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.
ANNOUNCED MONDAY: FreightWaves SONAR data available now through Bloomberg
Lanes to watch
By Zach Strickland, director, Freight Market Intelligence
INDIANAPOLIS to ATLANTA
Overview: Reefer rejection rates have climbed to 60.50% on the IND – ATL lane as rejection rates fall to 31.49% in Atlanta.
Highlights:
- Reefer rejection rates have climbed to 60.50% on the IND–ATL lane, which is above the Indianapolis market average of 57.61%.
- Atlanta’s Headhaul score has declined to -30.65 as reefer capacity loosens, pushing rejection rates down to 31.49%.
- Atlanta shippers have increased reefer tender lead times to 3.95, which is well below the national average of 4.29 days.
What does this mean for you?
Brokers: Shippers are struggling with reefer capacity on the IND–ATL lane as market conditions deteriorate in Atlanta. Reefer rejection rates have increased to 60.50% as spot rates for on-demand capacity climb. Brokers should search the spot market for loads that run across the IND – ATL lane, increasing their bids to create high margin loads. This lane will be difficult to cover, and carriers will be pushing up their spot rates for on-demand capacity.
Carriers: Reefer carriers with excess capacity in the Indianapolis market should search the spot market for loads that deliver into Atlanta. Rejection rates have climbed above 60% on the IND–ATL lane since market conditions have softened in the Atlanta market, but with proper planning, carriers should be able to book a healthy load back into a Headhaul market without any layovers in the Atlanta market. Given these conditions, carriers should significantly increase their rates on the IND–ATL lane.
Shippers: Atlanta shippers need to keep increasing reefer tender lead times as conditions soften in the Atlanta market. Capacity has loosened, but reefer rejection rates are still elevated at 31.49%. Secure capacity as early as possible, and keep your loads off the spot market. If carrier competition for loads continues to heat up in the underbooked market, spot rates will keep trending downward.
SAVANNAH (Georgia) to ALLENTOWN (Pennsylvania)
Overview: Maritime import volumes reach a new all-time high, and are likely to move higher in the days ahead.
Highlights:
- Savannah maritime import shipment volumes hit a new all-time high in daily volumes in the last couple of days, and are likely to break this record again in the days ahead.
- The Savannah Headhaul Index is up 13% w/w, but is very likely to climb further in the weeks ahead as import volumes convert to the truckload market.
- Outbound tender volumes in Savannah are up 13% w/w, but with record weekly volumes being reported, they are set for large gains in the weeks ahead.
What does this mean for you?
Brokers: The Port of Savannah just shattered its record for daily maritime import volumes (moving 7-day average). This is a record that is not likely to last for long as the strong upward trend in volumes is likely to lead to multiple new records within the next couple of weeks. The huge volumes are largely from peak season volumes (shipped in the latter half of September) finally offloading after being caught in the record traffic jam of vessels at anchor. The huge volumes will likely shift quicker than expected into the truckload market as many of these volumes are now extremely time-sensitive and need to be delivered as soon as possible.
Carriers: Stay firm on your rates, as we are likely to see outbound volumes reach close to (and possibly exceed) their yearly highs for 2021. It is normal for outbound volumes to be headed toward a peak during this time of year, but 2021 will be exceptional because of the record maritime import volumes now arriving on shore. Keep an eye on outbound tender rejections and be sure to adjust your rates alongside any significant increases in the days ahead.
Shippers: Your shipper cohorts currently have tender lead times at 2.4 days, signaling that many shippers are not anticipating the likely tightening of capacity in the days ahead. Outbound volumes may have been slow to increase as expected due to the massive import volumes that have arrived through the Port of Savannah, but it is only a matter of time before these volumes finally get transitioned into the domestic truckload and intermodal markets. In preparation of a surge in demand prior to “Black Friday,” it would be wise to go ahead and push out your lead times to between 3 and 3.5 days.
KANSAS CITY (Missouri) to COLUMBUS (Ohio)
Overview: Kansas City rejections jump as volumes contract.
Highlights:
- Kansas City’s outbound rejection rate has increased from 23.3% to 27.8% over the past week as outbound demand has dipped.
- Lane rejection rates to Columbus have moved similarly and remain above the market average.
- Columbus’ outbound rejection rate has fallen to its lowest point since early August, though demand has remained consistent.
What does this mean for you?
Brokers: Watch out for a change of direction in spot rates in this lane this week. The long-run trend for easing remains in place, but there may be a short-lived change of direction or at least a cessation in decline. Check on all outbound Kansas City loads to start the week.
Carriers: Do not expect as much spot market volume out of Columbus as there has been over the past month. Contracted demand remains strong, but many more loads are being accepted. In other words, plan for less transactional reload freight at the destination in this lane.
Shippers: Send a quick message to your carriers to ensure they are still on schedule for pickups in this lane. No major disruption is expected, but some intermittent disruptions may occur prior to the bulk of the holiday impact on capacity.
Watch: Carrier Update
Update on … Port of Oakland
By Richard Daigle, SONAR Account Executive
The spike in TEU tender volumes (orange line) we saw in mid-October are arriving at the Port of Oakland. Import volumes reported by U.S. Customs (blue line) are up sharply over the past few days.
We can see that there is a dip in TEU tender volumes followed by another big upswing, signaling that import volumes into Oakland will be volatile over the coming months.
We can also see how this is impacting dry van truckload capacity in the San Francisco market with the Capacity Trend Score, which shows that dry van capacity has significantly tightened over the past week.
Shippers: Be aware that there could be delays for freight coming into the port of Oakland.
Brokers: Look to cover dry van loads originating in the San Francisco market as soon as possible. Capacity has tightened.
Carriers: Be aware that there is a lot of demand for capacity in the San Francisco market.
These conditions may not last long, but could occur again in the near future as waves of imports come into the Port of Oakland.
Watch: Shipper Update
Focus on … reefer indices
Reefer Headhaul Index vs. Reefer Outbound Tender Volume Index
By Zach Strickland
The national average for reefer outbound tender rejection rates has declined over the past four days but remains elevated at 37.05% as tight market conditions apply pressure to shippers.
In the map below, SONAR’s reefer Headhaul Index is compared to reefer freight volumes, allowing SONAR users to see which markets are overbooked (blue), and the amount of freight opportunities in those markets.
The Twin Falls, Fargo, Indianapolis and Fresno markets have reefer Headhaul scores over 50, indicating that there are more outbound load tenders than inbound trucks.
Reefer carriers should improve their truck utilization in the overbooked (blue) markets, and find higher rates as shippers struggle to secure capacity.
Carriers will find the most opportunities for reefer freight in the Ontario, Atlanta, Indianapolis, Joliet, Fresno, Fort Worth, Allentown, Twin Falls, Lakeland and Harrisburg markets, which are the largest reefer markets by volume in the nation at this time.
