The highlights from Wednesday’s SONAR reports. 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.
Lane to watch: Boston to Chicago
Overview: Spot rates are up 35 cents per mile to start the year.
Highlights:
- Spot rates are up 35 cents per mile in this lane since the start of the year with nearly one-third of the increase coming in the last four days.
- Boston’s outbound rejection rate increased from 12.65% on the 18th to 16.5% on the 21st before sliding back a little to start the week.
- Chicago’s outbound rejection rates continue to trend above their six-month average of just over 20%. The long-running trend continues to be for tightening.
What does this mean for you?
Brokers: Keep this lane as a high priority for the rest of the week. Rejection rates are pulling back and spot rates have been flat for a few days, suggesting this may be a peak. There is a potential for a Nor’easter this weekend, which may extend or amplify this trend into next week.
Carriers: Look to the spot market if you are trying to exit the Boston area as spot rates are at multi-month highs. There are signs this trend is easing, but there is also a weather system with heavy snowfall potential hitting the region this weekend. Make sure your inbound Boston loads pay for the potential delays.
Shippers: Hold any transactional freight that can wait. Double-check with your contracted carriers on any freight moving over the weekend or early next week. Make sure you are ready for any potential service delays due to the weather.
Watch: Carrier Update
Lane to watch: Memphis to Dallas
Overview: Capacity in the Memphis market remains tight, but carrier compliance rates have increased from 2021 levels.
Highlights:
- The Memphis market is tighter than most with an outbound van tender rejection rate of 27.0% compared to the 19.6% national van tender rejection rate.
- Brokers are currently paying an average of $3.70/mile, including fuel, for on-demand capacity in the lane. Meanwhile, $3.83/mile and $3.59/mile are the spot rates in the 67th and 33rd percentiles, respectively.
- The average tender lead time for loads leaving Memphis is 2.4 days, down from 3.5 days in late December and just below the national average of 2.5 days.
What does this mean for you?
Brokers: Keep your rates elevated. While van carriers are rejecting a smaller portion of outbound Memphis loads than they were most of last year, that is due to higher contract rates. It has not translated to lower spot rates in the lane, which are about $0.30/mile higher than they were one month ago.
Carriers: Heading to Dallas is a mixed bag for carriers. The 13.2% Dallas van outbound tender rejection rate indicates that carriers will likely find fewer spot loads in Dallas than in most markets. However, the route can be completed in one full day and it should be easy for carriers to get reloaded in Dallas given its headhaul status (the Dallas Van Headhaul Index is 113.7).
Shippers: The challenge with covering this lane will be finding capacity in Memphis. Carriers are currently rejecting 27% of outbound dry van loads. However, it should be easier to keep outbound Memphis loads out of the spot market than it was last year when Memphis tender rejection rates were typically in the mid-30s. Keep lead times extended past the 2.4-day average to help secure capacity.
Watch: Shipper Update
Lane to watch: St. Louis to El Paso (Texas)
Overview: Capacity is tightening in St. Louis, but loosening in El Paso.
Highlights:
- St. Louis volumes have hit a two-month record high, with rejections hitting almost 30%. The market is continuing to show signs of tightening.
- El Paso rejections have dropped almost 10% from last week (down to 16%), signaling that capacity is loosening.
- Market rates for this lane are stabilizing after a short spike a week ago.
What does this mean for you?
Brokers: This lane has shown that it has mostly stabilized (meaning a consistent rate of $2.72 per mile). Rejection rates are yo-yoing in St. Louis but are not signaling a major change in the market.
Carriers: Spot rates are going to continue to be lucrative in St. Louis as high rejection rates signal the market is tightening.
Shippers: Contracted rates out of El Paso are going to be good, but tight in St. Louis. Add some more lead time on shipments in St. Louis.
