Let’s peek at the data and see if peak season is coming or not.
My interest is … piqued.
The SONAR chart above is showing the last four years of outbound tender volumes. Right now we are at the end of summer, the beginning of the fall, which marks the start of the peak season.
Actually, we are late by a few days or a week in seeing any strengthening signs in volumes.
This next week or so is going to be critical to see how this peak season turns out — or … doesn’t.
So what does the data say?
The SONAR chart of rejections above has been telling us that there is not enough demand to cover the contract capacity. The cup is not even full, let alone flowing over.
Contract rates have been on a downslide since July and are currently gaining speed in their decline. However, there is still a significant enough spread between the lower spot rates and contract rates.
If demand were strong or gaining, we would actually see volumes and rejections dropping more rapidly as shippers utilize spot as a rate reduction tool. (Intentional routing guide failure sounds counterintuitive, but it happens.)
The numbers tell us that contract fleets are taking everything they can and are not motivated to move assets to the spot market — because there is no need.
Things are soft and the pickup of peak season is not here — at least not yet.
The SONAR map below is showing truckload volumes in both color and elevations for clarity.
Notice the red depressed areas of Ontario, California; Atlanta; Chicago; Dallas; Harrisburg, Pennsylvania; and Elizabeth, New Jersey.
The traditional market drivers are down and declining. Even Columbus, Ohio, and other inland distribution markets are in the red.
This indicates that the demand for capacity is still not upon us.
A rather unnerving sign is this next chart. This is one to look out for and follow upstream.
Ontario is driven by the imports from Los Angeles; however, we see an increase in outbound from Ontario as inbound from the port is declining.
The SONAR charts above are showing the four-year truckload volumes for the two largest freight markets in the country. Both are trending down and are already at 2018-19 levels.
Credit card delinquency is up as inflation continues and goods imports are continuing to soften.
The Container Atlas chart above from SONAR shows that import TEU bookings continue to decline as the largest retailers announce reductions in the billions of dollars.
The market is soft and will continue to soften is what the data is saying.
Keep in mind that the selling season could be good and there is inventory to move without the imports.
Is that good? If the consumer goes nuts, will we see bare warehouses again and another tidal wave?
Hmm … I think not.
Ocean rates don’t drop like this with strengthening demand.
Peace and love