The highlights from Monday’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. 10
It’s been two weeks now since Hurricane Ian hit both coasts of Florida, and volumes are beginning to tick upward after facilities reopened last week.
In the past week, the Outbound Tender Volume Index in Jacksonville increased by 32 points, or 33%, to 132.1 — roughly where it was in the week leading up to the hurricane. The index is leveling out, hinting that operations are bouncing back and quickly stabilizing to how they were before the hurricane.
“We’ve seen a slight uptick in volume since the hurricane hit. As far as capacity and rates, it’s been pretty normal in Florida for this time of the year,” says Matt McGowan, team lead at Axle Logistics in Knoxville, Tennessee.
“We saw a little crunch post-hurricane but it was a slight blip. Overall, rates have been fairly steady and the hurricane didn’t have much effect on the market and nearby markets.”
However, rejection rates in Jacksonville are only modestly trending back down after rising in response to the storm. Tender rejections reached more than 7.5% in the first week of October, and after a slight decrease still remain elevated at 6.4%. This points to carriers slowly easing back into their contracted freight.
In Lakeland, outbound demand recovered 17.8% last week, and this week the Outbound Tender Volume Index leveled out at 187.4. In the days leading up to the hurricane, we saw inbound volumes increasing in central Florida in preparation for the storm, but they are settling back to where they were before the surge.
The Inbound Tender Volume Index saw a 45-point increase during the final week of September, and those levels remained elevated until last week. Inbound capacity has now dropped back down 16% to where it was during August and the first half of September.
Rejection rates in Lakeland are beginning to settle back down but remain at a two-month high. The Outbound Tender Reject Index in Lakeland almost hit 3.5% last week as many roads remained flooded but is now down 90 basis points to 2.6%.
Charlotte, North Carolina
Outbound truckload demand from Charlotte, North Carolina, finally found a floor after dropping to a yearly low last week.
The Outbound Tender Volume Index in Charlotte leveled out after taking a 20-point loss to 194.5 last Thursday — its lowest value since February 2021 — and only gained 0.3% over the weekend.
Inbound tender volumes are roughly where they were this time last month, seeing only a 1% increase in October. The imbalance between the two flows plunged the Headhaul Index down 71% to -54.7.
There is a consistent amount of inbound capacity but a declining level of outbound volumes. Since Oct. 2 the Outbound Tender Reject Index is up 153 bps to 5.9%, moving above the national average of 5.2%. This rise in rejections indicates that carriers are trying to book more spot freight or deadheading out of Charlotte into a more favorable headhaul 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.
Last week retail diesel prices were decreasing quickly, but this week they are swinging back to over $5 per gallon.
Starting last Wednesday prices began to rise at an alarming rate and are currently $5.07 per gallon, erasing the entire last month’s worth of declines.
Retail prices started to rise just as OPEC+ decided to begin cutting production by 2 million barrels a day in November.
The spread between retail and wholesale diesel prices is collapsing as the retail prices start to surge. When the spread moves down like this, the boost in the carrier’s bottom line from fuel surcharges diminishes. The Retail to Wholesale Fuel Spread in SONAR is at its lowest value on record since 2018: 59 cents per gallon.
Large carriers have contracts with certain fuel stations that charge them a rack price that is usually lower than the actual retail price, but then charge the customer the retail price on a fuel surcharge and allow them to essentially pocket the spread between the two.
Lane to watch: Charlotte to Atlanta
As volume declines out of Charlotte, the spot market is heating up as carriers search for better rates and markets to enter.
Outbound rejections from Charlotte began to rise on Oct. 2, and the spot market rate from Charlotte to Atlanta is up 20 cents in the same time frame to $3.35 per mile — 71 cents above the national average. If rejection rates continue to increase, these spot rates will continue to follow suit.