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USA LOGISTICS MARKET ANALYSIS 12/20/21


Today’s lanes to watch: Monday, December 20, 2021


Takeaways for today's lanes:

  • Rejection and spot rates are rising rapidly from Milwaukee to Atlanta.

  • Capacity ratchets tighter out of Memphis as rejection rates climb over 375 basis points (bps) week-over-week (w/w).

  • Capacity from Pittsburgh to Dallas is likely to tighten and cause spot rates to rise in the days ahead.

Milwaukee to Atlanta – Milwaukee rejection rates bounce off their annual low.


SONAR Tickers: OTRI.MKE, OTRI.MKEATL, OTRI.ATL


Highlights:

  • Milwaukee’s outbound tender rejection rate has risen to over 20% over the past week after hitting an annual low of around 15% early in the month.

  • Rejection rates to Atlanta have moved similarly and continue to be well above the national and market average. FreightWaves TRAC spot rates for van loads increased from $4.09 to $4.15 per mile over the weekend.

  • Atlanta’s outbound rejection rate has been surprisingly stable over the past week as the Christmas holiday approaches, hovering around 16%.

What does this mean for you?


Brokers: Pad margins in this lane and make outbound Milwaukee loads a higher priority to start your week. Take any rates below $4 per mile.


Carriers: Do not expect as much upward pressure on spot rates out of Atlanta. Atlanta’s outbound rejection rates are below the national average and are very stable. Divert more capacity to the spot market in this lane.


Shippers: Expect lower compliance in this lane this week, especially if contract rates are well below $4 per mile. Read the broker advice if shopping the spot market for good rates.


Memphis, TN to Columbus, OH – Capacity ratchets tighter in Memphis as rejection rates rise.


SONAR Tickers: Market Dashboard for van rates from Memphis, TN to Columbus, OH


Highlights:

  • Rejection rates have increased by over 370 bps during the past week in both Memphis and Columbus.

  • The Headhaul Index (HAUL) in Memphis has increased by 4% w/w, signaling that capacity is likely to continue tightening during the next week.

  • FreightWaves TRAC rates are off the highs established over the past six months, but have hovered around $3.63/mi for the past month.

What does this mean for you?


Brokers: Focus on getting loads outbound from the Memphis market earlier in the week before spot market activity increases around the Christmas holiday.


Carriers: Take advantage of higher rates leaving the Memphis market, because in the Columbus market changing load balance is likely to lead to diminished spot market activity, thus lower rates out of Columbus.


Shippers: Expect disruptions to carrier networks as rejection rates in Memphis have continued to climb higher over the past week. Focus on fair pricing to secure the necessary capacity during the holiday week. Also, extend lead times if possible to give ample time to secure capacity.


Pittsburgh to Dallas– Capacity is likely to tighten and put significant upward pressure on spot rates.


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


Highlights:

  • Pittsburgh outbound tender volumes are up 10% w/w, signaling that demand for capacity is increasing.

  • The Headhaul Index in Pittsburgh is up 24% w/w, signaling that capacity is likely to tighten.

  • Pittsburgh outbound tender rejections are already up 494 bps w/w, but are likely to move higher due to tightening conditions.

What does this mean for you?


Brokers: You are likely to see capacity tighten in the days ahead. Already, outbound tender rejections are up 494 bps w/w. The increase of 24% w/w in the Headhaul Index has been driven primarily by a decrease in inbound volumes, which is signaling that this growing imbalance in volumes could cause a significant tightening of capacity. With these conditions, expect upward pressure on spot rates.


Carriers: This Pittsburgh market’s pricing power is shifting back into your favor as outbound tender rejections indicate significant tightening in capacity in the days ahead. With shippers and brokers likely already feeling the pressure, try to stay firm on your rates and capitalize on your spot market opportunities as outbound volumes rise.


Shippers: Your shipper cohorts in Pittsburgh are averaging 2.8 days in tender lead times, but if the Headhaul Index continues to increase, you will need to extend your tender lead times to between 3.5 and 4 days to ensure that you are able to source capacity effectively during these tightening conditions.

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