Many shippers leverage freight rate indices to keep a pulse on what’s happening in the transportation market and to benchmark their rates and operations. But with multiple freight rate indices to choose from, what differentiates them? How do you select the right index for your needs?
John Martin from MercuryGate (a Talking Logistics sponsor) addressed those questions and more in a recent episode of Talking Logistics, “Freight Rate Indices: Understanding Their Role and Value in Transportation Management. He highlighted several important factors shippers should consider when evaluating different freight rate indices, including:
- Latency: How frequently is the index updated?
- Modes: Which modes or types of freight does the index cover?
- Scope: National versus local markets?
- Depth: How large is the data sample size?
- Rate determination method: Bidded rates versus actual rates? Spot rates versus contractual rates? Buy versus sell rates?
- Batch analysis: The ability to evaluate lots of shipments and loads at once.
- Accuracy and adaptability: The ability to configure confidence levels.
Watch the short clip below where John explains these factors in more detail:
I encourage you to watch the rest of my conversation with John for additional insights and advice on this topic, including how shippers and 3PLs are using freight rate indices, the value and benefits they’re achieving, and how they integrate with a transportation management system (TMS). Then post a comment or question and keep the conversation going!