The highlight reel from Friday’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
MEMPHIS to CHICAGO
Overview: Brokers should raise their rates in light of the tightening Memphis market.
Highlights
- In the past week, the tender rejection rate in the Memphis to Chicago lane increased 249 basis points (bps) to 26.7%.
- The dry van spot rate in the lane is $3.09/mile, including fuel surcharges; that is up $0.10/mile from the previous week.
- Despite both cities being intermodal hubs, only 31 domestic containers/day moved in the lane in the past week, so there is not enough density to make rail intermodal viable for most shippers.
What does this mean for you?
Brokers: Raise your rates in the lane to reflect tightening in the Memphis market. When negotiating with carriers, cite the efficiency of a haul that can be completed in one day along with the attractive Chicago Van Headhaul Index of 75.
Carriers: Given its status as a headhaul market, Chicago is a solid destination despite the Chicago van outbound tender rejection rate being 230 bps below the national tender rejection rate. The Chicago Headhaul Index is 75, rising from 60 in the past few days, which suggests that it is a market where it will be easy for carriers to get reloaded.
Shippers: Extend lead times on outbound Memphis loads to help secure capacity given the currently tight Memphis market. The average lead time on outbound Memphis loads is currently 2.8 days, which indicates that most other shippers are concerned with securing capacity.
TOLEDO (Ohio) to CHARLOTTE (North Carolina)
Overview: Rejections are on the rise as the Headhaul Index spikes over 22% w/w.
Highlights
- Toledo outbound tender volumes are up 2% w/w, signaling that demand for capacity is increasing.
- The Headhaul Index in Toledo is up 22% w/w, signaling that capacity is likely to tighten.
- Toledo outbound tender rejections are up 249 bps w/w, signaling that capacity is likely already tightening.
What does this mean for you?
Brokers: Outbound tender rejections from Toledo to Charlotte are 289 bps higher than the national average, and 355 bps higher than the greater Toledo market. For that reason, you will likely find it more difficult to source capacity for outbound freight headed to Charlotte. As the Headhaul Index continues to rise, putting pressure on capacity and spot rates, you will need to prioritize the Toledo market for coverage while ensuring your team is accurately pricing any Toledo outbound loads for the next few weeks.
Carriers: Rejections are up 249 bps in the Toledo market, which has likely started putting significant upward pressure on rates. If outbound volumes continue to increase relative to inbound volumes (only a small increase w/w), stay firm on your rates in the coming days to ensure they reflect the tightening capacity that is likely to continue as demand increases.
Shippers: Your shipper cohorts in Toledo have decreased tender lead times to 2.7 days over the last few weeks, which means they have been slow to respond to the increase in tender rejections w/w. Judging by the Headhaul Index increase of 22% w/w, it would be wise to get a jump on your competition for truckload capacity by pushing your tender lead times closer to 4 days. This will help ensure you maintain adequate capacity if/when the market tightens again.
ELIZABETH (New Jersey) to RALEIGH (North Carolina)
Overview: Elizabeth is showing signs of dramatic easing.
Highlights
- Elizabeth’s outbound rejection rate has fallen from 22.6% to 18.5% over the past week.
- Lane-specific rejection rates to Raleigh moved in parallel to the overall market, but about a percent and a half higher.
- Raleigh’s outbound rejection rate has inched higher this week, but is coming off a huge decline that occurred the week prior. Outbound and inbound demand have fallen in near conjunction, but it remains in an oversupply condition.
What does this mean for you?
Brokers: Expect easing conditions in this lane; capacity has been more available out of Elizabeth during the past week. Market and lane rejection rates have fallen below the national average with capacity as loose as it has been since early August.
Carriers: Expect less opportunity in this lane this week with moderating conditions in Raleigh. Spot market activity should be lower compared to the previous two months out of Raleigh so make sure preplans are solid, relying less on spot load availability.
Shippers: Expect more carrier availability in this lane this week compared to the previous two months. Last-minute loads will still be subject to spot market premiums, but loads with two- to three-day lead times should see better compliance.
Carrier Update presented by PowerFleet
Donnie Gilbert, director of Customer Solutions at FreightWaves, and Senior Retail Analyst Andrew Cox take a look at freight volumes and rejection rates nationwide in the Carrier Update presented by PowerFleet.
Reefer market is tight
By Mike Baudendistel
For any shippers that make use of refrigerated transportation, there was lots of good information this week on the reefer market.
Clearly, the reefer market remains very tight with an average spot rate of $4.11 a mile, including fuel surcharges, and with carriers rejecting 38% of tendered loads with temperature requirements.
Last year at this time, the average reefer rate was $3.29 a mile.
FreightWaves market expert Mike Baudendistel writes The Stockout newsletter. To receive this newsletter, please click here.
Weekly maritime import shipments by port
By Zach Strickland
SONAR users are able to display the weekly total of import shipments that have arrived in the U.S. (as reported by U.S. Customs and Border Protection [CBP]) by monitoring SONAR’s Weekly Maritime Import Shipments by Port (WICSTM). This number represents the total number of import shipments registered through a specific U.S. port (per week) and includes both containerized and non-containerized goods.
When a shipment is being cleared for entry into the U.S., it is documented using the bill of lading, which serves as documentation for the financial transaction between the buyer (U.S. importer of record) and the shipper (seller) in a foreign country. This information is reported by CBP four to five days (on average) after the date that the shipment was actually cleared.
The volume of imports clearing U.S. Customs can be a leading indicator of intermodal and truckload demand, since imports require subsequent surface transportation to warehouses or distribution centers. Also, imports are closely tied to railroads’ international intermodal volumes.
In addition, a large portion of the goods moved by domestic intermodal providers includes imported freight that has been trans-loaded from international containers into larger domestic containers.
Shipper Update
Lead Economist Anthony Smith and Senior Retail Analyst Andrew Cox look at biggest trends during the week in the Shipper Update.
Is bitcoin growing faster than truckload demand?
On this episode of #WithSONAR, Luke Falasca and Kyle Taylor dive into the continued elevated demand for truckload capacity and the impact peak season will have on it in Q4.
They also discuss how bitcoin and other cryptocurrencies are here to stay for a while and growing more in value every day. In addition, the two look at a few specifics in the Dallas market and why that market isn’t following the general national trend.