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USA LOGISTICS MARKET ANALYSIS 1/27/2022


Today’s lanes to watch: Thursday, January 27, 2022


Takeaways for today's lanes:

  • Outbound volumes hitting 30-day highs in Grand Rapids have brought spot rates up with them.

  • Atlanta to Dallas is showing early signs of tightening as spot rates tick higher.

  • Spot and rejection rates continue to plummet from Ontario to San Antonio.

Grand Rapids to Harrisburg – Consistently increasing outbound volumes lead to some rates climbing.

FreightWaves TRAC Market Dashboard – Grand Rapids to Harrisburg


Highlights:

  • Grand Rapids outbound tender volumes have hit a 30-day high and are continuing to climb steadily.

  • Headhaul indices in both markets have been slowly climbing (5% week-overweek [w/w] in Grand Rapids and 9% in Harrisburg), signaling some capacity coming to the markets.

  • Harrisburg's outbound tender rejection volumes have dropped 3% (to 23%) w/w

What does this mean for you?


Brokers: Rejection rates are continuing to climb. For the most advantageous pricing, secure capacity early and bid on the higher end of things. Rates over $5.00/mile are coming quickly, so be sure to prioritize this lane and let your team know that there is major upward pressure on spot rates.


Carriers: Get some loads into Harrisburg if you can. The high Headhaul Index shows a fair amount of excess capacity, and if you can get there work is bountiful. Pricing power on this lane will continue to stay in your favor. Hold onto those rates.


Shippers: Tender lead times in both markets are averaging 3 days. Keep ahead of schedule as much as possible to maintain consistent rates and capacity. Ship now while you have the chance, before capacity starts to tighten again.


Atlanta to Dallas – Tender rejection rates are climbing again out of Atlanta.

FreightWaves TRAC Market Dashboard – Atlanta to Dallas


Highlights:

  • Atlanta’s outbound tender rejection rate hit its highest level since the holiday period, increasing nearly a full percentage point (to 18.24%) this week.

  • The average spot rate to Dallas has been relatively flat over the past two weeks but is showing early signs of upward pressure with an uptick of a few cents per mile on Tuesday.

  • Dallas outbound rejection rates bottomed out around 13.5% earlier this week but are starting to slowly rise once again. They are still at one of the lowest points of the past two years

What does this mean for you?


Brokers: Keep an eye on Atlanta capacity and pad margins by a few cents per mile in this lane. There are early signs of destabilization, but nothing severe yet.


Carriers: Accept more loads into the Atlanta market as capacity is showing some small early signs of tightening. This means increasing reload potential, but be aware that the Dallas market has stabilized significantly over the past several months and will produce fewer spot market opportunities.


Shippers: Increase lead times in this lane and double check with your carriers on loads out of the Atlanta market to ensure compliance and reduce the potential for service failures.


Ontario to San Antonio – San Antonio has some of the highest compliance rates in the U.S.

FreightWaves TRAC Market Dashboard – Ontario to San Antonio


Highlights:

  • Spot rates have fallen nearly 30 cents per mile to start the year in this lane as rejection rates have fallen from over 17% to 11.50%.

  • Ontario’s outbound rejection rate has fallen from 13.6% to 11.5% over the past week, accelerating its decline.

  • San Antonio’s outbound rejection rate has fallen from over 11% to 6.8% since the start of the year and is among the least-rejected outbound markets in the U.S.

What does this mean for you?


Brokers: Expect downward pressure on spot rates in this lane to continue and potentially accelerate. Ontario is in a stabilizing cycle as carriers have improved their availability in this market due to rate inflation. Rates over $4 per mile are too high.


Carriers: Expect declining spot market availability in the Ontario market especially in this lane. San Antonio will not offer a lot of transactional opportunities, so make sure the rates pay for repositioning to Houston or Dallas, which they all should at this time.


Shippers: Do not pay more than $4 per mile in this lane on the transactional market. If you are seeing less than 85% compliance on this lane over the past few weeks and you are paying more than $3.20 per mile (including fuel) it may be time to evaluate your carriers.

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