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USA LOGISTICS MARKET ANALYSIS 2/25/2022


Today’s lanes to watch: Friday, February 25, 2022


Takeaways for today's lanes:

  • From Dallas to LA, rising empty domestic container counts and falling tender rejection rates highlight excess capacity across both intermodal and dry van.

  • Dallas to Cincinnati shows little impact from the capacity crunch and remains a good lane to trek the Midwest.

  • Volumes to major East Asian ports are on the rise, but capacity is still relatively loose.

Dallas to LA – Rising empty containers counts and falling tender rejection rates highlight excess capacity in this backhaul lane across both intermodal and dry van.

SONAR Tickers: ORAILDOML.DALLAX, ORAILDOME.LAXDAL,VOTRI.DALLAX


Highlights:

  • The relevant dry van tender rejection rates when evaluating the lane (DALLAX, outbound Dallas and inbound LA are 11.2%, 15% and 8.3%, respectively) are all well below the national dry van tender rejection rate of 18.3%.

  • The door-to-door intermodal spot rate to move 53’ containers is $1.45/mile, including fuel. That is 8.2% below the average dry van truckload spot rate in SONAR’s Market Dashboard tool.

  • The LA dry van outbound tender rejection rate is 7% and the LA Van Headhaul Index is 123 which, while high, is towards the low end of its range over the past year.

What does this mean for you?


Brokers: Covering loads in this lane will be easier than it will be in most others so it doesn’t need to be your top priority. You also may want to raise your rates in the lane since Market Dashboard is showing that the rates that other brokers are paying for on-demand dry van capacity have risen $0.16/mile in the past month.


Carriers: Heading to LA is a mixed bag. Clearly, the LA market is not as tight as most freight markets so carriers will have relatively few opportunities to get reloaded with highly rated spot loads. However, LA remains one of the biggest headhaul markets, so it should still be easy to get reloaded quickly.


Shippers: There is plenty of excess intermodal capacity in the lane, which is shown most clearly in SONAR with the 101 empty domestic containers that moved each day in the lane, on average, in the past week. But, dry van capacity is also not as tight as most lanes, so shippers may still want to use the highway since it should be easy to get loads covered at a reasonable rate.


Dallas to Cincinnati – No change in capacity combined with consistent spot rates makes this a good lane to run.

SONAR TRAC Market Dashboard – Dallas to Cincinnati


Highlights:

  • Dallas has a Headhaul index of 138.83, indicating there is an

overwhelmingly greater number of outbound loads in relation to inbound loads

  • The FreightWaves TRAC spot rate is $2.67, and it has held at that rate for the past few weeks. This is the lowest rate over the past month.

  • Cincinnati’s outbound tender volumes and its outbound tender rejections have leveled off. The rates have become nothing if not consistent.

What does this mean for you?


Brokers: This lane has settled into an extremely consistent rate. Over the last two weeks the rate hasn’t changed more than $0.10 in either direction. Continue to price this lane as is, but be wary of a sudden change in outbound tender rejections that signals a change in rates.


Carriers: Load balance is tight in this lane. Consistency is key and the rates reflect that. Dallas has a heavy skew to outbound loads. Use that as a way to get trucks into markets with tighter capacity and target those more lucrative moves.


Shippers: Outbound tender lead times are averaging about 2.5 days in both markets. This lane has been rock-steady on rates, so now is a good time to look at service metrics. Get new carriers in to replace failing ones or review performance scorecards with existing carriers as rates aren’t likely to change in the near-term.


All import lanes into the Port of Charleston, SC — Volumes to major East Asian ports are on the rise, but capacity is still relatively loose.

SONAR Tickers: OOTI.USLAX, FBXD.NAWC


Highlights:

  • Inbound twenty-foot equivalent unit (TEU) volumes from all ports of lading to the Port of Charleston (as the Port of Discharge) are at their highest levels since May 2021.

  • TEU volumes have been declining between 8-9% on ocean carriers headed to the Port of Charleston, which are some of the highest levels for the past two years.

  • Weekly import shipments reported by U.S. Customs reached a new all-time record for shipment volume handled in one week’s time via the Port of Charleston.

What does this mean for you?


Brokers: If you are looking to move ocean containers with the Port of Charleston as the Port of Discharge, be aware of the potential delays that could arise. With container volumes still booming from most major origins for U.S. imports via the Port of Charleston, you can expect that capacity is likely to remain relatively tight on these lanes. However, volumes are forecasted to ease in the coming week, so capacity should begin to loosen as volumes recede.


Carriers: Pricing power on these lanes has shifted further in your favor over the last couple of months as many importers have chosen to try and bypass port congestion through the ports of Los Angeles, Long Beach and Savannah by rerouting cargo through Charleston. These volumes are expected to remain strong for another week, but will likely begin to normalize soon thereafter


Shippers: If you have been attempting to reroute your cargo through the Port of Charleston to bypass congestion at other U.S. ports, then you are not alone. Unfortunately, however, this shift in volumes has caused congestion at the Port of Charleston to reach record levels. If you have the opportunity to shift your cargo back over to the Port of Savannah, that would be recommended as congestion is beginning to ease quicker than what is forecasted for the Port of Charleston.

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