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USA LOGISTICS MARKET ANALYSIS 11/29/2021


Today’s lanes to watch: Monday, November 29, 2021 T


akeaways for today's lanes:

  • In the L.A. to Atlanta lane, spot rates in Market Dashboard show that spot shippers are better off using the highway rather than rail intermodal.

  • Refrigerated capacity tightens rapidly in the Carolinas to start the week.

  • Houston to Memphis capacity is likely to tighten further in the days ahead as the Headhaul Index surges 38% week-over-week (w/w).

Los Angeles to Atlanta – Spot rates in Market Dashboard show that spot shippers are better off using the highway rather than rail intermodal.


SONAR: Market Dashboard - Los Angeles to Atlanta


Highlights

  • The current dry van spot rate in SONAR Market Dashboard is $3.73/mile, including fuel surcharges. Given the high density of data from loads with similar characteristics, it has a lane confidence score of 5/5.

  • Meanwhile, the door-to-door intermodal spot rate in the lane is $4.18/mile, also including fuel surcharges. Therefore, spot shippers have no reason to use rail intermodal in the lane.

  • The van tender rejection rate in the lane is 19.1% which is roughly in line with the national van tender rejection rate and is 370 basis points higher than the rejection rate for all outbound Los Angeles van loads.

What does this mean for you?


Brokers: Loads in this lane may be harder to cover immediately following the Thanksgiving weekend as capacity gradually heads back to the Los Angeles market. Therefore, prioritize covering loads in the lane this week. When bidding on capacity, keep in mind that the current TRAC/Market Dashboard buy rates, including fuel, are a range of $3.40/mile to $3.74/mile, for rates in the 33rd and 67th percentiles, respectively, with an average spot rate of $3.53/mile.


Carriers: Before accepting tendered loads to Atlanta, carriers may want to look for loads to a tighter freight market. The Atlanta van outbound tender rejection rate of 19.36% is 343 basis points below the national van tender rejection rate. SONAR shows that the Atlanta freight market is roughly balanced with inbound and outbound demand; the Atlanta Van Headhaul Index is -4.


Shippers: Prior to Thanksgiving, domestic intermodal volume in the lane reached its highest level since February, which suggests that intermodal shippers with contracts in place are more likely to see satisfactory service levels. Spot shippers should use the highway rather than rail intermodal in light of the elevated intermodal spot rates.


Columbia to Harrisburg – Spot rates for reefer loads jumping out of Columbia


SONAR Tickers: Market Dashboard Columbia to Harrisburg - Reefer


Highlights

  • Spot rates for refrigerated loads have increased 30 cents per mile since last Wednesday in this lane.

  • Columbia’s reefer outbound tender rejection rate increased from 40.37% on November 21 to 72.3% this past weekend.

  • Harrisburg’s reefer outbound tender rejection rate has fallen from 25% on November 20 to 20% this past weekend.

What does this mean for you?


Brokers: Pad margins on loads moving in this lane. Expect tightening conditions for refrigerated loads out of the Columbia market. Make this lane a higher priority for finding coverage.


Carriers: Accept more refrigerated loads into the Columbia market. Capacity has tightened rapidly for reefer equipment in the Carolinas. Harrisburg is easing but rejection rates are still over 20%, meaning capacity is loose only relative to other regions of the U.S.


Shippers: Increase lead times for refrigerated loads in this lane. Check with all your scheduled carriers who have loads scheduled to pick up out of the Carolinas this week to ensure pick-ups are still covered.


Houston to Memphis – Capacity is likely to tighten further in the days ahead as the Headhaul Index surges over 38% week-over-week (w/w).


SONAR Tickers: OTVI.HOU, ICSTM.USHOU, OTRI.HOU, OTRI.HOUMEM


Highlights

  • Houston outbound volumes are down 19% w/w, but are likely to surge in the days ahead as weekly import volumes just smashed the Port of Houston’s all time record.

  • The Headhaul Index in Houston is up 38% w/w, and is likely to move higher in the coming days as outbound volumes are likely to explode in the days and weeks ahead.

  • Houston outbound tender rejections are relatively flat w/w, but are likely to increase rapidly in the coming days due to the increasing imbalance between inbound and outbound volumes.

What does this mean for you?


Brokers: Outbound tender rejections may be relatively flat w/w, but with the Headhaul Index increasing 38% w/w we are likely to see rejections move higher in the coming days. Outbound volumes have declined 19% w/w, but since inbound volumes have decreased at a faster rate, the growing imbalance between inbound and outbound volumes is likely to cause capacity to tighten further in the coming days.


Carriers: Stay firm on your rates, and expect upward pressure to persist on spot rates due to the large increase of 38% w/w in the Headhaul Index. With import volumes having been at, or near, record highs for most of 2021, we should still see a significant amount of outbound volumes to continue moving out of the Houston market through the end of the year.


Shippers: Your shipper cohorts in Houston have been steadily increasing tender lead times over the last few weeks, and currently lead times in Houston are averaging 3.6 days. While this lead time is nearly a record for 2021, it would be wise to push them out even further to between 4 and 4.5 days to help alleviate some of the pressure that is likely to be put on capacity from the massive 38% increase w/w in the Headhaul Index.

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