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SONAR sightings for May 19: Baltimore to Chicago, carrier update, more

The highlights from Thursday’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.

Lane to watch: Baltimore to Chicago

Overview: Spot rates are likely to increase slightly in the coming days as the Headhaul Index increases 12% week-over-week (w/w).

Highlights:

  • Baltimore outbound tender volumes are up 7% w/w, signaling that demand for outbound capacity has increased significantly from last week.
  • The Headhaul Index in Baltimore is up 12% w/w, signaling that there is a growing imbalance between inbound and outbound volumes. 
  • Baltimore outbound tender rejections are up 3% w/w, signaling that capacity is likely tightening significantly in this specific market. 

What does this mean for you?

Brokers: 
The 12% increase w/w in the Headhaul Index is signaling that capacity is likely to get even tighter in the days ahead. With rejections already up 3% w/w, it is reasonable to expect that the Baltimore market will tighten enough to help offset the loosening of capacity we are seeing nationwide. So in the Baltimore market, localized conditions are looking quite a bit different than other major truckload markets. 

Carriers: Stay firm on your rates coming out of Baltimore. With a 12% w/w increase in the Headhaul Index, and rejections already trending upward (+3% w/w), pricing power is likely to shift back into your favor slightly in the days ahead. Even though the loosening conditions nationwide have been putting significant downward pressure on spot rates for the last few weeks, Baltimore’s conditions are signaling a tightening of capacity (if only just in the lead-up to Memorial Day).
                            
Shippers: 
Your shipper cohorts in the Baltimore market have outbound tender lead times averaging 2.5 days, but with outbound volumes on the rise, shippers will need to get these lead times closer to three to 3.5 days if possible. This will help ensure your carriers/brokers have adequate lead time to secure capacity while conditions tighten in the days ahead.  


Watch: Carrier update


Lane to watch: Jacksonville, Florida, to Indianapolis

Overview: Jacksonville rejection and spot rates are edging higher.


Highlights:

  • Spot rates have risen 4% in this lane and have become increasingly dispersed since the end of April. 
  • Jacksonville’s outbound rejection rate has increased from 9% to 11% since May 6. 
  • Indianapolis’ outbound demand has been stable with a rejection rate around 9% this month. 

What does this mean for you?

Brokers: 
Watch out for slightly tightening conditions out of Jacksonville. Rates remain below the market average, but be prepared for weekly increases of 2% to 4%. If you have time to shop the market, it may be worth your while to target all-in rates below $2,200.    

Carriers: Anticipate increasing volume out of Jacksonville. Rates may not break the bank, but tender and spot rate data suggests tightening on the contract and spot market in this and several other lanes. Expect stable conditions in Indianapolis, with little weekly change. 

Shippers: Double-check with your carriers on any loads scheduled out of Jacksonville over the next week. While this area should not be your highest priority, it deserves your attention.


Inflation is still a major pain point in the U.S. economy, though there was a mild easing in the Consumer Price Index (to 8.3% from 8.5% on a year-over-year basis). The slight downward movement came from a subtle downward movement in gas prices. Consumers are still plagued with higher prices and further downward movement is needed. Additionally, household debt is rising (there was an increase of $250 billion during the first quarter of 2022). The increasing prices for goods will be another factor that will keep making it difficult for consumers to purchase both goods and services. The shift to services will continue to keep volumes relatively muted in the coming weeks. 

Retail sales, industrial production and housing starts will be updated in the coming week. Sales have been propped up from inflationary pressures lately (not necessarily the number of goods being sold), and this will still be in effect in the coming week’s release. Manufacturing is shifting into a slower rate of growth but there is still a long runway for this segment and it will continue to keep flatbed trailers active. Housing will be another segment to contribute to flatbed trailers and there are many units that have been authorized but not yet started. However, there will be some softness in the segment as homebuyers pulled purchases forward earlier this year to avoid increasing mortgage rates. Flatbed rejections are still elevated but beginning to show signs of easing, signaling that there may be some cooling trends for both manufacturing and construction, but not overt declines.