SONAR sightings for April 28: Indianapolis to Atlanta, shipper update, more

Brokers: Spot rates from Indianapolis to Atlanta continue to decline due to the difference between the maximum and minimum rate constraint. This appears to suggest that there will be less room to negotiate on the upper limit rate-wise and will require greater internal buying data in order to undercut competition if attempting to book spot loads. If buying capacity for contract awards, continue to focus on maximizing margin as the downward pressure on spot rates indicates carriers are undercutting each other because of less truckload demand. 

Carriers: The declining tender volumes and rejection rates may impact weekly tender commitments from customers, depending on their internal demand planners. Focus on tender compliance and service levels, as the declining spot rates may cause some service-sensitive customers to tender to secondary carriers or utilize brokers for time-sensitive loads. 

Shippers: The overall Indianapolis market continues to experience outbound tender rejection and load volume declines. This provides greater opportunity to expand your routing guide and focus on service levels, as contracted rates remain elevated due to tight capacity during previous bid cycles. If an RFP or mini-bid is in the future, focus on driving down rates for greater transportation savings. 

SONAR as a reference point

Overview: FreightWaves writer John Kingston uses SONAR to reflect that flatbed rates are indeed trending downward.

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Watch: Shipper update

Lane to watch: Nashville, Tennessee, to Chicago

Overview: Rejections are likely to increase further as outbound volumes surge week-over-week (w/w).

Highlights:

• Nashville outbound tender volumes are up 7% w/w, signaling that demand for outbound capacity is increasing from last week. 
• The Headhaul Index in Nashville is up 9% w/w, signaling that there could be a growing imbalance between outbound volumes and inbound capacity.
• Nashville outbound tender rejections are up 339 bps w/w, signaling that capacity could already be tightening from the growing imbalance in volumes. 

What does this mean for you?

Brokers: Nashville tender rejections are already up 339 bps w/w, but with outbound volumes increasing 7% w/w and the Headhaul Index up 9% w/w, capacity could tighten in the days ahead. 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 the supply of available trucks and an increase in demand w/w. Outbound tender rejections have already increased 339 bps w/w, and the Headhaul Index has increased 9% w/w. Pricing power is likely to shift even further in your favor for outbound Nashville lanes. 

Shippers: Your shipper cohorts have increased lead times significantly w/w and are currently averaging 2.9 days. With outbound tender rejections on the rise as well as both outbound volumes and the Headhaul Index, you will likely need to push tender lead times to between three and four days to protect your company from at least some of the upward pressure being put on rates and the resulting tightening of capacity.

Watch: Carrier update