SONAR Sightings for June 23: Atlanta to Columbus, Ohio, carrier 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: Atlanta to Columbus

• Spot rates are up 3.2% over the last month in this lane and are not following the national trend of moving lower over the past two weeks. 
• Atlanta’s outbound rejection rate jumped from 7.42% to 8.58% on Tuesday, its largest single-day jump in over a year. 
• Columbus’ outbound rejection rate is once again on the rise, eclipsing 7.3% after bottoming out around 5.8% just over a week ago.

What does this mean for you?

Brokers: Covering freight out of Columbus is going to be more difficult. The benefit is that conditions in Chicago are improving, making it more attractive for carriers. As drivers come off the road for the Fourth of July holiday weekend, upward pressure on spot rates will likely mount. Try to keep them stable around current levels for as long as possible as current rates are still well above the national average.

Carriers: Conditions have improved over the past week as rejection rates have increased. However, the FreightWaves TRAC spot rates have yet to react to the higher rates. Keep placing upward pressure on the spot rates in this market as you have clawed back some of the pricing power in the market ahead of the holiday. Even as is, the FreightWaves TRAC spot rate is 62 cents per mile higher than the NTI, making this lane attractive for carriers.
 
Shippers: The next 10 days will be some of the toughest in the summer season in terms of securing capacity. The result will likely be higher prices in order to secure capacity. Additionally, increasing lead times ahead of the Fourth of July holiday will help to ensure the necessary capacity without having to pay rates near $4 per mile.

Watch: Carrier update

Labor issues have dominated railroad discussions during the past week. I consider the action that the National Mediation Board took to end mediation efforts between groups representing U.S. railroads and labor unions to be a big win for labor. Labor had wanted a quick end to mediation efforts so the clock could start on the first of three potential 30-day cooling-off periods under the guidelines of the Railway Labor Act. I believe that labor has the upper hand as long as Congress is still controlled by Democrats. Ninety days from now, the midterm elections will only be a few weeks away and I believe that Congress would intervene to end a potential strike, if it comes to that. Instead, assuming no agreement is reached by then, I expect Congress to put an end to the dispute by enacting recommendations from the Presidential Emergency Board. Those recommendations are likely to be sympathetic to labor. 

The U.S. railroads aren’t the only ones facing labor issues – Canadian National Railway is as well, with operational contingency plans in place if a walkout from the International Brotherhood of Electrical Workers takes place this weekend. In addition to labor, the railways face no shortage of other pressures including demands from the Surface Transportation Board to improve service levels and disclose better service data. There is also pressure from investors to keep operating ratios at least in line with peers. All of this comes amid a slowing economy – while the railroads have scrambled to add labor and other resources, there is the real possibility that volumes will fall to the point that the railroads are over-resourced. 

Source: freightwaves - SONAR Sightings for June 23: Atlanta to Columbus, Ohio, carrier update, more
Editor: FreightWaves Staff