The highlights from Tuesday’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
Los Angeles
The recent holiday makes volume levels difficult to measure, so we will be taking a closer look at rejection rates and how they affect spot rates in each market.
Outbound tender rejections in LA saw a sharp increase over the past week, indicating capacity is tightening and carriers are looking for higher-paying opportunities in the spot market. Since Aug. 29, the Outbound Tender Reject Index is up 136 basis points to 3.3%, bringing LA out of its roughly two-week slump.
For an idea of the effect of these rejection rates in a specific lane, let’s look at LA to Seattle. Right now a trip up the West Coast can bring in 62 cents more than the national average, and rejection rates in this lane are up more than 100 bps in the past eight days to 3.5%. This increase will only push rates up further in the days ahead, evidenced by the historical relationship between the two shown in the image below.
However, it is important to note that the Pacific Northwest is not an ideal place for carriers. The return rate from Seattle to LA is significantly less, at $1.31, which can make it harder to justify taking the elevated rate going in.
Detroit
In Motor City, rejection rates leaving the market have plummeted in the past week. Detroit has been experiencing the highest outbound volumes on SONAR record, which kept rejection rates at a healthy 5%-7% for the past 90 days. However, in the past week tender rejections fell more than 500 bps to 2.5% — the lowest they have been since May 2020.
The decrease in rejections will begin to put downward pressure on spot rates leaving the Detroit market. Average spot market rates from Detroit to Allentown, Pennsylvania, currently sit at $3.48 a mile, 85 cents above the national average, but outbound tender rejections from Detroit to Allentown are down roughly 350 bps in the past week alone. The drop in rejections brought spot rates down with them 6-8 cents, but they seem to have found a floor at their current value. However, that may be subject to change if rejection rates continue to fall.
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.
