Search

USA LOGISTICS MARKET ANALYSIS 10/27/2021


Today’s lanes to watch: Wednesday, October 27, 2021


Takeaways for today's lanes:


Brokers should prioritize covering the Chicago to Atlanta lane with some carriers avoiding inbound Atlanta loads.


Rejection rates have trended downward in Kansas City, but remain elevated on the Kansas City to Columbus lane. Rejection rates plummet from Ontario to San Antonio


Chicago to Atlanta – Brokers should prioritize covering this lane with some carriers avoiding the Atlanta market


Highlights:


The van tender rejection rate in the lane is 22.1%, which is 230 basis points above the national van rejection rate. The variance is driven by the aboveaverage Atlanta inbound van rejection rate of 25.1%.


The Atlanta Van Headhaul Index of -16 suggests that the reason some carriers are reluctant to head to Atlanta is its current backhaul status.


The door-to-door domestic intermodal spot rate of $3.08/mile, including fuel surcharges, is 13% below the dry van truckload spot rate of $3.54/mile, also including fuel surcharges.


What does this mean for you?


Brokers: Prioritize covering loads in this lane given that many carriers are avoiding Atlanta and raise your rates in the lane to preserve margins. SONAR data shows a rising inbound Atlanta tender rejection rate and dry van spot rates near the high end of their recent range which suggests that brokers may have to pay more for capacity.


Carriers: If accepting loads in the lane, be sure to get compensated for the fact that Atlanta is currently a backhaul market with a van outbound tender rejection rate (16.6%) that is below the national van tender rejection rate (19.8%).


Shippers: The comparison between dry van spot rates and intermodal spot rates, which shows a 13% discount for intermodal, suggest that the market is acting rationally. However, intermodal service levels have often been poor in recent months, particularly in the eastern third of the U.S. Therefore, shippers should only use intermodal in the lane for shipments that do not have tight time requirements.


Kansas City to Columbus – Dry van rejection rates remain elevated on the MCI – CMH lane at 28.10% as the MCI market average falls to 19.77%.



Highlights:


Dry van rejection rates have fallen to 19.77% in the Kansas City market, but the MCI – CMH lane has held well above the market average at 28.10%.


Columbus’ dry van Headhaul score has jumped up to 36.31 as market conditions tighten, which could allow for carriers to increase their spot rates for on-demand capacity.


Columbus shippers have increased their dry van tender lead times slightly to 2.60 days as pressure is applied from the shift in market conditions.


What does this mean for you?


Brokers: Market conditions are softening in the Kansas City market, which has allowed dry van rejection rates to fall to 19.77% as carriers fall back in compliance with their contracted freight. Brokers should search the spot market for loads that run across the MCI – CMH lane, which currently carries a 28.10% rejection rate, but keep your bids elevated even though rejection rates are trending downward on that lane. Push carrier rates down since market conditions are deteriorating in Kansas City, and tightening in Columbus.


Carriers: Dry van carriers with excess capacity in the Kansas City market should search the spot market for loads that deliver into the Columbus market. Rejection rates on the MCI – CMH lane are declining, but remain elevated at 28.10%, which is well above the market average of 19.77%. Market conditions in Columbus have tightened as outbound freight volumes increased, which could increase rejection rates as spot rates start to increase.


Shippers: Columbus shippers need to increase dry van tender lead times since market conditions have tightened in the Columbus market. Outbound tender volumes have increased, pushing the dry van Headhaul score up to 36.31. If these conditions continue, spot rates for on-demand capacity will start to climb, and rejection rates will increase.


Ontario to San Antonio – Inbound demand surges to San Antonio


Highlights:


Ontario’s outbound rejection rate has fallen over two percentage points over the past ten days, pushing it to its lowest value since May.


Strangely, rejection rates to the extremely oversupplied San Antonio market have also fallen significantly and are below the Ontario market average.




San Antonio’s outbound rejection rates are among the lowest in the U.S., below 6%, thanks in large part to the large gap between inbound and outbound demand. What does this mean for you?


Brokers: Expect easing conditions in this lane, but do not expect to lowball the rate and be successful. Carrier rejection rates are strangely low to this market, but it is probably due to contract rates being high enough to cover deadhead to Dallas or another stronger outbound market.


Carriers: Make sure your rates cover significant deadhead out of San Antonio as the market is one of the most oversupplied for its size in the U.S. Rejection rates from Ontario suggest contract rates have risen dramatically over the past few months, leading to much less spot market activity out of San Antonio.


Shippers: Consider increasing your rates if compliance has dropped below the market level of 85% in this lane. Rate increases in lanes like this are some of the more significant in the U.S. thanks to the large consistent imbalance of freight flows that have been exacerbated during the pandemic era

10 views0 comments

Recent Posts

See All