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USA LOGISTICS MARKET ANALYSIS 2/10/2022


Today’s lanes to watch: Thursday, February 10, 2022


Takeaways for today's lanes:

  • Spot rates reach new heights in Philadelphia.

  • Boston to Philadelphia spot rates have increased 30 cents per mile in February.

  • Spot rates from Dallas to Chicago are poised to hit a new record for 2022 as the Headhaul Index surges 22% w/w.

Philadelphia to Indianapolis – Loosening capacity in Philadelphia should put downward pressure on spot rates but record high rates continue upward.

FreightWaves TRAC Market Dashboard – Philadelphia to Indianapolis


Highlights:

  • The FreightWaves TRAC spot rate for this lane is the highest it has been for the last six months by almost $1 at $3.30 per mile.

  • In the last few days the Philadelphia's load balance went from favoring outbound loads to near-equilibrium for outbound and inbound loads.

  • Indianapolis rejection rates are at 20% and still falling from last week's 35%. Capacity is starting to loosen in this market.


What does this mean for you?


Brokers: The average rate is $3.30, a record high for this lane. Any historic data you might have might not be reliable for this lane. Keep an eye out for a jump in rates. Rates on this lane will continue to increase for the foreseeable future, despite some capacity loosening.


Carriers: Spot market freight will continue to be lucrative and your best option for this lane. With rates hitting record highs, hold firm on your rates but be prepared for a slight dip in rates that could come soon.


Shippers: Costs for this lane will be higher than budgeted; watch rates as they continue to climb. Tender lead time in Philadelphia is at 3.14 days and rising, which means get loads booked as soon as you can. Try for a minimum of 3.5 days to ensure you aren't getting heavily inflated rates.


Boston to Philadelphia – Boston capacity continues to tighten out of season.

FreightWaves TRAC Market Dashboard – Boston to Philadelphia


Highlights:

  • Boston’s outbound rejection rate has increased from 13.86% on February 1 to 20.3%, giving it one of the strongest directional tightening signals in the U.S.

  • Average FreightWaves TRAC spot rates from Boston to Philadelphia have increased 30 cents per mile since the end of January, and are now near $5 per mile.

  • Philadelphia’s outbound rejection rate has dropped from 21.8% on January 28 to 18.69%.


What does this mean for you?


Brokers: Make Boston loads a higher priority. Rates continue to increase, even in the normally easier to cover Boston to Philadelphia lane. Continue to pad margins as upward pressure on rates continues.


Carriers: Target customer acquisition in this lane. If you have a long-range need to move southbound freight out of Boston, now is the time because shippers are having an unusually difficult time securing capacity. If nothing else, divert capacity to the spot market to take advantage of the record rates.


Shippers: Long-term rate increases in this lane are not likely to have a major impact on compliance. Carriers are simply avoiding this market because they have better options in other parts of the country with more favorable operating conditions. Target regional carriers in this lane to improve compliance.


Dallas to Chicago – Rejections are likely to increase further because the Headhaul Index is up 22% w/w.

FreightWaves TRAC Spot Rates from Dallas to Chicago


Highlights:

  • Dallas outbound tender volumes are up 4% w/w, signaling that demand for capacity is increasing slightly w/w.

  • The Headhaul Index in Dallas is up 22% w/w, signaling that capacity is likely to tighten further in the coming days as outbound demand outpaces inbound volumes.

  • Dallas outbound tender rejections are down 69 bps w/w, but are likely to climb higher in the near-term due to the growing volume imbalance in Dallas

What does this mean for you?


Brokers: The w/w change of 22% in the Headhaul Index is a large shift in the Dallas market, and it is being driven primarily by a 9% increase in outbound volumes. Outbound tender rejections may be down 69 bps w/w, but the Headhaul Index increase is signaling that capacity in Dallas is likely to tighten further in the days ahead. Expect significant upward pressure on spot rates this week and for capacity to be especially tight.


Carriers: Dallas pricing power is likely to shift even further in your favor in the coming days due to a growing imbalance between inbound and outbound volumes. Keep an eye on outbound tender rejections, and if they reverse their current trend and shift higher, then you are likely to see significant upward pressure on spot rates.


Shippers: Your shipper cohorts in Dallas are still averaging 2.8 days in tender lead times, but history would show that when capacity tightens quickly in Dallas, lead times should be between 3.5 and 4 days to help relieve some of the pressure being put on both capacity and spot rates.

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