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USA LOGISTICS MARKET ANALYSIS 1/12/2022


Today’s lanes to watch: Wednesday, January 12, 2022


Takeaways for today's lanes:

  • Baltimore to Chicago spot rates hit their highest level in nearly three months.

  • Ontario rejection rates have taken a nosedive since the first of the year.

  • Intermodal is no longer an economical alternative for spot shippers in the Kansas City to LA lane.

Baltimore to Chicago – Baltimore’s outbound rejection rates hit a 6-month high.

SONAR Market Dashboard Baltimore to Chicago


Highlights:

  • Baltimore’s outbound rejection rate increased from 14.1% to 26.8% over the past two weeks, hitting its highest value since late July 2021.

  • According to FreightWaves TRAC, spot rates from Baltimore to Chicago have increased 11 cents per mile to $2.70 over the past two weeks.

  • Chicago tender volumes are as high as they were prior to Christmas and trending higher while outbound rejection rates have fallen back below 20%.


What does this mean for you?


Brokers: Increase the priority for covering this normally easy lane and pad margins compared to the previous two weeks’ rate. Do not commit to coverage without securing capacity first.


Carriers: Check the load boards if in need of a move out of Baltimore. Now is the time to accept loads into this normally challenging market on the contracted side.


Shippers: Increase lead times out of Baltimore to try and weather the storm. Capacity should improve over the next week, but chances of falling to the spot market are the highest they have been since last summer, especially if your contracted rates are well below the spot market level.


Ontario to Seattle – Ontario rejection rates have taken a nosedive since the first of the year.

SONAR TRAC Market Dashboard Ontario to Seattle


Highlights:

  • Ontario's rejection rates have decreased almost 4% in the last week (to around 14%).

  • Spot rates are starting to fall after hitting their 30-day highest point.

  • Seattle rejections have come down from the post-holiday spike, but are still at 23%.

What does this mean for you?


Brokers: Ontario is loosening as volumes are increasing and rejection rates are decreasing. Bid lower on freight heading into the market, but stay firm on rates coming out of Ontario.


Carriers: Look for loads that end in markets like Onatario to capitalize on the increase in volumes. Rates should be closer to contractual as the market loosens.


Shippers: Consider moving freight into the Ontario market for reduced shipping rates. Now's the time to ship out of Seattle as the market loosens a little.


Kansas City to Los Angeles – Intermodal is no longer an economical alternative for spot shippers.

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


Highlights:

  • Reflecting the desirability of LA as a destination for carriers, the van tender rejection rate in the lane is 15.2%, well below the 24.4% tender rejection rate for all van loads outbound from Kansas City.

  • The intermodal spot rate in the lane is $2.54/mile, including fuel surcharges, which is up from a low of $1.32/mile in late November.

  • The average dry van spot rate that brokers are paying for capacity in the lane is $1.97/mile, including fuel surcharges, with $2.20/mile and $1.89/mile representing spot rates in the 67th and 33rd percentiles.

What does this mean for you?


Brokers: The $1.97/mile average dry van spot rate that brokers are paying for capacity in the lane has come down from a high of $2.12/mile on January 4th. Therefore, brokers may want to lower their bids in the lane to preserve margins.


Carriers: Accept tendered loads. While the LA outbound van tender rejection rate of 13.7% is well below the national van tender rejection rate of 20.4%, LA is one of the strongest headhaul markets (its Van Headhaul Index is currently at 133).


Shippers: In contrast to late last year, the respective spot rates for dry van and domestic intermodal in the lane mean intermodal is currently uneconomic for spot shippers. With tender rejections well below the national average, look to keep your loads out of the spot market, which should be very doable in the lane.

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