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SONAR sightings for March 24: Elizabeth to Chicago, shipper update, more

The highlights from Thursday’s SONAR reports are below. For more information on SONAR — the fastest freight-forecasting platform in the industry — or to request a demo, click here. Also, be sure to check out the latest SONAR update, TRAC — the freshest spot rate data in the industry.

Lane to watch: Savannah to Atlanta, Georgia

Overview: Savannah’s capacity is becoming increasingly unstable.

Highlights:

  • Spot rates have increased 14 cents per mile in this lane since March 10, moving to an average of 3.93/mile, assuming a trip of around 250 miles. 
  • Savannah’s outbound tender rejection rate has become increasingly volatile since the start of the month, moving between 10% and 15%. 
  • Atlanta’s outbound rejection rate has been trending slightly lower since January, but has hovered around 13% in March. 

What does this mean for you?

Brokers:  Pad margins in this lane when you are uncertain. Expect an unstable outbound capacity environment in Savannah. You should double-check all loads with more than three-day lead times.  

Carriers: Expect slightly better reload potential on the spot market in this lane this week, but very inconsistent conditions may persist throughout the month in Savannah. Atlanta is a relatively consistent market at this point with no significant changes. 

Shippers: Stay on top of this lane, keeping lead times around three days when possible. Expect to pay between $950 and $1,100 per load for this lane on the spot market. 


Watch: Carrier update


Lane to watch: Elizabeth, New Jersey, to Chicago

Overview: Despite a recent increase in intermodal volume, excess domestic intermodal capacity remains, and also remains an option for spot shippers. 

Highlights:

  • The door-to-door intermodal spot rate increased 8% in the past week to a still-reasonable $1.89/mile, including fuel surcharges. 
  • Loaded domestic intermodal volume increased from an average of 215 units/day in mid-March to 261 units/day in the past week.  
  • The dry van tender rejection rate in the lane of 12.4% has declined faster than the comparable tender rejection rate for the market as a whole, which sits at 15.6%. 

What does this mean for you?          
                     
Brokers: 
Lower your bids in this lane in an effort to maintain margins. In the past month, both dry van tender rejection rates and spot rates in the lane have fallen steadily. The dry van spot rate has fallen 8.5% in the past month to $2.88/mile.  
                                 
Carriers: Carriers will likely want to accept tendered loads in the lane given that Chicago is an attractive destination. The Chicago van outbound tender rejection rate is 70 basis points (bps) above the national van tender rejection rate and Chicago remains a headhaul market with a Van Headhaul Index of 30. 
                                            
Shippers: 
Despite the recent increase in intermodal spot rates, they remain well below the current average dry van spot rate of $2.88/mile, as shown in the SONAR Market Dashboard tool. The recent increase in domestic intermodal volume suggests that shippers are finding value in rail intermodal, relative to the two-day trip on the highway.


Watch: Shipper update


Lane to watch: Kansas City, Missouri, to Miami

Overview: Tightening capacity in Kansas City signals spot rates will start to increase

Highlights:

  • Outbound tender rejections in Kansas City are rising as volumes level off after a steep fall last week.  
  • Miami’s outbound tender volumes are dropping at a steady pace, with outbound rejection rates under 10% signaling that the market is loosening. 
  • Spot rates for this lane are creeping up to $3.57/mile after hitting lows of $3.50.

What does this mean for you?

Brokers: Rates are starting to increase; be mindful of outbound rejection rates in Kansas City as the market begins to tighten. Pad your rates to go a little closer to $3.60-$3.65/mile to protect margin and not get buned on the rate. 

Carriers: There is almost a perfect load balance in Kansas City. The market is tightening though, so expect the inbound-to-outbound load ratio to skew in one direction. Hold firm on your rates going into Miami as the market loosens. 

Shippers: Capacity is loosening in Miami as rejection rates trend downward. Outbound tender lead times in both markets are over three days. As capacity continues to tighten in Kansas City, outbound tender lead times will continue to increase.