By LM Staff ·
October 26, 2022
The new edition of the Cowen/AFS Freight Index, which was recently released by New York-based investment firm Cowen Inc. and Shreveport, La.-based 3PL and freight audit and payment company AFS Logistics LLC, highlighted declines, for transportation costs, from the second to the third quarter, excluding ground parcel.
The index made its debut in October 2021. The companies said that the objective of the quarterly Freight Index is to provide institutional clients of Cowen with predictive pricing tools for various sectors—including less-than-truckload (LTL), full truckload shipping (TL), and parcel shipping (separately focusing on express and ground).
The companies explained that the by leveraging AFS’s access to freight data across various modes, coupled with applying advanced analytics like machine learning algorithms, they have developed models that they said provide a complete picture of the data’s depth and richness. And they also highlighted how along with the large amount of historical data, they are evaluating and selecting current macro- and micro-economic factors, which are built into their historical models, which includes the most recent GRI (general rate increase) announcement from a major parcel carrier. What’s more, Cowen and AFS noted that the Cowen/AFS Freight Index “offers a unique and comprehensive review of both past performance and the forecasted outlook for the immediate future quarter.”
The Index issued the following takeaways across the modes it covers:
- Truckload rates have fallen sequentially, with rates falling less than volumes, with the index forecasting rates going 18.3% in Q3 to 17.9% in Q4 and the linehaul cost per shipment down 0.8% in Q3 from Q2 but up 6.4% annually (that is 10% less than Q2’s annual growth rate, which the report said indicates the pace of truckload’s cost per shipment is declining;
- Less-than-truckload (LTL) weight and fuel surcharge per shipment fell from Q2 to Q3, with LTL cost per shipment down 2% for the same period, while posting a 20.3% annual gain. And accessorial charges per shipment were up 8.4% compared to the second quarter, with the Q4 LTL index pegged to be down sequentially, from 55.3% to 48.6%, for a 10.1% annual increase
- Ground and express parcel is expected to hit a new high of 28.5% in Q4, driven by aggressive peak surcharge increases and additional surcharge costs related to the seasonal increased share of residential business deliveries pushing up the average rate per pound for ground parcel, whereas Q3 was flat because of lower fuel surcharges and a higher average discount. Q3 fell 5.1%, due to lower fuel surcharges, declining average billed weight and a shift to premium services, with Q4 expected to fall 1.8% compared to the 2018 baseline, while being up 4.3% annually
October 26, 2022
Subscribe to Logistics Management Magazine!
Subscribe today. It’s FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!
Leave a Reply