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USA LOGISTICS MARKET ANALYSIS 11/16/2021


Today’s lanes to watch: Tuesday, November 16, 2021


Takeaways for today's lanes:

  • Rejection rates increase on the Los Angeles to Atlanta lane as capacity tightens.

  • Most spot rates are over $3.50 per mile in Memphis to Jacksonville according to FreightWaves TRAC.

  • Baltimore to Indianapolis capacity is likely to tighten as the Headhaul Index increases over 18% week-over-week (w/w).

Los Angeles to Atlanta – Dry van rejection rates increase to 20.24% as spot rates increase on the LAX – ATL lane.


SONAR Tickers: VOTRI.LAXATL, VOTRI.LAX/VOTRI.ATL, VOTVI.ATL


Highlights:

  • Dry van rejection rates increase to 20.24% on the LAX – ATL lane, which is well above the LAX market average of 16.17%.

  • Dry van rejection rates have increased slightly in the Atlanta market to 15.29% as freight volumes rebound to 413.50 index points.

  • Atlanta shippers have decreased dry van tender lead times to 2.72 days, but market conditions could tighten as we approach the Thanksgiving holiday.

What does this mean for you?


Brokers: Market conditions remain tight in the Los Angeles market as shippers struggle to find capacity for their loads. Brokers should search the spot market for dry van loads that run across the LAX – ATL lane, and increase their bids since rejection rates are trending upward on the lane. Average spot rates for carriers are around $3.57 all-in rpm according to SONAR’s Market Dashboard, suggesting that brokers should start their bids around $9200.00 all-in to clear a 15% margin.


Carriers: Carriers with excess capacity in the Los Angeles market should search the spot market for dry van loads that deliver into the Atlanta market. SONAR’s Market Dashboard shows a range from $3.49 - $3.70 all-in rpm for spot rates on this lane, but shippers are willing to pay more if they are in dire need to ship their freight. The Atlanta market is still a decent market for carriers with rejection rates just above 15% and trending upward. Plan ahead since Atlanta’s dry van Headhaul score is below 0.00.


Shippers: Atlanta shippers need to increase their dry van tender lead times since rejection rates are starting to trend back upward. Volatility in spot rates will increase as we approach the Thanksgiving holiday, so try to ship the majority of your goods this week. Secure capacity as early as possible, and avoid putting any loads on the spot market for on-demand capacity. Memphis to Jacksonville – Memphis rejection rates remain volatile.


SONAR Tickers: OTRI.MEM, OTRI.MEMJAX, OTRI.JAX, OTVI.JAX, OTVI.SAV


Highlights

  • Memphis’ outbound rejection rate has been much more volatile over the past few weeks, bouncing between 27% and 32%.

  • Lane rejection rates to Jacksonville have fallen under the Memphis market average, but are still relatively high in relation to the national average.

  • Jacksonville’s outbound rejection rates have fallen dramatically since this summer as demand has eased. There is still consistent outbound demand coming out of nearby Savannah.

What does this mean for you?


Brokers: Expect continued volatility in this lane this week with some increasing upward pressure on spot rates with a wide range between carriers’ prices. Jacksonville demand is slowing, but carriers will still have a good reason to move in this direction thanks to Savannah.


Carriers: Expect an increasing need to drive to Savannah out of Jacksonville for reloading. Rejection rates are still well above the national average in this lane with most all-in spot rates over $3.50 per mile according to TRAC, which should cover repositioning costs.


Shippers: Keep this lane as a higher priority for finding coverage until rejection rates stabilize at a lower level. Carriers have been inconsistent in covering this lane on the contract side and spot rates have become polarized. Target carriers that have consistent outbound freight from this destination.


Baltimore to Indianapolis- The 18% increase in the Headhaul Index week-over-week (w/w) is likely to cause capacity to tighten further in the days ahead.


SONAR Tickers: OTVI.BWI, IOTI.USBAL, OTRI.BWI, OTRI.BWIIND


Highlights

  • Baltimore outbound tender volumes are up 5%w/w, signaling that demand for outbound capacity has increased significantly from last week.

  • The Headhaul Index in Baltimore is up 18% w/w, signaling that there is a growing imbalance between inbound and outbound volumes.

  • Baltimore outbound tender rejections are up 2.4%w/w, signaling that capacity has likely tightened w/w.

What does this mean for you?


Brokers: The 18% increase week-over-week (w/w) in the Headhaul Index is signaling that capacity is likely to get even tighter in the days ahead. With rejections already up 2.4% w/w, and the largest peak season import volumes having already arrived into the Port of Baltimore, it is reasonable to expect that the Baltimore market will likely remain tight for at least the next month.


Carriers: Stay firm on your rates coming out of Baltimore. An 18% w/w increase in the Headhaul Index, and rejections already up 2.4% w/w, pricing power is likely to shift even further into your favor. With the peak season import volumes that have already arrived into the Baltimore market, you can expect demand for truckload capacity to remain high throughout the remainder of 2021.


Shippers: Your shipper cohorts in the Baltimore market have outbound tender lead times averaging 2.2 days, but with outbound volumes on the rise, shippers will need to get these lead times closer to 3.5 to 4 days if possible. This will help ensure your carriers/brokers have adequate lead time to secure capacity while conditions keep tightening in the weeks ahead.

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