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USA LOGISTICS MARKET ANALYSIS 1/7/2022


Today’s lanes to watch: Friday, January 7, 2022


Takeaways for today's lanes:

  • Surprisingly, spot rates are still on the rise in the Seattle to Los Angeles lane.

  • Carriers are more accepting of freight from Chicago to Dallas than in most outbound Chicago lanes as Dallas becomes a stronger headhaul market.

  • Kansas City to Atlanta capacity is likely to remain tight in the week ahead with rejections up over 5% week-over-week (w/w)

Seattle to Los Angeles – Seattle’s outbound rejection rate tops 25%.

SONAR Market Dashboard Spot Rates from Seattle to Los Angeles


Highlights:

  • Seattle’s outbound tender rejection rate has jumped from just over 15% to 25% since December 28.

  • FreightWaves TRAC spot rates in the Seattle to Los Angeles lane have increased 16 cents per mile since Christmas to $2.48 per mile.

  • Los Angeles’ outbound rejection rate has fallen from over 18% to 16.3% since the start of the year.

What does this mean for you?


Brokers: Increase your priority for covering this lane. Scour the spot market if you have carriers looking for loads out of this normally oversupplied area. Pad margins and expect upward rate pressure.


Carriers: Divert more capacity to the spot market out of this area, but keep an eye on the weather, which has been extreme over the past month. Look to the spot market if you need a load out of this market. Los Angeles is still a strong market, though not as strong as it was to end the year.


Shippers: Double check with all your carriers in this lane and out of Seattle. This is normally an easy market to manage for capacity, but conditions changed significantly in 2021. Increase lead times to improve your chances for securing capacity.


Chicago to Dallas – Carriers are more accepting of freight from Chicago to Dallas than in most outbound Chicago lanes as Dallas becomes a stronger headhaul market.


SONAR Tickers: VOTRI.CHIDAL, LOTRI.CHI, VOTRI.CHI, VHAUL.DAL


Highlights:

  • The van tender rejection index in the lane is 21.0%, compared with the 27.3% tender rejection rate for all long-haul outbound Chicago loads.

  • The door-to-door intermodal spot rate to move 53’ containers of $3.27/mile is only 2% below the dry van spot rate of $3.34/mile found in SONAR’s Market Dashboard.

  • Dallas should be one of the easier markets for dry van carriers to get reloaded given its current Van Headhaul Index of 101.

What does this mean for you?


Brokers: Raise your rates slightly in order to preserve margins given that dry van spot rates have increased ~$0.10/mile since right before Christmas without any subsequent easing. When bidding for capacity, keep in mind that average dry van spot rates are $3.34/mile while $3.61/mile and $3.10/mile represent spot rates in the 67th and 33rd percentile, respectively.


Carriers: Accept tendered loads. While the Dallas outbound tender rejection rate of 18.4% is below the national van outbound tender rejection rate of 21.3%, it should be easy to get reloaded in Dallas. The rising Van Headhaul Index in Dallas, which increased from 66 in late December to 101 currently, suggests that the market is likely to tighten in the coming days.


Shippers: SONAR data show that the spread between dry van and domestic intermodal spot rates is too narrow to make intermodal worthwhile for most shippers. Most shippers will want to use the highway and keep lead times extended to at least the 3-day average for all long-haul Chicago outbound loads to help secure capacity.


Kansas City to Atlanta – Capacity is likely to remain tight in the week ahead with rejections up over 5% w/w.

SONAR Market Dashboard Spot Rates from Harrisburg to Dallas


Highlights:

  • Kansas City outbound tender volumes are up 11% w/w, signaling an increase in demand for truckload capacity.

  • The Headhaul Index in Kansas City is up 8% w/w, signaling that the large imbalance between inbound and outbound truckload volumes is easing.

  • Kansas City outbound tender rejections are up 5.6% w/w, signaling that capacity is likely to remain tight for the immediate future.

What does this mean for you?


Brokers: Capacity is not as tight on the Kansas City to Atlanta lane as it is for the entire Kansas City market. However, with rejections up over 5.6% w/w, the Kansas City market is likely to remain tight in the week ahead. This is especially true given the 8% increase w/w in the Headhaul Index, which was driven primarily by the 11% increase in outbound volumes w/w.


Carriers: Stay firm on your rates for your outbound Kansas City loads, because there is significant upward pressure coming from the 5.6% w/w increase in outbound rejections. With outbound tender rejections much higher than the national average, you still have pricing power in your favor for outbound Kansas City lanes.


Shippers: Your shipper cohorts currently have tender lead times at 3.7 days. However, these likely need to be pushed to 4 days to ensure proper coverage in the Kansas City market, which has seen a 5.6% increase in rejections w/w.

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