wise to go ahead and adjust your lead times to prepare for capacity to tighten further.
Watch: Carrier Update
Lane to watch: Denver to Dallas
Overview: Capacity is tightening in Denver; ship before spot rates rise.
Highlights:
- The Denver outbound tender rejection index is at 18.01% and rising, indicating capacity is tightening in the market.
- The Dallas outbound tender rejection index has dropped to 13.06% after nearing 20% at various points last week.
- Spot rates are averaging around $1.81 per mile.
What does this mean for you?
Brokers: Capacity is starting to tighten in Denver; bid a minimum of $1.81 to protect margin when rates suddenly trend upward. Capacity should still be pretty easy to source for this lane so it shouldn’t be the main priority.
Carriers: There are an overwhelming number of outbound loads in Dallas, so anything that can get trucks to the market is going to be a cakewalk to get trucks out of Dallas. With the increase in capacity in Denver, hold firm on rates as they trend upward.
Shippers: Rates are low for now, but don’t pull everything forward to ship as rates will start to increase. Outbound tender lead times in both markets are hovering around three days. If you stick with that much notice in tender times, the upswing on rates won’t affect you that much.