Applying the Intermodal Drayage Volatility Indexes
With each intermodal load that moves on the DrayNow platform, data points are collected at every step, giving us the ability to provide indexes on these subjects.
The DrayNow 53′ Domestic Rail Intermodal Drayage Volatility Index is a measure of market variations by the changes in U.S. Rail Intermodal Drayage costs. This data is compiled in real time from freight moved through the DrayNow platform, enabling us to provide substantial data to indicate market trends.
This data shown above is displaying the weekly difference in cost, comparing this year to the previous one. All loads moving through the platform are included in the data, so along with features like the TRUprice tool, users can get a real-time snapshot of marketplace conditions.
For example, week 28 of 2021 saw a + 52% change, meaning that the cost to move freight has risen compared to this time last year. If a user is having a tough time getting a load covered at a certain price, they can reference the index to see if costs across the marketplace are up. As you can also see, the data from the same week in 2020 shows that there was a higher positive change in cost, meaning that costs are trending up, but by less in 2021.
The Accepted vs. Non-Accepted Price Gap Index examines the pricing difference in all freight that is accepted by carriers, compared with freight that is not accepted. This index demonstrates that when capacity is looser, pricing is less of a factor of acceptance. When capacity is tighter, pricing is critical to acceptance.
The baseline of the chart is 1, so at that point there is no difference in price per mile between the freight that’s taken and the freight that gets canceled. Anything less than 1 means the freight getting capacity is priced higher than canceled loads. The closer the index gets to 1, canceled and covered freight is more closely priced, indicating looser capacity.
DrayNow users can use this index as another tool to get a sense of the relationship between price and capacity on the marketplace. For example, May and June of 2021 saw the spot rate index at 0.81 and 0.66 respectively, pointing to differences in price between accepted and canceled loads. With this month-to-month trend pointing to tighter capacity, users can gather that this may continue into the next month. If a user’s freight is not getting taken at its regular rate, price is likely to be the determining factor.
When pairing these two data sets together, users can understand and visualize the overall health of the market. Access both of the indexes at the link here!
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