Market Overview

Weekly Market Update: Freight Volumes Rise For Second Week In A Row As Flower Season Comes To An End In Florida

Share:
Weekly Market Update: Freight Volumes Rise For Second Week In A Row As Flower Season Comes To An End In Florida

National freight volumes continue to trend higher coming out of a relatively soft April. Volumes are averaging roughly 1.5% higher than April and 0.81% of that occurred in the past week. The steady increase is a good sign for carriers and brokers in terms of activity but not sharp enough to produce any significant disruption to capacity and market balance. National tender rejection rates were relatively flat, falling just 5 basis points (bps) in the past seven days to 4.3%, indicating carriers were still able to cover the available freight demand.

Florida was one of the few areas to see any significant capacity disruption as tender rejections were elevated, averaging almost 500 bps higher in the past eight days than April out of the Miami market. The annual "flower season" that coincides with the weeks preceding Mother's Day arrived, spiking reefer rejection rates to their highest levels since the Christmas/New Year holiday period. The reefer tender rejection index for Miami was over 10% for the first time in 2019 this week but has recovered to under 8% as the holiday gets closer.

Reefer rejections surge along with outbound volumes from the Miami area during flower season this year (Source: SONAR RTRI.MIA, OTVI.MIA

Contributing to the surging rejections, volumes have been elevated out of the two largest Florida markets, Lakeland and Miami, over the past few months. Miami averaged 18% higher volume so far in May versus 2018. Lakeland has averaged 9% higher this month versus last year. The region is typically characterized as being a heavy backhaul region with much more freight entering than exiting, leading to an oversupply of trucks most of the time. There are moments during the year, however, where this is not as much the case, especially for the temperature-controlled equipment haulers.

The Headhaul Index (HAUL), which measures the difference between outbound and inbound freight in a market, illustrates the fluctuations in market balance by taking the Outbound Tender Volume Index less the Inbound Tender Volume Index for the markets. A positive value indicates there are more outbound loads than inbound, while a negative value indicates an oversupplied backhaul market condition exists.

The Miami market's HAUL value has been averaging 19% higher in April and May versus February and March and 12% higher than the first week of May in 2018. As a result, spot rates have surged for reefer loads out of the area, jumping over $0.83 per mile to $2.64 over the past seven days according to DAT's Rateview tool.

Looking into next week, this time last year volumes starting to increase in earnest as they rose consistently until they peaked in late June. Capacity tightened in correlation with the increasing volumes as tender rejection rates followed a similar direction. Last year has been considered an anomaly of sorts, as the market was recovering from the impact of weather events, a booming economy, and the impact of ELD implementation (hype or not). So far, 2019 has seemed muted as upward rate pressure has been low on flat volumes. Look for volatility to increase, regardless, in the coming weeks.

The post Weekly Market Update: Freight volumes rise for second week in a row as flower season comes to an end in Florida appeared first on FreightWaves.

Image sourced from Pixabay

Posted-In: Freight freight volumes Freightwaves Logistics Supply ChainNews Markets General

 

Related Articles

View Comments and Join the Discussion!

International Seaways' Double Exposure To Crude And Products

Canadian National Subsidiary Acquires Intermodal Assets