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USA LOGISTICS MARKET ANALYSIS 12/15/2021


Today’s lanes to watch: Wednesday, December 15, 2021


Takeaways for today's lanes:

  • Spot rates have risen over $1 per mile from Chicago to Charlotte over the past month.

  • Volume imbalance in Houston is likely to lead to loosening conditions in the coming days as the Headhaul Index is down 14.5% week-over-week (w/w).

  • Memphis to Kansas City capacity is likely to tighten in the days ahead and drive spot rates past their highs for the last month.

Chicago to Charlotte – Chicago to Charlotte rejection rates are nearing 21%..

SONAR Tickers: Market Dashboard for van rates from Chicago to Charlotte


Highlights:

  • According to FreightWaves TRAC, spot rates have increased roughly $0.05 per mile to $4.12 in this lane over the past four days, and have increased over $1.00 per mile over the past month.

  • Rejection rates are back on the rise out of Chicago and lane-specific rejection rates to Chicago are also moving higher above the market average – both are now over 20%.

  • Charlotte continues to be a well-supplied market with a -84 Headhaul Index value and an outbound rejection rate of 17%, which is below the national average.

What does this mean for you?


Brokers: Pad margins and make it a high priority lane for finding coverage out of Chicago. Expect upward rate pressure to continue through next week.


Carriers: Cover this lane on the spot market as rates have risen dramatically over the past month. Charlotte’s outbound rejection rate is at its lowest point since June 2020, indicating it is stabilizing with less reload potential.


Shippers: Expect lower compliance in this lane and significant premiums on loads that fall to the spot market. Charlotte is a dead-end for carriers unless they are willing to drive empty because of low production and high consumption out of this area.


Houston to Memphis – Opportunities will be plentiful in both Houston and Memphis in the coming week.


SONAR Tickers: Market Dashboard for van rates from Houston, TX to Memphis, TN


Highlights:

  • Capacity along the lane is tightening faster than any of the other lanes out of Houston as rejection rates have increased 574 basis points (bps) over the past week.

  • Volumes out of Memphis have increased by nearly 7% over the past week, but the neighboring market, Little Rock, has also experienced a volume increase of nearly 13%.

  • The Headhaul Index in Houston has fallen by 14% w/w, signaling that capacity will likely loosen in coming days, putting downward pressure on spot rates.

What does this mean for you?


Brokers: With capacity likely to loosen in coming days in the Houston market, there may be an opportunity to pad margins if loads can be pushed back. FreightWaves TRAC spot rates have already fallen $0.07 per mile since last Thursday, so be diligent when pricing freight out of the Houston market this week.


Carriers: Capacity is likely to tighten in Memphis in the coming days as the Headhaul Index is up 13% w/w, presenting carriers more spot market activity. Getting out of the Houston market sooner rather than later will likely present better opportunities in the back half of the week.


Shippers: Your fellow shippers have already extended lead times to nearly 3.5 days to offset the capacity tightness in the market over the past week. Extending lead times even more may present more cost-saving opportunities as capacity in the market returns, offsetting the freight imbalances.


Memphis to Kansas City– Capacity is likely to tighten as the Headhaul Index increases 13% w/w.

SONAR Market Dashboard Trac Spot Rates from Memphis to Kansas City


Highlights:

  • Memphis outbound tender volumes are up 6% w/w, signaling that demand for outbound capacity is increasing.

  • The Headhaul Index in Memphis is up 13% w/w, signaling that the imbalance between inbound and outbound volumes is growing.

  • Memphis outbound tender rejections are down 2.2% w/w, but that trend is likely to reverse as demand for capacity increases.

What does this mean for you?


Brokers: Even though outbound tender rejections are down 2.2% w/w, it is likely that outbound tender rejections will continue to rise because the Headhaul Index increased 13% w/w. With outbound tender volumes up 6% w/w, outbound tender rejections are very likely to move higher in the coming days.


Carriers: Stay firm on your rates as outbound tender rejections are likely to increase in the coming days, and that is likely to shift pricing power into your favor. Keep an eye on outbound tender rejections and use this index to confirm tightening conditions are indeed driving rates upward.


Shippers: Your shipper cohorts in Memphis are still averaging 2.7 days in tender lead times. The Headhaul Index in Memphis is up 13% w/w, and outbound tender rejections are likely to continue increasing in the coming days. It would be wise to keep your tender lead times between 3 and 4 days through the next couple of weeks to ensure you are able to secure capacity in the market.

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