The highlights from Tuesday’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: Denver to Los Angeles
Overview: Carriers have increased prices moving into LA.
Highlights:
- While spot volumes in this lane remain low, they are averaging much higher than they did during the winter months, probably due to the waning demand conditions out of Los Angeles.
- Lane-specific tender rejection rates increased about 75 bps to 4.2% over the past week, which is still well below the 9% they averaged in February and March.
- Los Angeles’ outbound rejection rates have increased slightly (from 2.4% to 2.8%) over the past week, but this is a nonstarter for any action.
What does this mean for you?
Brokers: Do not expect any near-term changes in this lane, but if it has been a few months since you quoted this lane, expect a pretty sizable increase in the spot rate since January, which may seem counterintuitive.
Carriers: Activity should be consistent in this lane with no large influence from the volatile weather conditions out of Denver. Note the higher spot prices if you haven’t quoted this lane in a few months.
Shippers: Expect little to no change in contract compliance in this lane, but be mindful of the spot market volatility over the past few months if you handle this lane more transactionally. Rates are still cheaper than most lanes, but carriers may avoid moving in this direction.
Watch: Carrier update
Lane to watch: Little Rock, Arkansas, to New Orleans
Overview: Rejections are above 20%, a rare sight in most markets.
Highlights:
- New Orleans outbound tender volumes are up and down more than just about any other market. They are up 6 basis points (bps) from late last week.
- Spot rates for this lane are at the peak for the month at $3.55, including fuel.
- Little Rock’s headhaul score is -21.21, heavily favoring inbound loads over outbound loads.
What does this mean for you?
Brokers: Rates are at a high for this lane, which is shocking given that many other markets are at all-time lows. Put priority on covering this lane as outbound tender lead times are just under 3.5 days in New Orleans. Waiting to cover this lane at the last minute will result in a loss on margin.
Carriers: Little Rock is favoring outbound loads over inbound loads, which makes it a less than ideal city to end in. The good news is that New Orleans has an outbound tender rejection index of 22.11%, which is some of the tightest capacity in the country. It might be beneficial to head a few extra trucks in that direction to capitalize on the higher than normal spot rates.
Shippers: Outbound tender lead times in New Orleans should stay at a minimum of 3.5 days. Up almost half a day from last week, tender lead times will need to be a priority to ensure coverage. Any delay will result in paying way too much on the spot market.
Tender rejection rates continued to show signs of stabilization early last week and then started to trend higher. Seasonally, this makes sense with Memorial Day approaching and International Roadcheck having a potential influence. It is still interesting to see both rejection and spot rates reverse course, even nominally, as the downward pressure on both has been extreme since early March. The takeaway is that Memorial Day is still a factor in reducing capacity, but it does not appear that it will be the thing that pushes capacity back to its tightest levels without the return of significant levels of demand. Expect a slight disruption to your networks over the next week, but do not put much stock in this being the start of a significant summer tightening.
