Cleveland, Ohio has plenty of capacity and drivers. They’re arriving at a faster and faster pace every day, yet they are rejecting loads.
So, what is happening?
I’m from Cleveland, and no offense, but let me tell you there is not much there to convince a driver to stay and reject a load.
The SONAR chart below appears to ignore all the laws of freight market dynamics that FreightWaves has been informing you about these past five years.
Rejections should not be going up as volumes decrease!
The impact of surrounding markets is what is at play here and this part of the country between Pittsburgh, Pennsylvania, and Rock Island, Illinois is especially vulnerable.
The I-80/I-90 Great Lakes corridor can fool a carrier or a shipper much like the gales of November. No one? Realy? Gordon Light…forget it.
Check out this next SONAR dashboard. This is a perfect illustration of how not paying attention to the surrounding markets or various modes of transportation can lead you astray in a hurry.
The left side is a market table built to display the markets along the I-80/I-90 corridor along the southern shores of Lake Erie and Lake Michigan.
Haul, Inbound and Outbound volumes, and the rejections of those tenders are all that is really needed to be charted in order to understand what is happening and therefore to prepare yourself.
Outbound volumes are demand and inbound volumes are supply. Haul measures the ratio and rejections measure the resulting impact.
A shipper in Cleveland would feel pretty good about gaining capacity and lower rates looking at market current dynamics in the market.
Haul is at -12 and deepening, while inbound loads are growing and outbound loads are slowing. There should be plenty of eager drivers out there to haul your loads.
In fact, the rejection rate of inbound loads into the Cleveland market has decreased. This means that inbound capacity is growing beyond just the increase in inbound loads.
But, still no takers on outbound loads?
There is a force greater than the burning Cuyahoga at play…
CMH, CVG, and IND – otherwise known as Columbus, Cincinnati, and Indianapolis are a stone’s throw or two away and are sucking capacity from the surrounding markets.
Outbound is growing as inbound shrinks in these markets, and when that happens in Columbus you can forget about your capacity in Cleveland.
The map to the right indicates the level of impact. The blue colors indicate that outbound is growing faster in relation to inbound in these markets. Making matters worse is the growth in outbound loads represented by the elevation.
The left side will help explain this. In Columbus, OTVI is up and so is ITVI. This means both inbound and outbound are increasing in volume. However, the outbound is far outpacing the inbound.
In Cincinnati, we see that OTVI is up and ITVI is down. This is especially bad for shippers as the volume of capacity entering the market is decreasing as the volume of capacity leaving the market is increasing.
This is creating an indraft of capacity from weaker backhaul markets like Cleveland.
Keep diligent out there. Gold can be found with some insight.
Peace and love