The highlight reel 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.
Lanes to watch
By Zach Strickland, director, Freight Market Intelligence
ELIZABETH (New Jersey) to CHICAGO
Summary: Rising intermodal volume is an indicator that intermodal congestion is easing.
- The daily average of domestic and international intermodal volume was 498 containers/day and 702 containers/day, respectively, in the past week. That volume represents one-month changes of 8% and 22%, respectively.
- The most recent domestic intermodal spot rate in the lane is $1.45/mile, including fuel surcharges, which is well below the most recent dry van quote of $2.30/mile, also including fuel surcharges.
- The Chicago inbound tender rejection rate has declined from 8% in late September to 2.8%.
What does this mean for you?
Brokers: Data suggests that intermodal congestion is easing somewhat, but a daily average of only 17 empty domestic intermodal containers moved in the lane in the past week. Therefore, equipment availability may create a constraint when brokering intermodal loads.
Carriers: Highway carriers may find fewer highway loads in the lane as intermodal volume rises. In light of the excess intermodal capacity, loads tendered in this lane will likely be highly time-sensitive, so be sure to get compensated accordingly.
Shippers: Shippers are more likely to be successful in utilizing rail intermodal to get goods to Chicago in a timely manner than they had been in recent weeks. The recent increase in intermodal volume is an indicator of congestion easing at least a little.
NASHVILLE to KNOXVILLE (Tennessee)
Summary: Dry van rejection rates increase from 26.27% to 31.40% on the BNA–TYS lane.
- Dry van capacity tightens in the Nashville market, pushing rejection rates up to 31.40% on the BNA – TYS lane.
- Dry van rejection rates have declined in the Knoxville market, but remain elevated at 31.45%.
- Knoxville shippers decrease dry van tender lead times to 2.73 days as rejection rates decline in the market.
What does this mean for you?
Brokers: A sharp increase in dry van rejection rates on the BNA–TYS lane indicates a rise in spot rates for on-demand capacity in the lane. Brokers should search the spot market for dry van loads that run across the BNA–TYS lane, helping shippers find capacity for their loads. Increase your bids, since rejection rates jumped 5 percentage points in four days, but keep downward pressure on carrier rates.
Carriers: Dry van carriers with excess capacity in the Nashville market should search for loads that deliver into the Knoxville market. Rejection rates on the lane have jumped 5 percentage points in four days, which will allow carriers to increase their spot rates for on-demand capacity. Rejection rates are declining in the Knoxville market, but remain elevated at 31.45%, so carriers should search early for their next load from the Knoxville market.
Shippers: Knoxville shippers have decreased their dry van tender lead times to 2.73 days as rejection rates trended downward in the market, but rejection rates remain extremely high at 31.45%. Shippers need to increase their tender lead times past 3 days, and secure capacity as early as possible. Monitor rejection rates and continue to push carrier rates down if rejection rates continue to fall.
HOUSTON to DALLAS
Summary: Houston outbound rejection rates hit an annual low.
- Houston’s outbound rejection rate dipped below 11% for the first time since July 2020, as the market continues to see a consistent supply of inbound freight.
- Lane-specific rejection rates to Dallas have not hit an annual low but have trended lower since Labor Day. They continue to be well above the Houston market average with a value over 17%.
- Dallas’ outbound rejection rate has plateaued to start October with values consistently over 22%. The market continues to see pressure from a heavy undersupply situation.
What does this mean for you?
Brokers: Expect some continued slow easing in this lane with more capacity becoming available. Rejection rates remain elevated because carriers are being selective, but the market is oversupplied. This lane is less attractive due to its awkward mileage.
Carriers: Accept a few more loads in this lane. Upward rate pressure is persistent but decreasing. Dallas is exhibiting strong reload potential and that trend does not appear to be waning. Chaining together an up and back in a day should still be a fruitful option.
Shippers: Expect some slight easing conditions in this lane but keep it as a higher priority in relation to other lanes with lower rejection rates such as Memphis. If your compliance has been below 83% over the past week, it is time to re-evaluate your carrier base in this lane.
On the spot
Executive Publisher Kevin Hill joins Senior Retail Analyst Andrew Cox for this week’s On the Spot, focusing on and discussing the current spot rate markets.
Outbound Los Angeles
By Jim Knuerr, SONAR account executive
Looking at the Los Angeles marketplace (Ontario and LAX), we see a significant drop in rejection rates from 27% in 2020 to 16% in 2021. While over the same period, you will see in the second graph below, all lanes leaving LAX have had a rate increase between $200 and $1,300 over the same period.
This year, shippers are seeing a lower rejection rate but also paying significantly more. Knowing market conditions, rejection rates and linehaul could be fantastic value for all organizations, shippers, carriers, and brokers.
Carrier and shipper updates
Zach Strickland, director of Freight Market Intelligence at FreightWaves, and Senior Retail Analyst Andrew Cox take a look at spot rates in the Carrier Update presented by PowerFleet.
Lead Economist Anthony Smith and Senior Retail Analyst Andrew Cox look at job openings, rising inflation and consumer spending in the Shipper Update.
Market update webinar on Thursday
FreightWaves will host an October 2021 Market Update webinar on Thursday, Oct. 14, at 2 p.m. ET. The monthly Market Update webinar provides data around the latest events affecting the freight market. As peak season approaches, data is key to navigating volatility in the market, and we will be exploring the most current information available to reveal what to expect this holiday season.
Topics for October include:
• How long can production remain elevated?
• Consumer stamina
• Just-in-time vs just-in-case
• Peak season outlook