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USA LOGISTICS MARKET ANALYSIS 12/17/21


Today’s lanes to watch: Friday, December 17, 2021


Takeaways for today's lanes:

  • Spot rates from Nashville to Indianapolis have dropped over $0.40 per mile since October.

  • Load imbalances in both Dallas and Detroit signal capacity could loosen, driving spot rates off recent highs.

  • Harrisburg to Dallas – Rejections are likely to rise as the Headhaul Index increases 7% w/w.

Nashville to Indianapolis – Nashville rejection rates are falling back after spiking last week.


SONAR Tickers: Market Dashboard for van rates from Nashville to Indianapolis


Highlights:

  • Spot rates from Nashville to Indianapolis have been extremely volatile over the past three weeks, dropping over $0.30 per mile since Thanksgiving before slowly recovering.

  • Nashville’s outbound rejection rate has fallen from 33.9% to 27.5% over the past week.

  • Indianapolis’ outbound rejection rate has been bouncing between 23% and 24% over the past week and a half, indicating little change in capacity conditions.

What does this mean for you?


Brokers: Expect less difficulty securing capacity in this lane compared to last week as well as less volume on the spot market. Rates are extremely erratic, but getting a rate below $3.90 per mile is considered a win.


Carriers: Expect lower transactional volume in this lane and capacity conditions consistent from a week-over-week (w/w) perspective out of Indianapolis. Offering rates over $4 per mile will have less success this week compared to last week.


Shippers: Expect better compliance in this lane this week compared to last week. Rates will still be elevated on the spot market from a year-over-year perspective, but they have declined since the peak values in October.


Dallas, TX to Detroit – Market signals capacity to loosen, but the holidays are starting to impact the lane.


SONAR Tickers: Market Dashboard for van rates from Dallas, TX to Detroit, MI


Highlights:

  • FreightWaves TRAC rates have increased by $0.09 per mile to $2.57/mi, the highest rate in the past six months.

  • Rejection rates in both markets have increased, up 209 basis points (bps) w/w in Detroit and 55 bps in Dallas.

  • Changes in the Headhaul Index (HAUL) in both markets indicate that capacity is likely to loosen in the coming days.

What does this mean for you?


Brokers: When pricing freight from Dallas to Detroit, pay attention to the market conditions. The holidays are going to impact capacity across the country, but with the load imbalance in both markets there may be opportunities to drive rates down and pad margins.


Carriers: The holidays keep capacity tight even when conditions appear to be changing. Keeping upward pressure on rates could be beneficial heading into the final two weeks of the year.


Shippers: As drivers come off the road, there is a need to tender loads further in advance. Current lead times are just above 3 days; pushing those out 3.5 to 4 days should make securing capacity around the holidays easier.


Harrisburg to Dallas – Rejections are likely to rise as the Headhaul Index increases 7% w/w

SONAR Market Dashboard: FreightWaves TRAC Spot Rates from Harrisburg to Dallas


Highlights:

  • Harrisburg outbound tender volumes are relatively flat w/w, signaling that demand for capacity is increasing.

  • The Headhaul Index in Harrisburg is up 7% w/w, signaling that capacity is likely to tighten.

  • Harrisburg outbound tender rejections are already up 196 bps w/w, but are likely to move higher because of the imbalance between inbound and outbound volumes.


What does this mean for you?


Brokers: You are likely to see capacity tighten in the days ahead even though outbound tender rejections are relatively flat w/w. The increase of 7% w/w in the Headhaul Index has been driven primarily by a decrease in inbound volumes, which signals that this growing imbalance in volumes could cause a significant tightening of capacity. For these reasons, expect spot market rates to be experiencing substantial upward pressure in the days ahead, so price your spot freight accordingly.


Carriers: This Harrisburg market’s pricing power is shifting back into your favor as outbound volumes are trending toward what could be a record high for 2021. Most brokers and shippers are likely already feeling capacity tighten, so try to stay firm on your rates and capitalize on your spot market opportunities as outbound volumes rise.


Shippers: Your shipper cohorts in Harrisburg are averaging 3.2 days in tender lead times, but if the Headhaul Index continues to increase, you should set your tender lead times between 3.5 and 4 days to ensure that you are able to source capacity effectively during these tightening conditions.

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