So you grilled, chilled, and blew things up for the 4th… now what?
Let’s check out what’s doing in the freight markets this week.
Volumes and capacity remain relatively flat in the major markets and for most of the country. This isn’t particularly strange for this time of year. A summer “slump” is usual; however this year it feels worse as many are looking for any sign of increased demand or at least a reversal of the current descending volumes.
The SONAR heat map above shows us that very little in the way of volume increases have taken place across the country over the past week. The indices on the map are tender rejections in color and volumes in elevation. Both are filtered for weekly changes.
Looking at the data and market fluctuations in specific markets is going to be the key to making it through this summer. The days of rolling into town with your big rig and getting money thrown at you are over – at least for the time being.
However, you can find the denaro if you have the intel.
Rates continue to flounder around the $2.00 per mile mark. In particular, this rate is hard on small fleets and owner-operators.
The right side of the SONAR chart above compares retail and wholesale diesel prices. The spread between the retail in blue and wholesale in green is the advantage the enterprise fleets have over the independents.
Throw that on top of the contract rate per mile in blue on the left side and you understand the disparity in the playing field this summer.
One more log on the fire to prove this truly is the summer of our discontent.
A slight nod to Billy S (William Shakespeare for those who are less literary). Yes, I know winter, blah, blah, blah. He wasn’t that good to be honest.
The SONAR chart above is a Most Volatile Market table. The markets are listed from largest market share to smallest market share. The colors indicate changes in the market conditions. Only those changes that are outside the normal fluctuations will make the list.
So, why is this important?
The chart shows that the only indices making the list in the largest markets are indicating a further softening in the overall freight market.
Houston is showing a moderate increase in outbound volumes. However, at the same time it is making a strong move toward a deepening backhaul market, causing capacity to loosen and drive down spot rates.
Ontario, California, has a moderate increase in rejections indicating a tightening market. While this is a good sign, it is not a strong trend as there is no support from the outbound volumes or the haul indices. It is more likely to just be an indicator that capacity is out of position and will self-correct.
So, what are you going to do?
Check out the SONAR market table and map below.
Since we started talking about Houston, let’s stay in the great state of Texas.
The map on the right shows haul on a weekly change basis. Texas is bright red – meaning the state as a whole is trending toward a backhaul market. A backhaul market is not considered a good place to look for high-paying loads or even a load for that matter.
Not so fast!
San Antonio and Austin are good markets to get a load and negotiate a decent rate.
I know, I know, the outbound tender rejection index (OTRI) is down. Yes, this means the market has loosened.
But, the markets are about to flip in carriers’ favor. Haul is up in both markets in a big way – 407% and 745%!
The impact on the markets is amplified by the strong increase in outbound volumes while both markets are seeing a strong decrease in inbound volumes.
Overall, it is a tough environment and the trends indicate this will continue for a bit. However, there is still money to be made if you have the tools to understand market dynamics.
Peace and love.
