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SONAR sightings for March 25: Vancouver to Toronto, shipper update, more

The highlights from Friday’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, Georgia, to Allentown, Pennsylvania

Overview: Spot rates are likely to rise because the Headhaul Index increased 10% w/w.

Highlights:

  • The Headhaul Index in Savannah is up 10% w/w, but is very likely to climb further in the weeks ahead as import volumes convert to the truckload market. 
  • Outbound tender volumes in Savannah are up 10% w/w, signaling that demand for outbound capacity is increasing.
  • Outbound tender rejections are already up 165 bps w/w, which is likely confirmation that capacity in the Savannah market is already tightening significantly. 

What does this mean for you?

Brokers: The large increase in volume through the Port of Savannah is likely to continue putting pressure on capacity just as the harvest season arrives. With volumes increasing out of Europe to the East Coast, Savannah is likely to continue this trend in the weeks ahead. Get your loads tendered out further in advance and notify your team that they will likely need to price freight higher coming out of this market.

Carriers: Stay firm on your rates, as we are likely to see the 10% increase in the Headhaul Index cause capacity to tighten even further in the days ahead. Outbound tender rejections are already up 165 bps w/w, so if they rise even higher, the upward pressure should increase on spot rates. 

Shippers: Your shipper cohorts currently have tender lead times at 2.4 days, signaling that many shippers are not likely anticipating a tightening of capacity in the days ahead. Outbound volumes may have been slower to increase than expected due to the increased import volumes that have arrived through the Port of Savannah; however, it would be wise to push your lead times to between three and 3.5 days.


Watch: Carrier update


Lane to watch: Vancouver to Toronto

Overview: Intermodal volume has reached its highest level since September.

Highlights:

  • Total containerized intermodal volume averaged 622 units/day in the past week, the highest level since September. 
  • The recent increase in intermodal volume was driven by the international intermodal segment, which is the larger segment in the lane. International intermodal volume increased from an average of 300 units/day in mid-March to 487/day in the past week. 
  • The Toronto van inbound tender rejection rate increased from 12% at the start of February to a current rate of 20.8%. However, highway carriers may once again become more willing to head to Toronto given the recent increase in outbound volume.

What does this mean for you?

Brokers: Highway capacity is fairly loose in Vancouver, but you will likely find that some carriers are reluctant to head all the way to Toronto, especially since the market has shown signs of easing lately. When negotiating with carriers, stress that forward-looking SONAR indices, such as the Toronto Van Headhaul Index and the Toronto Outbound Tender Volume Index show signs that the market will likely experience some tightening in the coming days.  

Carriers: Other carriers have become more reluctant to head to Toronto lately because the market has shown signs of softening. However, a surge in Toronto outbound tenders the past couple of days suggests that the recent easing of capacity in Toronto is likely to be temporary and the market could be tighter by the time you arrive in Toronto. 

Shippers: In a lane dominated by international intermodal, the recent pickup in intermodal volume suggests that railway fluidity has improved. For loads that are too time sensitive to move by intermodal (perhaps due to delays on the ocean), keep lead times extended given the still-high Toronto van inbound tender rejection rate of 20.8%. 


Watch: Shipper update


Lane to watch: Elizabeth, New Jersey, to Richmond, Virginia

Overview: Capacity is loosening in Elizabeth, but outbound tender lead times are rising.

Highlights:

  • Elizabeth’s outbound tender lead times have hit 2.93 days, the highest since the beginning of the year. 
  • Spot rates are trending downward, coming in at $5.28 per mile and are expected to continue falling.
  • Richmond’s outbound tender volumes are in a constant state of yo-yo and are sitting in the valley, currently dropping 40 bps since last week. 

What does this mean for you?

Brokers: Richmond’s market is volatile, with volumes constantly swinging drastically within a week’s time. Watch the outbound rejection rates and when those start to fall, use it as an indicator that spot rates will go down. Take advantage of this lull and book before it swings back up to $5.50.

Carriers: Capacity is loosening in both markets. Load balance is pretty tight in both markets but both markets have numerous outbound loads. If trucks are headed into those markets, it shouldn’t be a problem getting out. Since Richmond varies so much, stay firm on your rates to make sure you don’t miss the upswing. 

Shippers: Outbound tender lead times are both firmly about 2.5 days and under three and use that as a minimum. With rate swings happening frequently (albeit smaller swings at the moment), it’s important to keep tender lead times further out so that freight spend doesn’t run wild this early in the year.