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: Harrisburg, Pennsylvania, to Charlotte, North Carolina
Overview: Spot rates edged upward as capacity declined due to the Memorial Day weekend.
Highlights:
- Spot rates in May declined to a mid-month average low of $2.61 per mile before increasing to $2.76 per mile going into Memorial Day weekend.
- Over the past month, outbound tender rejection rates from Harrisburg rose from 8.75% to 12.28% and Harrisburg to Charlotte increased from 8.8% to 11.6%.
- Harrisburg outbound tender volumes fell from an early May high of 410 basis points (bps) to a monthly low of 340 bps before rising again to 366.78 by Memorial Day weekend. The decline and subsequent rise in volumes reflects the volatility in spot market rates.
What does this mean for you?
Brokers: Spot market volatility will remain as the Harrisburg market adjusts to capacity reentering the market following the Memorial Day weekend. Expect greater volatility in spot market rates with the current FreightWaves TRAC spot rates from Harrisburg to Charlotte ranging from a low of $2.47 per mile to a high of $2.99 per mile. Use this opportunity to increase margins if your carrier buying power remains in the coming week.
Carriers: Focus on fleet availability to take advantage of rising spot rates if capacity permits it. The rise in outbound tender rejections relative to volume indicates that volatility remains in the market and that a sufficient number of carriers have not entered recently to drive down spot rates. This week will be important to see if volumes remain strong or continue their downward decline from subsequent months.
Shippers: Focus on tender compliance and prioritize time-sensitive shipments following the Memorial Day weekend. Communication is key as many fleets will take a few days for their available truck count to cover truckload demand. Brokers may charge additional rates as the entire market is coming out of a holiday weekend and it could take time for drivers to return to the road.
Watch: Carrier update
Lane to watch: Chicago to Atlanta
Overview: Dry van spot rates have fallen sharply while intermodal shippers should remain wary of service levels.
Highlights:
- The current dry van spot rate is $2.96/mile, inclusive of fuel. That rate is down from a year-to-date high of $4.37/mile, including fuel.
- The current door-to-door intermodal spot rate is $3.94/mile.
- The intermodal tender rejection rate for outbound Chicago intermodal loads is 1.2% and the dry van tender rejection rate in the lane is 9.4%.
What does this mean for you?
Brokers: The rate that brokers are paying for on-demand capacity has fallen from being well above the national average earlier in the year to being nearly in line with the national average (currently at $2.96/mile, including fuel). Therefore, brokers no longer need to make covering loads in this lane one of their key priorities.
Carriers: The Atlanta van outbound tender rejection rate of 8.6% is nearly in line with the national dry van tender rejection rate. What also makes Atlanta an attractive destination for carriers is the Atlanta Van Headhaul Index of 48, which suggests it should be easy for carriers to get reloaded in Atlanta.
Shippers: The intermodal tender rejection rate, which shows that it has fallen back to a normalized level, does not indicate that shippers are getting adequate intermodal service in the lane. Rather, the intermodal spot rate, which remains elevated, indicates that carriers do not want to send domestic intermodal containers to the Southeast unless they are for accommodating contractual shippers. Therefore, intermodal shippers should remain wary of service levels and have backup plans in place.
Lane to watch: Jacksonville, Florida, to Nashville, Tennessee
Overview: Capacity ratchets tighter in Jacksonville, leading to higher rates out of the market.
Highlights:
- The FreightWaves TRAC spot rate from Jacksonville to Nashville increased by 31 cents per mile over the past month, rising to $2.79/mi.
- Rejection rates have risen by over 550 bps to 18.09% out of Jacksonville in the past week, one of the more meaningful increases across the country.
- Volumes out of Jacksonville continue to increase, up 1.29% w/w, to the highest level in more than six months.
What does this mean for you?
Brokers: With capacity tightening significantly in Jacksonville, loads coming out of the market are going to require more time. Brokers should try to keep rates on the low end of the range between $2.44/mi and $3.10/mi as that is where opportunities to pad margins lie.
Carriers: Keep upward pressure on rates out of Jacksonville as this is one of the markets where you hold negotiating leverage. Conditions in Nashville are deteriorating as rejection rates and volume levels decline, so charge more to go into this market.
Shippers: Expect that spot rates on this lane will see upward pressure persist to kick off the summer months. Putting lead times out further in advance will aid in securing necessary capacity, but tighter capacity is going to force higher prices out of the market as more spot market opportunities arise for carriers.
