SONAR Sightings for Oct. 21: Atlanta to Memphis, Mid-Haul Loads and More

The highlight reel from Thursday'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

ATLANTA to MEMPHIS

Overview: Dry van rejection rates fall to 15.77% in the Atlanta market, but capacity is tightening in the Memphis market. 

Highlights

• Dry van rejection rates fall to 15.77% in the Atlanta market, but the ATL–MEM lane has stayed slightly above the market average at 18.25%.
• Dry van rejection rates have jumped to 34.33% in the Memphis market as the dry van headhaul score climbed to 52.66.
• Atlanta shippers decrease dry van tender lead times to 2.65 days as market conditions soften, and rejection rates trend downward.

What does this mean for you?

Brokers: Market conditions have been softening in the Atlanta market as a surplus of capacity builds in the market, enticing carriers to shift their trucks to a market where conditions are tightening. Brokers should search the spot market for loads that run across the ATL–MEM lane, but hold firm on your bids since rejection rates have only fallen to 18.26% on the lane. Push carrier rates down to create margins on the load.  

Carriers: Carriers with excess capacity in the Atlanta market should search the spot market for loads that deliver into the Memphis market. Accept the rates you are offered since the market conditions are strengthening for carriers in Memphis. Dry van rejection rates have jumped to 34.33% in Memphis, and the dry van headhaul score has climbed to 52.66. Carriers should be able to increase their spot rates on outbound Memphis loads. 

Shippers: As market conditions deteriorate in Atlanta, shippers need to keep downward pressure on carrier rates. Keep tender lead times at or above the national average, and monitor rejection rates for any shifts, adjusting lead times accordingly to help keep carrier rates in decline.

CHICAGO to ELIZABETH (New Jersey)

Overview: Elizabeth becomes a more attractive destination for carriers as outbound demand surges. 

Highlights

• The most recent intermodal spot rate in the lane is $3.29/mile, including fuel surcharges, which is 12% below the most recent dry van truckload spot rate of $3.72/mile, also including fuel surcharges. 
• 525 loaded domestic intermodal containers moved in the lane in the past week, which is down 25% year-over-year (y/y), and is lower than levels in early summer. This suggests a lack of available intermodal capacity in the lane. 
• The dry van tender rejection rate in the lane is 18.7% which is 193 basis points (bps) lower than one week ago. The variance has been driven by a decline in the inbound Elizabeth tender rejection rate, which has declined 281 bps in the past week.

What does this mean for you?

Brokers: Lower your bids in the lane to reflect a declining tender rejection rate in the lane for all inbound Elizabeth loads as carriers have become more willing to head to Elizabeth. When negotiating with carriers, remind them that it will be easy to get re-loaded in Elizabeth and cite the elevated and rising Elizabeth Van Headhaul Index of 78.

Carriers: Elizabeth has become a more attractive destination for dry van carriers in recent weeks – the Elizabeth Van Headhaul Index is 78, the highest level since April.This suggests that carriers should have an easy time getting re-loaded in Elizabeth. Meanwhile, the Elizabeth van outbound tender rejection index is 110 bps below the national van tender rejection rate. 

Shippers: While the spread between intermodal spot rates and dry van spot rates is rational at 12%, shippers should only use rail intermodal for less time-sensitive shipments given the lingering intermodal congestion issues from Chicago to points eastward. Shippers have a better chance of keeping loads out of the spot market than they did a week ago as carriers have shown greater compliance with tenders heading to Elizabeth.

CINCINNATI to ATLANTA

Overview: Outbound tender rejections are likely to increase in the days and weeks to come. 

Highlights

• Cincinnati outbound tender volumes are up 10% week-over-week (w/w), signaling that demand for outbound capacity is increasing.
• The Headhaul Index in Cincinnati is up 14% w/w, signaling that capacity is likely to tighten due to the growing imbalance between inbound and outbound volumes.
• Cincinnati outbound tender rejections are up 164 bps/w, but are likely to increase soon due to the growing imbalance between inbound and outbound volumes.

What does this mean for you?

Brokers: Cincinnati outbound tender rejections have been on a steady upward trend for much of this month, and are expected to move higher in the coming weeks as volumes are likely to grow. Already, there has been a 14% increase w/w in the Headhaul Index, which is signaling that capacity is likely to get tighter.

Carriers: Cincinnati pricing power likely will be shifting further into your favor in the coming days and weeks. Peak season intermodal volumes are arriving in Cincinnati from overseas; more and more are shippers choosing to reroute freight inland via the East Coast from overseas since the West Coast is still experiencing major backlogs of vessels waiting for berths. Keep an eye on outbound tender rejections, and once they start to climb w/w, adjust your pricing to reflect the likely tightening of capacity. 

Shippers: Your shipper cohorts in Cincinnati are currently averaging 3 days in tender lead times, but with outbound volumes and the Headhaul Index on the rise, it would be wise to push your tender lead times closer to 4 days through the next couple of weeks (and possibly months) to ensure you are able to secure capacity if the market begins tightening further (track this via the w/w change in outbound tender rejections).

---

Carrier Update presented by PowerFleet

Zach Strickland, director of Freight Market Intelligence at FreightWaves, and FreightCaster Michael Vincent take a look at the lead times and length of haul in the Carrier Update presented by PowerFleet.

---

A look at mid-haul rejection rates, volumes

By Zach Strickland

The Outbound Tender Rejection Rate Index (OTRI) is a measurement of a carriers' willingness to accept the loads that are tendered to them by shippers under contract terms. OTRI is expressed as a percentage of loads rejected to total loads tendered.

OTRI can be broken down by five different lengths of haul, allowing SONAR users to see load rejection rates based on the distance a load travels from the origin. These include city/local loads (CORTI), short-haul loads (SOTRI), mid-haul loads (MOTRI), tweener loads (TOTRI) and long-haul loads (LOTRI).

In the Map below, SONAR users can view mid-haul rejection rates and volumes, which represent a large percentage of the regional freight for carriers.

Shippers in the Cape Girardeau, Cedar Rapids, Augusta and Des Moines markets are struggling with mid-haul rejection rates over 50%, and mid-haul rejection rates are over 35% in the Memphis, Jefferson City, Rock Island, Tifton, Terre Haute, Quincy, Columbia, Omaha and Raleigh markets.

Carriers will find the most opportunities for mid-haul freight in the Ontario, Atlanta, Dallas, Los Angeles, Harrisburg, Columbus, Joliet, Jacksonville, Indianapolis and Charlotte markets, which are key distribution markets in each region of the nation.     

---

Shipper Update

Lead Economist Anthony Smith and FreightCaster Michael Vincent look at this week's initial jobless claims numbers in the Shipper Update.