The highlights from Friday’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: LA to Atlanta
Overview: The dry van tender rejection rate fallen to 5% amid loosening capacity in the LA market.
Highlights:
- The door-to-door intermodal spot rate moved more in this lane than in any of the other dense domestic intermodal lanes in the past week. It is up 11% week-over-week (w/w) to $2.56 per mile, including fuel.
- The average rate that brokers are paying for on-demand dry van capacity in the lane is $2.42/mile, including fuel, the lowest level in recent months.
- The dry van tender rejection rate in the lane has fallen to 5%, which reflects carriers being very accepting of outbound LA dry van tenders.
What does this mean for you?
Brokers: Keep lowering your bids given that market data shows brokers’ buy rates in the lane continue to hit new lows. When negotiating with carriers, stress that the current dry van LA outbound tender rejection rate is only 2.5%.
Carriers: Most other carriers are very accepting of loads outbound from LA as capacity has loosened in that market. You will likely want to accept tenders in this lane also, given the lack of availability of spot loads and the attractive Atlanta Van Headhaul Index of 44.
Shippers: Rail intermodal remains the most economical option for shippers with contracts already in place, but shippers should be wary of the potential for intermodal service disruptions given that rising intermodal spot rates likely mean that the railroads are protecting intermodal capacity for contracted shippers.
Watch: Carrier update
Lane to watch: Dallas to Detroit
Overview: Tightening capacity in both Dallas and Detroit mixes with the lowest spot rates for the last week.
Highlights:
- Dallas outbound tender volumes are rising slowly and are almost double the outbound volume of Detroit with 384.45 bps.
- Spot rates are at monthlong lows of $2.58 after cresting at above $2.80.
- Detroit’s outbound tender lead time is falling quickly to 2.96 days after cresting at almost 3.5 days last week.
What does this mean for you?
Brokers: Rates are down but so are volumes. Capacity in both markets is tightening, making last-minute loads trickier than usual. Priority coverage on this lane wouldn’t be the worst idea to ensure pickups don’t have to roll to the next day.
Carriers: Dallas and Detroit have tightening capacity, indicating that it might be a good idea to send a spare truck or two to take advantage of the capacity crunch. Spot rates haven’t risen, but holding firm on rates will help bring the spot market up.
Shippers: Outbound tender lead times are relaxing in Detroit but don’t expect those tender lead times to stay under three days for much longer. Strive to get freight tendered as soon as possible to ensure freight is picked up.
Watch: Shipper update
Lane to watch: Elizabeth, New Jersey, to Chicago
Overview: Rejections are likely to rise as the Headhaul Index surges 27% w/w.
Highlights:
- Elizabeth outbound volumes are up 7% w/w, but with maritime import volumes hitting a new all-time high for daily volumes, demand is likely to surge higher.
- Elizabeth’s Headhaul Index has increased more than 27% w/w, signaling the capacity is likely becoming increasingly imbalanced.
- Outbound tender rejections in Elizabeth are relatively flat w/w but are likely to move higher as the Headhaul Index surges.
What does this mean for you?
Brokers: The w/w change of 27% in the Headhaul Index is a large shift in the Elizabeth market, and it is being primarily driven by a 7% increase in outbound volumes. Outbound tender rejections are relatively flat w/w, so expect significant upward pressure on spot rates in the days ahead and for capacity to be especially tight.
Carriers: Elizabeth pricing power is likely to shift even further in your favor in the coming days due to a growing imbalance between inbound and outbound volumes. Keep an eye on outbound tender rejections, and if they continue even higher w/w, then you are likely to see significantly more upward pressure on spot rates.
Shippers: Your shipper cohorts in Elizabeth are still averaging 2.9 days in tender lead times, but history shows that when capacity tightens quickly in Elizabeth, lead times should be between 3.5 and four days to help relieve some of the pressure being put on capacity and spot rates.
