The FreightWaves Supply Chain Pricing Power Index leverages the analytics and data available in FreightWaves SONAR to provide insights into the market dynamics and estimate the negotiating power for rates between shippers and carriers.
This week’s Pricing Power Index is influenced by various indicators, including the recovery of volumes from seasonal fluctuations. While the freight market continues to grapple with seasonal depression, there has been a positive year-over-year growth in tender volumes, indicating a potential shift in market dynamics. The Outbound Tender Volume Index has erased holiday noise and is now showing a slight decline week-over-week but trending upwards in recent days. The impact of the Martin Luther King Jr. Day holiday on tender volumes is also being observed, with comparisons to last year’s volumes.
As the new administration settles in, there is anticipation regarding the impact of potential tariff changes on freight volumes. Additionally, the upcoming Lunar New Year and rising inbound ocean volumes are expected to influence intermodal volumes more than direct truckload market flows in the first quarter.
The Contract Load Accepted Volume index reflects a greater decline in accepted load volumes compared to the overall tender volumes due to increased tender volumes. Bank of America’s recent card spending report indicates a year-over-year decrease in spending, particularly in entertainment and furniture categories, attributed to severe winter weather conditions in the Midwest and South.
Despite a slight decline in national tender volumes, most freight markets experienced growth in the past week, with notable increases in volumes in Midwest markets like St. Louis and Jefferson City. Atlanta also saw a significant volume increase, showcasing one of the strongest-volume weeks.
In terms of mode-specific analysis, the dry van market rebounded with a weekly growth in the Van Outbound Tender Volume Index, while the reefer market experienced a slight decline in tender volumes. Winter weather conditions have boosted tender rejection rates, with an increase observed in the Outbound Tender Reject Index. Weather-impacted markets in South Dakota, Montana, and Iowa reported the highest rejection rate increases.
Spot rates have remained sticky near 52-week highs, reflecting the market’s shift towards carriers’ favor. The National Truckload Index and dry van contract rates have shown increases, while spot rates from Los Angeles to Dallas and Chicago to Atlanta have fluctuated, with the latter surpassing contract rates to reach the highest level in six months.
Overall, the data and analytics from FreightWaves SONAR provide valuable insights into the current market conditions, helping industry stakeholders make informed decisions regarding pricing strategies and negotiations between shippers and carriers.
