SONAR Observations: Demand Declines in Ontario, California; 20% off global ocean bookings

Below are highlights from Wednesday’s SONAR reports. To learn more about SONAR—the industry’s fastest freight forecasting platform—or to request a demo, Click here. Also, don’t forget to check latest update of SONAR, TRAC — the latest spot rate data in the industry.

Market review for October 5:

Ontario, California

Outbound volumes from Southern California are down, down and down again.

I’ve said it a hundred times before and I’ll say it a thousand times again: Southern California is the heartbeat of trucking. National outbound volume has remained stagnant for the past couple of weeks with a slight downward trend, coinciding with Ontario, California, starting to decline in own outbound capacity.

Since September 16, Ontario’s index of output tender volume has fallen 130 points, or 22.8%, to 437.6, the lowest reading since 2020. This has allowed the Atlanta market to take the largest share of the outbound volume market and Dallas to begin catching up as well.

Rejections are on the rise this week as volume continues to decline. The rejected tenders index rose 115 basis points over the past three days to a two-month high of 3.2%, reflecting carriers’ sentiment to seek better rates and opportunities in the spot market.

Elizabeth, New Jersey

The number of twenty-foot-equivalent units that have cleared customs and are ready to enter the ground transportation market is up this week, but the rejection rate in Elizabeth, New Jersey is down sharply.

The seven-day moving average of import TEUs at the port of New York/New Jersey SONAR rose 17% this week, but outbound tender volumes from Elizabeth have yet to respond, remaining flat and essentially where they were at the end September.

However, deviation levels are already reacting as they provide a more up-to-date view of capacity trends. The rejected tenders index for Elizabeth fell 75bp overnight as imports increased. This indicates that the carriers are effectively beating the automatic acceptance of their contract tenders.

NTI as a point of reference

The National Truckload Index is a daily look at how spot rates in specific lanes are holding up compared to the national average, giving carriers and brokers an idea of ​​which lanes to move to or avoid.

Ocean demand

Global demand continues to decline in the fourth quarter of the year, affecting both air and sea freight.

FedEx Express reported a major loss last monthand Maersk simply refused two transpacific services.

Up to 90% of cargo around the world travels on waves, and while this figure may still be true, the amount of cargo actually transported is infinitely lower.

The volume of bookings is 20% lower than this time last year. Shipper booking volume is what shows consumer demand. When a customer places an order, shippers send requests to carriers to pick it up.

Bookings from all 95 ports in the SONAR Container Atlas are down 13.5% since Saturday. This is a key indicator that consumer demand is falling even faster than expected, especially at this time of year leading up to the winter peak season.

Viewing lane: Ontario – Indianapolis

Spot rates from Ontario to Indianapolis fell 3 cents this week to $2.12 a mile, the lowest level in more than a year.

Carriers, on the other hand, expect four transit days, or more than 2,000 miles, with a good chance of booking a load after that. Indianapolis is one of the few markets with more than 1.5% market share to see volumes pick up this week, with those long-haul truck lanes derailed after a strike threat last month.

Denial rates out of Indianapolis have also jumped 65bps over the last couple of days. An increase in rejections will put upward pressure on spot rates leaving Indianapolis.

Watch: carrier update

The TOP 500 FREIGHTWAVES The list of hired carriers includes FedEx (No. 1).