The state of logistics in 2021 continues to undergo transformation and disruption (continued from 2020), and while companies are looking for new logistics strategies to stay proactive, there comes a point at which supply chain leaders need a simple, fast way to view market conditions. That’s especially true for organizations looking to manage e-commerce. Remember that the unprecedented demands of e-commerce have also added pressure on shippers to find capacity throughout all industries. Meanwhile, those same effects carry over into carrier responsibilities to strategically allocate assets.  Note, however, that the ability to apply data depends on the actionability of information. That’s where freight indices come into play. 

These factors are further seen in top-industry trends. As reported by Supply Chain Digest, “Online shopping is rapidly increasing as a share of retail sales, creating new demands for faster and cheaper delivery of goods straight to consumers. This trend is changing land use patterns and contributing to increased truck traffic and competition for curb space in residential areas. Emerging technologies from automation to delivery drones to the Internet of Things have the potential to transform the freight industry, disrupting old business models and changing the nature of freight jobs.” Clearly, the need for technology is absolute. And national freight indices are helping all freight management segments boost pricing strategies and understand how to better prioritize their operations.

Characteristics of SONAR-powered indices

The most advanced freight indices leverage real-time, historic and invoiced freight data to provide more insight into all operations and enable strategic competitive advantages. As examples, the characteristics of SONAR indices have helped to build the reputation of the SONAR freight forecasting platform and include:

• Larger sample size. A larger data sample size amounts to better information, leading to SONAR’s ability to show potential trends to better pre-empt market volatility.
• Consistent data collection. Consistency in data aggregation and analysis are key to maintaining index validity, applicability and actionability.
• Near-real-time data. Gathering data after the fact is standard, but collecting data in near-real-time is even better. Even data that’s captured weekly, such as the DHLPPI.USA, can be more valuable when viewed in the context of near-real-time SONAR indices.
• Instantaneous analysis. Using near-real-time data is also a critical step in applying and deriving fast, actionable analytics.
• Network-wide views. SONAR provides the ability to look beyond a 3PL-specific or carrier-specific analytics software and gauge the full market. 
• Creation of meaningful insights. Tracking a singular supply index is not the end of the equation, and by using multiple indices, freight management parties can create additional meaningful insights and supply chain KPIs.
• Drill-down functions. Seeing a market-wide logistics business index can help, but it should also give a user the ability to drill down into the data and understand its contributing factors, such as viewing the ITRI.ATL to see market-specific details.
• Dynamic development. SONAR and its indices are being further developed, refined and expanded by FreightWaves data scientists. They continuously revise algorithms and develop new indices that will add value for subscribers, regardless of whether a shipper, broker or carrier as well.