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Overview: Elizabeth becomes a less desirable destination for carriers as dropping outbound demand makes the market more balanced.
Highlights:
What does this mean for you?
Brokers: Brokers should lower bids in order to preserve margins. The narrow spread between intermodal spot rates and dry van spot rates provides little incentive to broker intermodal loads.
Carriers: Elizabeth is not as attractive a destination for carriers as it typically is. Outbound tender volume has dropped, and while outbound volume still exceeds inbound tender volume, a Van Headhaul Index of 11 is one of the lowest readings in the past year.
Shippers: Shippers moving loads under intermodal contracts should interpret the recent decline in intermodal spot rates to mean that the Class I railroads are less concerned with securing capacity for contracted shippers. Spot shippers should utilize highway carriers with highway rates and domestic intermodal rates nearly at parity.
Overview: In spite of rising volumes, outbound tender rejection levels continue to decline.
Highlights:
What does this mean for you?
Brokers: Recent declines in outbound tender rejection levels relative to a rise in outbound tender volumes indicate that additional trucking capacity appears to have entered the market. This is reflected in the declining spot rates, which will open up opportunities to push down rates now that there is greater carrier competition and lead to greater margins. Additionally, now that prices are declining there is an opportunity to grow business for those brokers that have an extensive internal carrier routing guide, as customers seek greater savings.
Carriers: Declining spot rates going into the Northeast mean that there is a larger supply of truckload capacity relative to demand. Knowing this, focus on tender compliance and if spot quotes become available there are still localized opportunities for greater revenue relative to contracted lanes depending on the location and customer.
Shippers: More trucking capacity and lower spot rates should provide some transportation cost savings. The rise in volumes relative to the decline in outbound tender rejections means that there are increased opportunities to not only push down rates but to also focus on service levels.
Source: freightwaves - SONAR sightings for April 29: Illinois to New Jersey, shipper update, more
Editor: FreightWaves Staff