The exclusive highlight reel from Tuesday’s SONAR reports. For more information on SONAR — the fastest freight-forecasting platform in the industry — or to request a demo, click here.
Lanes to watch
By Zach Strickland, director, Freight Market Intelligence
ATLANTA to DALLAS: Rejection rates decline on the ATL–DAL lane as the Dallas market tightens.
Highlights
- Dry van rejection rates declined on the ATL – DAL lane, but remain elevated at 21.57%.
- Dallas’ headhaul score has increased to 114.51 as capacity tightened, pushing rejection rates up to 23.42%.
- Dallas shippers have increased dry van tender lead times to 3.12 days, which is well above the national average of 2.66 days.
What does this mean for you?
Brokers: Dry van rejection rates trended downward on the ATL–DAL lane last week to 21.57% as capacity loosened in the Atlanta market. Brokers should search the spot market for dry van loads that run across the ATL–DAL lane, helping carriers reposition their trucks to the stronger Dallas market. Hold firm on your bids, but keep downward pressure on carrier rates since dry van rejection rates are currently in decline.
Carriers: Dry van carriers with excess capacity in the Atlanta market should search the spot market for loads that deliver into the Dallas market. Last week, carriers averaged $2.41 all-in rpm on the ATL – DAL lane, but rejection rates have dipped slightly to 21.57% on the lane. Carriers should hold firm on their rates, but reduce your spot rates only if you see a decline in your win percentages out of the Atlanta market. The Dallas market will be a strong destination point for carriers as market conditions tighten, allowing carriers to increase their spot rates on their next load.
Shippers: Market conditions have tightened in the Dallas market, and shippers have proactively increased tender lead times. Shippers need to continue to monitor freight volumes, the SONAR Headhaul Index and rejection rates for any shifts that would allow them to push carrier rates back down. Secure capacity as early as possible, and avoid the high costs for on-demand capacity.
SAVANNAH (Georgia) to ALLENTOWN (Pennsylvania): Outbound volumes are likely still building in Savannah from record weekly import volumes.
Highlights
- Savannah weekly maritime import shipment volumes hit a new high in the last couple of weeks, and are expected to remain strong for at least the next 4 to 5 weeks.
- The Headhaul Index in Savannah is up 5% 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 5% 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: It is important to note that the Port of Savannah has continued to post record weekly volumes throughout the last few weeks, but outbound rail volumes for international containers (loaded) are at record lows since the pandemic began. If these volumes are not moving out on the rail, then they will be moved out of the port into regional distribution centers by dray carriers and then converted over into the truckload market. With many top 100 importers utilizing distribution centers close to the Port of Savannah, we are still likely to see massive gains in outbound volumes, which will undoubtedly put upward pressure on spot rates.
Carriers: Stay firm on your rates, and do not get overly aggressive simply because outbound tender rejections are down over 5% w/w. The Port of Savannah has been handling record import volumes in recent weeks, and we are not seeing those materialize in the form of outbound rail volumes. These import volumes are likely having a difficult time finding drayage capacity, and thus are being delayed in being converted into outbound truckload volumes. For these reasons, demand is likely to surge in the remaining weeks of 2022.
Shippers: Your shipper cohorts currently have tender lead times at 2.6 days, signaling that many shippers have yet to feel a major tightening in truckload capacity. However, since there is likely a massive amount of pent-up truckload demand building in Savannah, you should go ahead and get a jump on your competition by pushing out lead times to between 3 and 3.5 days to ensure you are ready for the tightening conditions that likely lie ahead.
ONTARIO (California) to COLUMBUS (Ohio): Ontario rejection rates hit lowest point in five months.
Highlights
- Ontario’s outbound rejection rate fell to 16.4% on Sunday – its lowest point since May. Outbound demand continues to be strong in relation to inbound.
- Rejection rates to Columbus have fallen from 26% to 22% to start the month.
- Columbus’ outbound rejection rate has not changed much over the past four weeks as inbound demand has increased slightly.
What does this mean for you?
Brokers: Expect easing conditions in this lane this week compared to last week in terms of lower spot volumes and better coverage. Rates will remain elevated, but you should be able to avoid a weekly increase with an extra call.
Carriers: Expect slightly less spot volume in this lane this week compared to the previous two weeks. Do not get too greedy with rates as you may lose some loads with a slight easing in Ontario. Columbus conditions remain stable with little change over the past month.
Shippers: Try to push a few more loads in this lane while conditions are easing. Do not expect much spot market rate relief, but contracted compliance is at its best levels in months. With conditions expected to tighten over the next few weeks, now is the time to push freight.
Shipper and carrier updates
Lead Economist Anthony Smith and FreightCaster Michael Vincent look at job openings and consumer trends in the Shipper Update.
Zach Strickland, Director of Freight Market Intelligence at FreightWaves, and FreightCaster Michael Vincent take a look at national rejection rates in the Carrier Update presented by PowerFleet.
SONAR on social media
SONAR notes
Contract rates are up over 25% year-over-year (y/y), which has helped drive better carrier compliance as rejections are down 500 basis points y/y. Ultimately, pressure on the truckload market will continue for the rest of the year. …
intermodal tender rejections have fallen in most locations and domestic intermodal spot rates are flattening at a high level. Unfortunately, international intermodal volume is falling due to the many capacity constraints. These declines are concentrated in the outbound L.A. lanes. …
Maritime spot rates slid once again in the most recent week, as production in China was curbed due to the annual Golden Week holiday. The energy crisis in the same region threatens to slow exports, putting pressure on an already crimped global supply chain. …
Relative capacity did loosen across the majority of the country over the past week as rejection rates fell in 86 of the 135 freight markets. Kansas City is loosening relatively quickly based on the size of the market, with rejection rates in KC falling over the past week by 370 bps, to 25.11%.