The highlights from Wednesday’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: Kansas City, Missouri, to Columbus, Ohio
Overview: Kansas City rejection rates have fallen over 6 percentage points since March 1.
Highlights:
- Kansas City’s outbound rejection rates have fallen from 28% on March 1 to 20.61%, with lane rejection rates to Columbus following a similar path.
- Spot rates to Columbus have fallen 42 cents a mile (to $3.55/mile) since March 1.
- Columbus’ outbound rejection rate has been slowly falling since the start of February, moving from 20.5% to 17.97% over the past six weeks.
What does this mean for you?
Brokers: Target rates at or below the market average of $3.55 per mile when securing capacity in this lane. Expect less spot market activity out of Kansas City compared to previous weeks with rejection rates on the decline.
Carriers: Expect rapidly easing conditions in Kansas City and rely less on spot market volumes for reloading. Columbus is slow to stabilize and reload potential should be about the same as the previous few weeks. Do not get too greedy on the spot market.
Shippers: Now is the time to start pushing freight out of Kansas City if you have been holding it. Rejection rates are still relatively high but are coming down rapidly. If you have not been seeing improvement in service over the past month, check to see if your rates are too far below market.
Watch: Shipper update
Lane to watch: Los Angeles to Chicago
Overview: Less transloading leads to more available domestic intermodal capacity.
Highlights:
- Dry van carriers are only rejecting 8.6% of tenders in the lane, the lowest percentage since May 2020 and well below the national van tender rejection rate of 15.8%.
- Domestic intermodal volume in the lane averaged roughly 1,100 containers/day in the past week, in line with year-ago levels but down from a high of nearly 1,200 containers/day.
- The recent decline in domestic intermodal volume seems to be driven by less transloading from 40-foot international containers into 53-foot domestic containers. International intermodal volume in the lane was 1,055 units/day in the past week, a year-to-date high.
What does this mean for you?
Brokers: Lower your bids for dry van capacity in the lane to preserve margins. Dry van spot rates in the lane have declined 12% in the past month. The average dry van spot rate, the spot rate in the 67th percentile, and the spot rate in the 33rd percentile, are fairly concentrated at $2.74, $2.85 and $2.60, respectively.
Carriers: Dry van carriers will likely want to accept tendered loads since Chicago, with its van outbound tender rejection rate of 16.9%, is a tighter market than most. Plus, Chicago remains a headhaul market; the Chicago Van Headhaul Index is 30.4. Given the available domestic intermodal capacity, shippers are likely using the highway due to service constraints, so be sure to price accordingly.
Shippers: Shippers are in a better position in the lane than they have been in recent months with capacity in the LA market loosening. SONAR data shows that intermodal spot rates are currently 17% below dry van spot rates, so spot shippers moving less time-sensitive loads may want to consider using domestic rail intermodal.
Watch: Carrier update
Lane to watch: Baltimore to Nashville, Tennessee
Overview: Rejection rates in Nashville are at the second-highest levels for the month.
Highlights:
- Outbound rejection rates in Nashville have jumped to 22.51% after staying below 20% last week.
- Outbound tender volumes in Baltimore have dropped almost 20 basis points (bps) in the last week.
- Spot rates are at $3.09 for this lane.
What does this mean for you?
Brokers: Capacity is tightening in Nashville and loosening in Baltimore. As a result, the rates in Baltimore will start to fall and they will start to rise in Nashville. Rates have not jumped yet on this lane, making it the perfect time to get shipments booked now before that change happens.
Carriers: Nashville has changed from a relatively balanced market and now has more outbound loads, making it a desirable market to enter. Capacity is tightening in Nashville, so any additional trucks moved to the market would be ideal as rates will start to increase.
Shippers: Outbound tender lead times are firmly above two-and-a-half days but under three days in both markets. Shipping within that time frame will ensure the best rates. That being said, as the Nashville market begins to tighten it might be a good idea to ship a little extra from there to save on costs as well as use looser markets like Baltimore to get carriers to those more desirable markets for a good price.