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USA LOGISTICS MARKET ANALYSIS 1/11/2022


Today’s lanes to watch: Tuesday, January 11, 2022


Takeaways for today's lanes:

  • Spot rates are plateauing from Atlanta to Harrisburg as rejection rates fall.

  • Rejection rates are higher than normal out of Omaha.

  • Atlanta has become a more favorable destination for carriers as outbound demand for dry van capacity outpaces inbound demand.

Atlanta to Harrisburg – Rejection rates heading into the Northeast remain well above the market average.

SONAR Tickers: OTRI.ATL, OTRI.ATLMDT, OTRI.MDT


Highlights:

  • Atlanta’s outbound rejection rates have fallen back from their holiday levels to just above 16%.

  • Lane rejection rates to Harrisburg remain among the highest out of the market, but have also declined from their peak values. Spot rates have also stopped increasing in this lane.

  • Harrisburg’s outbound rejection rate has dropped from 23.7% to 22.2% since the start of the year.

What does this mean for you?


Brokers: Expect rates to stop climbing as capacity is easing out of the Atlanta market. Keep loads moving into the Northeast a priority out of Atlanta as contract compliance remains low.


Carriers: Do not expect as much spot market activity out of Atlanta this week because rejection rates are on the decline. Loads moving into the Northeast will provide the highest margins if you are confident in reloading out of the Harrisburg area.


Shippers: Keep lead times high for loads moving in this lane, but compliance in general should be improving out of Atlanta. Expect this lane to be slightly easier to cover in the coming weeks.


Omaha to Dallas – Rejection rates are still holding strong in the Midwest.

SONAR TRAC Market Dashboard Omaha-Dallas


Highlights:

  • Omaha's tender rejection index has jumped 7% in the last week, markedly higher than it started at the beginning of the year.

  • The increase in outbound rejection rates does not suggest any significant decline in spot rates or volumes.

  • Dallas outbound rejection rates have dropped from 19% to 16.5% since the beginning of the year (-3% over last week).

What does this mean for you?


Brokers: Spot rates for this lane have declined since the end of the year, but are still inflated compared to a month ago. Rates will be higher coming out of Omaha; pad rates or add lead time to the shipment.


Carriers: The tight market in Omaha has led to increased rates; increase offerings accordingly. Look to the spot market if you need a load out of this market.


Shippers: Be aware you may have to increase your lead time in this market to ensure your load is covered at a fair rate. Double check with carriers for backhaul opportunities to avoid having to pay inflated spot market rates.


Chicago to Atlanta – Atlanta becomes a more favorable destination for carriers as outbound demand for dry van capacity outpaces inbound demand.

SONAR Tickers: VOTVI.ATL, VITVI.ATL, VHAUL.ATL


Highlights:

  • The current average dry van spot rate that brokers are paying for on-demand capacity is $4.10/mile, including fuel surcharges, up from $4.02/mile at the beginning of the year.

  • The domestic intermodal spot rate is $3.73/mile, including fuel surcharges, 9% below the latest dry van spot rate.

  • The average daily domestic intermodal volume in the lane in the past week is 214 containers/day, compared to 275 before the holidays.

What does this mean for you?


Brokers: Even though the tender rejection rate in the lane has moderated since the holidays, you may want to raise your rates slightly in order to preserve margins given the recent increase in rates that other brokers are paying for purchased transportation. When bidding for capacity, keep in mind that other brokers are paying an average of $4.10/mile in the lane with $4.40/mile and $3.82/mile representing rates in the 67th and 33rd percentiles, respectively.


Carriers: Some carriers may be reluctant to head to Atlanta because its outbound dry van tender rejection rate of 15.4% is well below the 20.1% national rate. But, carriers should also keep in mind that the rising Atlanta Van Headhaul Index (which increased from -10 in late December to 27 currently) suggests that it should be easy to get reloaded in Atlanta. The increase in the Headhaul Index also indicates the market is tightening.


Shippers: The current spread between intermodal and dry van spot rates may not be enough to entice shippers to utilize rail intermodal, particularly because the latest intermodal volume in the lane suggests that intermodal networks are not running as fluidly as is optimal. For shippers using the highway, keep lead times extended to at least the 2.7-day average to help secure capacity.

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