The highlights from Monday’s SONAR reports. 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: Atlanta to Louisville
Overview: Atlanta rejection rates are trending higher.
Highlights:
- Atlanta’s outbound tender rejection rate has increased from 13.5% to 14.7% over the past week.
- Rejection rates to Louisville have increased much more, moving from 15% to 17.9% over the same time. Spot rates have not responded yet, hovering around $3.42 over the past few days.
- Louisville’s outbound tender rejection rate has fallen from 25% on February 22 to 17.5%.
What does this mean for you?
Brokers: Expect tightening conditions in this lane compared to last week; pad margins when coverage is uncertain. Keep an eye on all Atlanta freight this week as it is typical to see tightening in this market at this time of the year.
Carriers: Divert more capacity to the spot market in this lane. Louisville’s rejection rates have fallen significantly, which will lead to less reload potential this week.
Shippers: Make extra calls to double-check with your carriers in this lane this week. Keep lead times above 3 days when possible out of Atlanta because rejection rates are once again on the rise.
Lane to watch: Columbia, SC to Harrisburg (PA)
Overview: Spot rates have declined from 6-month highs as outbound tender rejection and volume rates increase.
Highlights:
- Spot rates declined to $3.92 per mile from a quarterly high of $4.01 per mile on January 25. However, capacity appears to be tightening against rising tender volumes.
- Outbound tender rejections from Columbia surged in the past 2 weeks from 15.46% to 20.29% as outbound tender volumes rose from 125 to over 137 basis points (bps).
- The Harrisburg market is experiencing declines in outbound tender rejections and volumes. Current rejections hover around 21.73%, which may push spot rates up inbound to the market.
What does this mean for you?
Brokers: Recent movements in spot rates appear temporary if outbound tender rejection and volume levels continue to increase out of the Columbia market. Focus on adding a margin buffer for spot quotes to cover the increased lane volatility. The declining capacity trend shows greater volumes, forcing many shippers to possibly increase spot rates to compete. “Must go” ad hoc freight can be a lucrative opportunity to offset rising costs for committed lanes.
Carriers: The ongoing volatility in the Columbia market is being influenced by outbound tender volume levels. Expect rising spot rates in the coming days as these tender volumes trickle down into spot opportunities, providing the potential for greater revenue if extra capacity is available. With spring approaching, weather conditions should improve in Pennsylvania, but recent outbound volume trends indicate possible lower spot rates coming out of the area.
Shippers: The rise in outbound tender volumes will cause greater demand for limited capacity, as evidenced by the declining capacity direction trend numbers. Attempt to get shipments out before spot rates move in line with the rising tender rejections, which will cause an increase in overall transportation spend.
Lane to watch: Columbia (SC) to Chicago
Overview: Outbound tender rejections are likely to increase further in the days ahead as the Headhaul Index surges 11% week-over-week (w/w).
Highlights:
- Columbia outbound tender volumes are up 5% w/w, signaling that demand for outbound capacity is increasing.
- The Headhaul Index in Columbia is up 11% w/w, signaling that capacity is likely to tighten due to the growing imbalance between inbound and outbound volumes.
- Columbia outbound tender rejections are already up 469 bps w/w, and are likely to increase further in the days ahead.
What does this mean for you?
Brokers: Columbia outbound tender rejections have increased 469 bps over the past week, and due to the growing imbalance between inbound and outbound tender volumes, rejections will likely continue to increase in the days ahead. Spot rates already are at their highest levels in a month, so be sure to adjust your pricing accordingly.
Carriers: Spot rates from Columbia to Chicago are slightly lower than their highest levels so far in 2022, but the good news for carriers is that pricing power is likely to shift even further into your favor due to the 11% w/w surge in the Headhaul Index. The 469 bps w/w increase in outbound tender rejections is also proof that the Columbia market is likely tightening further.
Shippers: Your shipper cohorts in Columbia are currently averaging 2.8 days in tender lead times, but with outbound volumes and the Headhaul Index on the rise, it would be wise to push your tender lead times closer to 4 days for the next couple of weeks to help give your team the best chance to secure available capacity.