SONAR observations for November 10: Atlanta to Houston, focus on Grand Rapids, more


Highlights from Wednesday’s SONAR reports. For more information on SONAR, the industry’s fastest freight forecasting platform, or to request a demo, Click here. Also, be sure to check the latest SONAR update, TRAC – the most recent spot rate data in the industry.

Tracks to watch

By Zach Strickland, Director, Freight Market Intelligence

ATLANTA to HOUSTON

Overview: Brokers should lower bids as bid rejection rates decrease.

Strong points:

  • The in-lane dry van bid rejection rate declined 120 basis points (bps) over the past week and fell 210 basis points over the past two weeks to 15.9%, or 276 basis points less than the current national rejection rate for dry van tenders.
  • The recent drop in the rejection rate for in-lane dry van offers is both due to carriers becoming more compliant with departures from Atlanta (rejection rate of 14.4% vs. 19% a month ago ) and inbound loads from Houston (15.2% reject rate vs. 19% a month ago).
  • SONAR shows both the Atlanta and Houston markets as backhaul markets with Van Headhaul Index scores of -2.7 and -12.4, respectively. This contrasts with summer and early fall, when Atlanta was a major primary transportation market and Houston was even more of a return transportation market.

What does this mean to you?

Brokers: Lower your bids to reflect the looseness in the lane. Prefer coverage of this route given the reluctance of some carriers to head to Houston. When negotiating with carriers, highlight ocean import shipping data that shows Port of Houston shipments 30% higher than a year ago, making Houston a larger freight market. balanced than it usually is.

Carriers: If you are heading to Houston, make sure you are compensated as Houston is a relatively loose freight market than most currently (13.4% rejection rate of outgoing dry van offers vs. 18.4% in the national level) and Houston’s current status as a return market (although imports are high demand makes the Houston market less unbalanced than it usually is).

Senders: The average bidding time for inbound dry van loads in Houston is 3.1 days, which is higher than the national average of 2.6 days and indicates that shippers are keen to secure capacity for incoming loads from Houston. Therefore, extend your bidding time beyond 3 days to ensure capacity.


MEMPHIS in DALLAS

Overview: Rejection rates for dry vans increase to 24.85% on the MEM-DAL track.

Strong points:

  • The Memphis dry van Headhaul score climbs to 43.95 as capacity tightens, pushing rejection rates up to 24.85% on the MEM-DAL path.
  • The Dallas Dry Van Headhaul score declined, but remains high at 83.78, indicating capacity is still tight in the market.
  • Dallas shippers cut bidding times for dry vans to 2.82 days as the market weakens, but rejection rates rebounded to 17.23% yesterday.

What does this mean to you?

Brokers: Capacity is tightening in the Memphis market and rejection rates have jumped to 24.85% on the MEM-DAL track as the Dallas market weakens. Brokers should research the spot market for loads that cross the MEM-DAL lane, helping shippers find capacity for their loads. Increase your bids as carriers will ask for more to deliver to Dallas.

Carriers: Dry van carriers with excess capacity should look to the spot market for loads that deliver to Dallas. The Dallas market has softened, but capacity is still tight and rejection rates rebounded to 17.23% yesterday, halting the decline. SONAR’s Marketplace Dashboard shows yesterday’s spot rates at $ 3.47 RPM all inclusive, with some rates as high as $ 3.65 RPM all inclusive. Track return rates remain high at $ 2.78 RPM.

Senders: Dallas shippers reduced bidding times for dry vans to 2.82 days as market conditions softened, but rejection rates rebounded to 17.23%, indicating that the market could start to tighten again. Shippers are expected to increase bidding times to around 3 days and monitor changes in Headhaul score and rejection rates over the next week. Continue to secure capacity as early as possible and avoid the high tariffs charged by carriers in the spot market.


ELIZABETH (New Jersey) at CINCINNATI

Overview: Elizabeth’s capacity continues to decline as demand increases.

Strong points:

  • Elizabeth’s outgoing rejection rate rose from over 20% on Oct.31 to 16.7% on Nov.8, supporting both short-term and long-term easing. Outgoing demand has been on the rise since early August.
  • Rejection rates by track to Cincinnati have fallen just over 1% over the past week and remain well above the Elizabeth market average.
  • Cincinnati’s outbound rejection rate has fallen more than two percentage points since Oct. 22, but outbound demand has increased nearly 3% over the same period.

What does this mean to you?

Brokers: Expect a slight easing down this path as contract compliance increases. Spot rates could slowly fall in the near term until the holidays start to put capacity back under pressure over the next few weeks.

Carriers: Expect less spot market activity on this route, but demand for contracts remains strong in both source and destination markets. Divert some more capacity to contract freight down this path. Expect increased reloading potential outside of Cincinnati with contract and spot volumes rising from late September or early October levels

Senders: Push freight down this lane now as Elizabeth’s capacity dwindles. The holiday crunch has yet to begin and capacity is easier to find in this route than it has been since July.


Watch: TRAC demo


Focus on… the Grand Rapids market (Michigan)

By Travis Winnon, SONAR Account Manager

The Grand Rapids, Michigan market is finally slowing after a long, strong trend above national OTRI averages.

The strong streak of high OTRI levels in Grand Rapids has been supported by a large number of outbound tenders, but over the past week or so, outbound freight volumes have started to slow.

In response to lower volumes, Grand Rapids, a market that last week was 6 points above national OTRI averages, has fallen from 27% OTRI to 21% OTRI (19% national average).

Brokers: Carrier capacity should ease with fewer available loads available.

Carriers: You are losing a bit of leverage in Grand Rapids right now and the market has been trending down for the past few months. Be aware of market conditions when making strategic decisions and expect to see lower spot rates.

Senders: Finally relief! Let your carrier partners know what’s going on to try and secure capacity at a lower rate. It is time to push back the contract carriers who have also reduced their charges.


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