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  • Jesse Rogers

USA LOGISTICS MARKET ANALYSIS 7/14/2021




Today’s Lanes to Watch:


Wednesday, July 14, 2021


Takeaways for today's lanes: The Chicago to Atlanta lane has become more attractive to carriers of late, given the recent tightening in the Atlanta market. The Indianapolis to Milwaukee lane continues to be a strong lane for dry van carriers, which averaged over $4.00 all-in rpm last week on round trip runs. New Orleans capacity continues wild roller coaster ride.


Chicago to Atlanta – The lane has become more attractive to carriers of late given the recent tightening in the Atlanta market




Highlights


The tender rejection rate in the lane is 24.6% which is well above the 18.5% tender rejection rate for all outbound Chicago loads. Domestic intermodal spot rates ticked up from $3.00/mile, including fuel surcharges, to $3.05/mile, which keeps it above the latest dry van spot rate of $2.97/mile, including fuel surcharges. The Atlanta Headhaul Index is 60.5, which is below its recent high but is well above where it has been for most of the past year


What does this mean for you?


Brokers: Prioritize covering loads in this lane ahead of other outbound Chicago loads, given that tender rejection rates are far higher in this lane than they are for all outbound Chicago loads. When negotiating with carriers, stress that Atlanta has become a more attractive destination for carriers given the recent increase in demand to move outbound Atlanta loads.


Carriers: Accept tendered loads. A load to Atlanta takes you into a freight market with an outbound tender rejection rate of 26.6%, which is 380 basis points above the national average. Plus, the Atlanta Headhaul Index of 60.5 indicates that it should be easy to get reloaded.


Shippers: The highway will be your best bet for spot shippers since intermodal spot rates are not any lower than dry van rates currently. With the inbound Atlanta tender rejection rate of 27.7% above the national average, keep lead times extended past the 2.7-day average for all inbound Atlanta loads.


Indianapolis to Milwaukee – Dry van carriers averaged $4.26 all-in rpm on round trips between Indianapolis and Milwaukee as rejection rates trended down in both markets





Highlights


Dry van rejection rates declined to 22.14% in the Indianapolis market, but the average all-in rpm paid to carriers climbed up to $3.97 for the week ending July 7 on the IND – MKE lane. Dry van carrier all-in average rpm increased to $4.54 on the MKE – IND lane last week as rejection rates dipped to 23.92% in the Milwaukee market. Indianapolis shippers have retracted tender lead times to 2.41 days over the past week, which is just below the national average of 2.57 days as rejection rates dipped in the market.


What does this mean for you?


Brokers: Capacity is extremely tight for shippers who are moving goods between the Indianapolis and Milwaukee markets, which has pushed spot rates up on both lanes. Brokers should search the spot market for dry van freight that moves across both the IND – MKE lane, and the MKE – IND lane. Average paid carrier rates have been climbing on both lanes over the past few weeks, indicating that brokers will need to increase their bids as rate volatility increases on these lanes. Try to keep your carriers moving on your loads by booking round trip loads and keep downward pressure on their rates.


Carriers: Dry van carriers with excess capacity in the Indianapolis market should search the spot market for loads that run across the IND – MKE lane and increase your bids since carrier rates have been trending upward. Both the IND – MKE, and MKE – IND lanes have continued to be strong opportunities for dry van carriers over the past few weeks as the average all-in rpm has climbed in both directions. Carriers averaged a $4.26 all-in rpm last week on round trip loads between the two markets, but carriers can increase that average with spot rates. Shippers: Indianapolis’ headhaul score remains low at -49.13, but capacity has been tightening in the market. Dry van rejection rates trended down but have rebounded to 22.14%.


Shippers: in the Indianapolis market need to extend tender lead times back out near 3.00 days to keep downward pressure on carrier rates proactively, and secure capacity as early as possible. The momentum is shifting back into the carriers favor, which will allow carriers to push spot rates back up in the market if the trends continue.



New Orleans to Chicago – Rejections spike out of the Crescent City




Highlights


New Orleans’ outbound rejection rate jumped from 24% to near 30% over the past few days and has trended towards tightening over the past few months, contrary to the national market. Lane specific rejection rates to Chicago have stabilized around 24% and have become far less volatile over the past few months. Chicago’s outbound rejection rate fell sharply over the past few days and has found a floor around 18.5% over the past month.


What does this mean for you?


Brokers: Expect upward pressure on rates in this lane this week as well as increased activity. Increase priority for coverage out of New Orleans.


Carriers: Accept more loads into the New Orleans market and target new shippers in this area for long-term relationships.


Shippers: in this market are seeing decreasing levels of compliance over the past four months and will be more open to new providers. Shippers: Evaluate your carrier base in this lane by comparing them to the current market conditions. If your compliance rates are below the market, add depth to the route guide and look at potentially increasing your rates. In the near term, push lead times to three days or more.

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