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USA LOGISTICS MARKET ANALYSIS 12/22/2021


Today’s lanes to watch: Wednesday, December 22, 2021


Takeaways for today's lanes:

  • Van rejection rates from Denver to Chicago spiked from 21% to 27% in a day.

  • Rejection rates in Memphis rise to 27%, but conditions in Columbus make it a favorable destination for carriers.

  • Capacity from Louisville to Kansas City is likely to tighten as outbound volumes, outbound rejections, and the Headhaul Index rise week-over-week (w/w).

Denver to Chicago – Plan for service disruptions out of Denver

SONAR Tickers: VOTRI.DEN, VOTRI.DENCHI, VOTRI.CHI


Highlights:

  • Denver’s van outbound tender rejection rates have increased from 25.4% to 31.26% over the past week, increasing much faster than the U.S. average.

  • Rejection rates to Chicago are surprisingly following suit, jumping from 21% to 27% in a single day to their highest value since August. FreightWaves TRAC spot rates are at their highest levels of the quarter, hovering around $2.27 per mile – up from $1.74 just under a month ago.

  • Chicago’s outbound rejection rate for van loads has started to fall prior to the holiday, dipping from 18.5% to 17.6% over the past four days.


What does this mean for you?


Brokers: Consider all Denver capacity at risk at this point, even into favorable markets. Increase the priority of finding coverage out of Denver to one of the highest in the nation for larger markets. Do not offer rates below $2.20 per mile without confirmation.


Carriers: Expect tightening conditions in this lane with upward pressure on spot rates this week. Rates are still relatively low because Denver is largely a backhaul market with oversupply conditions, but moves are becoming much more profitable.


Shippers: Expect lower compliance in this lane this week with the potential for rapid changes. Denver is normally a well-supplied market, but conditions are changing. Increase lead times and plan for service disruptions.


Memphis to Columbus – Rejection rates in Memphis rise faster than the national average.

SONAR Market Dashboard: FreightWaves TRAC spot rates from Memphis to Columbus


Highlights:

  • Rejection rates in Memphis have increased by 422 basis points (bps) over the past week, jumping to 27%, which is well above the national average.

  • The Headhaul Index (HAUL) in Columbus has fallen slightly, down just 0.61% w/w.

  • The FreightWaves TRAC spot rate currently sits at $3.62/mi, but with capacity tightening in both markets, there is upward pressure on spot rates.

What does this mean for you?


Brokers: Even though Columbus is a relatively attractive market, capacity is still going to be difficult to source throughout the week. Focus on securing capacity in the Memphis market early, given how tight the market is.


Carriers: Expected increased spot market activity, placing upward pressure on rates out of the Memphis market. The Columbus market currently has favorable carrier conditions, so be willing to move freight into the market.


Shippers: Expect disruptions to carrier networks moving forward as drivers come off the road for the holidays. There will likely be increased spot market activity, leading to higher rates. In order to secure capacity, be willing to pay rates above $3.62/mi.


Louisville to Kansas City – Capacity is likely to tighten as outbound volumes rise alongside the Headhaul Index w/w

SONAR Market Dashboard: FreightWaves TRAC Spot Rates from Louisville to Kansas City


Highlights:

  • Louisville outbound tender volumes are up 11% w/w, signaling that demand for outbound capacity is increasing.

  • The Headhaul Index in Louisville is up 20% w/w, signaling that the imbalance between inbound and outbound volumes is growing.

  • Louisville outbound tender rejections are up 6.4% w/w, but that trend is likely to push higher as demand for capacity increases.

What does this mean for you?


Brokers: Even though outbound tender rejections are already up 6.4% w/w, it is likely that they will continue to increase judging by the 20% jump w/w in the Headhaul Index. This is especially likely since outbound tender volumes are also up 11% w/w. Be prepared to pay a premium on this lane for the remainder of the week.


Carriers: You are likely able to achieve some of your highest rates this year with outbound tender rejections increasing w/w and likely to only increase through the end of the week. Keep an eye on outbound tender rejections to confirm tightening conditions are indeed driving upward pressure on rates.


Shippers: Your shipper cohorts in Louisville are averaging just over 3 days in tender lead times. The Headhaul Index in Louisville is up 20% 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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