Search

USA LOGISTICS MARKET ANALYSIS 9/8/2021

Today’s Lanes to Watch: Tuesday, September 7, 2021


Takeaways for today's lanes:


Reefer rejection rates climb above 45% in the Milwaukee market, allowing carriers to increase their rates on the Milwaukee to Atlanta lane.


Indianapolis to Dallas rejections are likely to increase as the Headhaul Index increases 40% week-over-week (w/w).


The tightening Dallas market makes loads moving to Indianapolis even more difficult to cover.


Milwaukee to Atlanta – Reefer carriers averaged $4.34 all-in rpm on the MKE – ATL lane last week as reefer rejection rates climbed above 45%.



Highlights


Reefer carriers averaged $4.34 all-in rpm on the MKE – ATL lane last week, and reefer rejection rates remain elevated at 47.11% in the Milwaukee market.


Reefer freight volumes have increased to 90.58 index points in the Atlanta market. Reefer rejection rates declined last week, but remain elevated at 41.15%.


Atlanta shippers have retracted reefer tender lead times to 3.81 days as reefer rejection rates declined, but the increase in freight volumes could push rejection rates back up.


What does this mean for you?


Brokers:


Reefer capacity is extremely tight in the Milwaukee market, which has pushed rejection rates up to 47.11% as carriers reject their contracted freight for higher paying loads on the spot market. Brokers should search the spot market for loads that run across the MKE – ATL lane, helping shippers secure capacity for their loads. Increase your bids since rejection rates are so high, and rates for on-demand capacity remain volatile. Carriers: Reefer carriers with trucks inbound into the Milwaukee market should search the spot market for loads that run across the MKE – ATL lane for their next load.


Carriers averaged $4.34 all-in rpm last week on the lane, but spot markets rates should average a little higher. The Atlanta market shows it is under booked, but reefer rejection rates are still elevated at 41.15%, indicating spot rates are well above contracted rates in the market. Carriers will still have rate negotiation strength over shippers in the Atlanta market.


Shippers: Atlanta shippers need to extend reefer tender lead times since freight volumes are trending upward, and rejection rates remain elevated. Market conditions might have eased over the past week, but the market remains sensitive, and any disruptions could force spot rates back up to historic levels. Monitor rejection rates and the Headhaul Index for shifts in the market, and be more proactive on decisions to extend or retract tender lead times.


Indianapolis to Dallas – Rejections are likely to increase as the Headhaul Index increases 40% w/w.



Highlights Indianapolis outbound tender volumes are up 1% w/w, signaling that demand for outbound capacity is increasing.


The Indianapolis Headhaul Index is up 40% w/w, signaling capacity could potentially tighten further from the growing imbalance between outbound and inbound volumes.


Indianapolis outbound tender rejections are down 46 basis points (bps) w/w, but that is likely to change as a result of the large w/w increase in the Headhaul Index.


What does this mean for you?


Brokers:


Take notice of the 40% increase in the Headhaul Index w/w. If outbound volumes continue to increase, and inbound volumes decline or remain relatively flat, then the growing imbalance could cause rejections to rise even further in the days ahead. Let your team know that capacity is likely going to be tighter in the coming days, and that there will likely be significant upward pressure on rates if the Headhaul Index continues to climb.


Carriers: Stay firm on your rates in Indianapolis as the increase of over 40% in the Headhaul Index w/w is likely to shift pricing power further in your favor. Continue to watch outbound tender rejections, and if they continue to rise, adjust your pricing higher to reflect the tightening of capacity.


Shippers: Your shipper cohorts in Indianapolis are still averaging 2.9 days in tender lead times, but if outbound volumes continue to rise, you will likely need to push them out between 3 and 3.5 days. It would be recommended to keep your lead times that high for the remainder of peak season.


Dallas to Indianapolis – Indianapolis remains one of the most avoided destinations.



Highlights


Dallas’ outbound rejection rate has risen to its highest point since July 4, but appears to have stalled just above 25% as demand remains elevated.


Rejection rates to Indianapolis remain among the highest out of the area and have risen over 29% once again. Indianapolis is one of the most rejected destination markets in the U.S.


Indianapolis’ outbound rejection rate has been steadily climbing since bottoming in mid-July. Demand is on the rise as carriers continue to avoid this market.


What does this mean for you?


Brokers: Make this lane one of the highest priorities this week as it is being rejected nearly as much as inbound New Orleans loads. Rates will remain elevated as demand and hurricane relief will keep pressure on this market. Indianapolis continues to be a tough sell, but capacity is tightening due to carrier avoidance.


Carriers: Do not accept freight in this lane unless it produces a high margin. Indianapolis is tightening, but other carriers are avoiding this market consistently. Indianapolis is dominated by short-haul and tweener freight, which is probably why carriers do not want to head into this market.


Shippers: Expect to pay a premium in this lane for any loads moving on the spot market this week. Make sure you focus a lot of energy on developing a deep route guide and strong relationships in this lane. Consider rate increases if your compliance is lower than market.

11 views0 comments

Recent Posts

See All