Here is a roundup from Friday’s SONAR reports. This file will be updated throughout the day. 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
NASHVILLE to ELIZABETH (New Jersey)
Overview: Rejections are likely to increase further as outbound volumes surge w/w.
Highlights
- Nashville outbound tender volumes are up 15% w/w, signaling that demand for outbound capacity is picking up.
- The Nashville Headhaul Index is up 25% w/w, and is likely to increase further – turning Nashville into a headhaul market, where it is likely to remain throughout the peak season.
- Nashville outbound tender rejections are up over 5% w/w, signaling that the increase in outbound volumes is likely already causing tightening conditions.
What does this mean for you?
Brokers: Nashville tender rejections are up over 5% w/w, and are currently over 11% higher than the national average. With outbound volumes increasing 15% w/w, pushing the Headhaul Index up 25% w/w, it is likely that there is significant upward pressure on rates, and capacity is also likely to get tighter in the coming days. Nashville is likely to remain a headhaul market for the rest of the year, so be sure to account for the upward pressure on spot rates when pricing new opportunities and prioritizing coverage on your existing loads.
Carriers: Stay firm on your rates because there is significant upward pressure coming from both a decrease in supply and increase in demand w/w. Outbound tender rejections have already increased over 5% w/w, and with the Headhaul Index increasing 25% w/w, pricing power is likely to shift even further in your favor for outbound Nashville lanes. Keep an eye on outbound tender rejections. If they continue to rise, you can likely push your rates higher alongside them.
Shippers: Your shipper cohorts are currently averaging 2.8 days in tender lead times, and that time remained largely the same w/w. With outbound tender rejections, outbound volumes and the Headhaul Index rising concurrently, you will likely need to push tender lead times well over 3 days to protect your company from at least some of the upward pressure being put on rates and causing a tightening of capacity.
ATLANTA to CHICAGO
Overview: Brokers should lower their bids as the Atlanta dry van market shows signs of loosening.
Highlights
- The tender rejection rate in the lane is 20.7%, the lowest tender rejection rate since January.
- In the past week, an average of 285 loaded domestic intermodal containers moved in the lane each day, while an average of only 6 empty containers moved in the lane, which is fewer than in recent months.
- Intermodal spot rates fell from $2.08/mile, including fuel surcharges, in late September to $1.64/mile, including fuel surcharges.
What does this mean for you?
Brokers: Lower your bids in the lane to reflect carriers’ increased willingness to accept dry van loads that are outbound from Atlanta. When negotiating with carriers, highlight Chicago’s attractive Van Headhaul Index of 51. While the latest intermodal spot rates suggest that brokering intermodal loads in the lane makes sense financially, it may not be possible to meet shippers’ service constraints given the intermodal congestion issues.
Carriers: While the Chicago Van Headhaul Index has declined in recent days from 68 to 51, a reading of 51 indicates that Chicago remains a location where it is fairly easy for dry van carriers to get reloaded. The Chicago van outbound tender rejection rate of 19.7% is 63 basis points (bps) below the national dry van tender rejection rate.
Shippers: The Atlanta van outbound tender rejection rate of 16.1% is lower than it has been in over a year. With carriers more accepting of contracted loads, look to keep loads out of the spot market. Loaded domestic intermodal volume is about 10% below the mid-summer volume, which suggests that intermodal congestion persists.
ELIZABETH to CLEVELAND
Overview: Elizabeth outbound demand continues to climb.
Highlights
- Elizabeth’s outbound rejection rate bounced back above 22% this week after falling close to 19% earlier in the month.
- The Elizabeth to Cleveland rejection rate has largely mirrored the Cleveland market’s aggregate rate, but at a higher level over the past year.
- Cleveland’s outbound rejection rate has been trending higher this month but remains below the national average as its outbound demand has waned over the past year.
What does this mean for you?
Brokers: Expect tightening conditions in this lane and keep it as one of the highest priorities for finding coverage out of the Elizabeth market, putting loads moving further into New England a tier above. Pad margins where you are uncertain. Increasing demand pressure continues to put Elizabeth’s loads at greater risk.
Carriers: Put this lane as a lower priority for covering unless you have a solid preplan waiting in Cleveland. Cleveland has become a much looser market over the past six months with rejection rates below the national average.
Shippers: Keep outbound Elizabeth lead times above 3 days for the rest of the year. If your carrier compliance is worse than 75%, consider a rate increase or adding to your route guide in this lane.
Carrier update
Donnie Gilbert, director of customer solutions at FreightWaves, and Executive Publisher Kevin Hill take a look at rejection rates in the Carrier Update presented by PowerFleet.
Focus on … Savannah, Georgia
By Richie Daigle, SONAR account executive
There is even more freight headed to the already congested port of Savannah.
The chart below shows Imports from U.S. Customs in blue with TEU Tender volumes for containers headed to Savannah in orange.
Capacity has loosened slightly over the past two weeks, but that will likely change as more and more freight comes into port.
Shippers: You don’t need us to tell you that the situation at ports all over the country is less than ideal. The wave of imports headed to Savannah will likely lead to further delays. Stay in communication with your partners and be flexible if you can.
Brokers: Communicate with both your carrier and shipper partners and start developing strategies to get freight moved in a timely manner as it comes in
Carriers: With the holidays quickly approaching, there will likely be a lot of demand to move freight quickly once it comes into the country.
Shipper update
FreightWaves Lead Economist Anthony Smith and Executive Publisher Kevin Hill look at retail sales in the Shipper Update.
Used truck price index
By Zach Strickland
The ACT Research Used Truck Price indices measure the average price of 3-, 4- and 5-year old trucks on the open market and is expressed in dollars per unit. Since the COVID-19 pandemic began, the demand for capacity has hit multiple record highs, pushing carrier rates upward over the past year. Carriers are holding onto their older trucks for longer periods of time since the demand for capacity has remained extremely high, and their new truck orders have been delayed.
In the map below, SONAR users can see where 3-year old trucks were valued at $54,740 in July 2020 and increased to $90,391 in August 2021. Both 4-year old and 5-year old trucks have seen significant increases in value over the same time period.
The increase in values for used trucks can be a measurement of the strength of the current markets, but also a barrier to entry for new companies. If you were thinking about becoming an owner-operator, or expanding your fleet with used trucks that mega-carriers sell after 3 years, that cost has increased over $35,000 per truck in the past 15 months.
