The highlights from Wednesday’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.
Market Watch for Oct. 26:
Volumes out of Denver are climbing back out of a two-year low they reached earlier this month.
Outbound demand plunged 22.2% in the last week of September to the lowest levels since April of 2020 but began to make a long and steady comeback at the beginning of October.
The Outbound Tender Volume Index in Denver is up 18.5 points, or 12.6%, to 164.9 since Oct. 1, making this a long and drawn-out recovery.
Inbound freight levels are relatively consistent, seeing a 5.4% increase since the start of the month, but the Inbound Tender Volume Index is down 6.5 points in the past week. The drop in inbound volume placed the disparity between inbound and outbound volumes at less than 1%, but both indexes moved slightly upward Tuesday, creating a stalemate in Denver’s Headhaul Index at minus-1.5.
Rejection rates were below 2.5% last week, but the Outbound Tender Reject Index is up 257 basis points since Oct. 19 to 4.4%, indicating that carriers are searching the spot market for better opportunities as volume starts to pick up.
Kansas City, Missouri
Outbound demand in Kansas City, Missouri, is also making a comeback after falling to record lows.
Volumes leaving Kansas City started October nearly where they had been in the previous three months, but on Oct. 4 began to take a tumble. The Outbound Tender Volume Index dropped more than 23 points, or 12.8%, from Oct. 4-18, but since then volumes have been trending upward. The index climbed more than 5 points, or 5.7%, since Oct. 18 and is still pointed in an upward trajectory.
Inbound capacity is only 1.5% higher than it was on Oct. 3, and the recent increase in outbound volumes brought the difference between inbound and outbound volumes to only 1%. The increase in outbound demand while inbound capacity remains consistent has brought the Headhaul Index up almost nine points to minus-1.7.
Rejection rates reached almost 7.5% last week as capacity was tightening and the spot market was heating up, but this week carriers are accepting more contracted freight as the Outbound Tender Reject Index is down 98 bps since Sunday to 6.2%.
Salt Lake City
Continuing the comeback stories, Salt Lake City is seeing a rise in outbound volumes after taking a dip in the first half of October to a five-month low.
Outbound demand fell 13.5% from Sept. 29-Oct. 18 but has since been on the rise aside from a drop over the weekend, which is to be expected. The Outbound Tender Volume Index for Salt Lake City is now up more than 9.5 points, or 7.7%, to 134.4.
Salt Lake is historically a backhaul market but has been showing headhaul market activity on and off since June. However, outbound demand has exceeded inbound capacity consistently since Labor Day, and inbound freight volumes are trending up right along with outbound volumes.
The Inbound Tender Volume Index is up almost eight points, or 6.6%, since Oct. 16, and trails outbound volumes by 6.2%. This brought the Headhaul Index up into the positive, where it has consistently stayed since the Labor Day holiday and is currently at 7.7.
Rejection rates, however, have not climbed out of the hole just yet. The Outbound Tender Reject Index is only up 86 bps since Oct. 17 to 2.1%, well below the level seen in August and September of around 3.5%. Tender rejections have not moved much at all this week, hinting that, even with an increase in outbound volume, carriers are still reluctant to test their luck in the spot market.
NTI as a point of reference
The National Truckload Index is a daily look at how spot rates in specific lanes hold up in comparison to the national average, giving carriers and brokers an idea of which lanes to gravitate toward or avoid.
Lane to watch: Milwaukee to Denver
Spot market rates from Milwaukee to Denver are down 5 cents since the start of the week but remain 63 cents above the national average at $3.16 a mile with a confidence score of 3.
Outbound volume in Milwaukee is up 7% this week, but volume levels still remain at their lowest levels since April, with rejection rates currently at 5%. A return trip back to Milwaukee is paying significantly less at $1.49 a mile. This is typical in a lane between two backhaul markets, but the mileage combined with the elevated rate going into Denver is what compensates for the return trip.