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USA LOGISTICS MARKET ANALYSIS 11/8/2021


Today’s lanes to watch: Monday, November 8, 2021


Takeaways for today's lanes:

  • Reefer rejection rates climb on the Indianapolis to Atlanta lane as market conditions deteriorate in Atlanta.

  • Savannah to Allentown capacity is likely to tighten as outbound volumes increase 13% week-over-week (w/w).

  • Watch out for intermittent capacity disruption out of Kansas City to start your week.

Indianapolis to Atlanta – Reefer rejection rates have climbed to 60.50% on the IND – ATL lane as rejection rates fall to 31.49% in Atlanta.



SONAR Tickers: ROTRI.INDATL, ROTRI.IND/RHAUL.ATL, ROTRI.ATL


Highlights:

  • Reefer rejection rates have climbed to 60.50% on the IND – ATL lane, which is above the Indianapolis market average of 57.61%.

  • Atlanta’s Headhaul score has declined to -30.65 as reefer capacity loosens, pushing rejection rates down to 31.49%.

  • Atlanta shippers have increased reefer tender lead times to 3.95, which is well below the national average of 4.29 days.

What does this mean for you?


Brokers: Shippers are struggling with reefer capacity on the IND – ATL lane as market conditions deteriorate in Atlanta. Reefer rejection rates have increased to 60.50% as spot rates for on-demand capacity climb. Brokers should search the spot market for loads that run across the IND – ATL lane, increasing their bids to create high margin loads. This lane will be difficult to cover, and carriers will be pushing up their spot rates for on-demand capacity.


Carriers: Reefer carriers with excess capacity in the Indianapolis market should search the spot market for loads that deliver into Atlanta. Rejection rates have climbed above 60% on the IND – ATL lane since market conditions have softened in the Atlanta market, but with proper planning, carriers should be able to book a healthy load back into a Headhaul market without any layovers in the Atlanta market. Given these conditions, carriers should significantly increase their rates on the IND – ATL lane.


Shippers: Atlanta shippers need to keep increasing reefer tender lead times as conditions soften in the Atlanta market. Capacity has loosened, but reefer rejection rates are still elevated at 31.49%. Secure capacity as early as possible, and keep your loads off the spot market. If carrier competition for loads continues to heat up in the underbooked market, spot rates will keep trending downward.


Savannah to Allentown – Maritime import volumes reach a new all-time high, and are likely to move higher in the days ahead.


SONAR Tickers: OTVI.SAV, OTRI.SAV, OTRI.SAVABE, WICSTM.USSAV


Highlights:

  • Savannah maritime import shipment volumes hit a new all-time high in daily volumes in the last couple of days, and are likely to break this record again in the days ahead.

  • The Savannah Headhaul Index is up 13% w/w, but is very likely to climb further in the weeks ahead as import volumes convert to the truckload market.

  • Outbound tender volumes in Savannah are up 13% w/w, but with record weekly volumes being reported, they are set for large gains in the weeks ahead.

What does this mean for you?


Brokers: The Port of Savannah just shattered its record for daily maritime import volumes (moving 7-day average). This is a record that is not likely to last for long as the strong upward trend in volumes is likely to lead to multiple new records within the next couple of weeks. The huge volumes are largely from peak season volumes (shipped in the latter half of September) finally offloading after being caught in the record traffic jam of vessels at anchor. The huge volumes will likely shift quicker than expected into the truckload market as many of these volumes are now extremely time-sensitive and need to be delivered as soon as possible.


Carriers: Stay firm on your rates, as we are likely to see outbound volumes reach close to (and possibly exceed) their yearly highs for 2021. It is normal for outbound volumes to be headed toward a peak during this time of year, but 2021 will be exceptional because of the record maritime import volumes now arriving on shore. Keep an eye on outbound tender rejections and be sure to adjust your rates alongside any significant increases in the days ahead.


Shippers: Your shipper cohorts currently have tender lead times at 2.4 days, signaling that many shippers are not anticipating the likely tightening of capacity in the days ahead. Outbound volumes may have been slow to increase as expected due to the massive import volumes that have arrived through the Port of Savannah, but it is only a matter of time before these volumes finally get transitioned into the domestic truckload and intermodal markets. In preparation of a surge in demand prior to “Black Friday,” it would be wise to go ahead and push out your lead times to between 3 and 3.5 days.


Kansas City to Columbus – Kansas City rejections jump as volumes contract.

SONAR Tickers: OTRI.MCI, OTRI.MCICMH, OTRI.CMH, OTVI.MCI, OTVI.CMH


Highlights:

  • Kansas City’s outbound rejection rate has increased from 23.3% to 27.8% over the past week as outbound demand has dipped.

  • Lane rejection rates to Columbus have moved similarly and remain above the market average.

  • Columbus’ outbound rejection rate has fallen to its lowest point since early August, though demand has remained consistent.

What does this mean for you?


Brokers: Watch out for a change of direction in spot rates in this lane this week. The long-run trend for easing remains in place, but there may be a short-lived change of direction or at least a cessation in decline. Check on all outbound Kansas City loads to start the week.


Carriers: Do not expect as much spot market volume out of Columbus as there has been over the past month. Contracted demand remains strong, but many more loads are being accepted. In other words, plan for less transactional reload freight at the destination in this lane.


Shippers: Send a quick message to your carriers to ensure they are still on schedule for pickups in this lane. No major disruption is expected, but some intermittent disruptions may occur prior to the bulk of the holiday impact on capacity.

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