Capacity Trend Indices (CTSV52, CTSR52, CTSV4, CTSR4, CTDV4, CTDR4)

FreightWaves Customer SuccessCapacity Trend

What is it?

Capacity Trend scores translate tender volume and rejection data into a simple-to-use measure of capacity.  The Capacity Trend algorithm detects structural pattern shifts in load balance and tender rejection activity, along with the velocity of change of those data points that are normalized for each market. The strength of those patterns tell a SONAR subscriber how favorable market conditions are, from either a carrier or shipper perspective.

Capacity Trend insights are provided via two sets of indices:

  1. Market Scores – measurement of overall market favorability on a scale of 1 (least favorable) to 100 (most favorable).
    • Van and refrigerated (reefer) indices available
    • 52-week and 4-week data pattern lookback versions available for flexibility in RFP/bids or spot/transactional use cases
  2. Capacity Direction – measurement of the strength and direction of changes in capacity on a scale of -3 (strongest tightening) to +3 (strongest easing).
    • Van and reefer indices available
    • 52-week and 4-week data pattern lookback versions available for flexibility in RFP/bids or spot/transactional use cases

Markets with declining/low tender rejection rates and low outbound volumes in relation to inbound volumes will have lower Capacity Trend Market Scores. Markets with increasing/elevated tender rejection rates and high outbound volumes in relation to inbound volumes will have higher Capacity Trend Market Scores.  (e.g.100 is the tightest market, while 0 is the loosest).

The Capacity Trend Direction index is a single-perspective derivative input of the market score and provides immediate visibility into the direction and strength of changes in capacity. The stronger the value in either direction, the faster the velocity of capacity changes (i.e. a ‘-3’ indicates rapid tightening, ‘0’ indicates little change and ‘+3’ indicates rapid easing).

Who is interested?

Transportation Managers, Pricing Analysts, Freight Brokers, Carrier Representatives, Truckload Operators, Account Executives, Sales Representatives

What does it tell me?

Logistics economics 101: Tight capacity conditions are directly correlated with less asset availability and/or higher spot market prices, with the reverse for loose capacity conditions.

Capacity Trend Market Scores tell you the relative degree of leverage you have in a market. Scores closer to 100 will indicate a higher degree of leverage, while scores closer to 1 will indicate a lower degree of leverage. Scores around 50 will indicate neutral leverage. The highest and lowest scores will help you identify where situations are developing the fastest, which typically represent the greatest risk and opportunity situations.

Capacity Trend Direction tells you how quickly capacity is changing. While low or high Market Scores help you identify your leverage, the Capacity Trend Direction scores will provide you with additional insights into where your current leverage is trending, potentially signalling early detection of problems or opportunities.

SONAR Capacity Trend output provides a direct assessment of the direction and strength of market capacity. It also enables immediately actionable insights to focus your attention and to prioritize markets where unique opportunities exist, or risk should be avoided.

Capacity assessment can be leveraged in very specific ways across various business activities:

  • Operations:  

Utilize Capacity Trend Market Scores to manage daily loadboard prioritization and allocation of resources.

  • Procurement: 

Utilize Capacity Trend Market Scores and direction insights as negotiating leverage for procurement activities.

  • Sales & BD: 

Utilize Capacity Trend Market Scores and direction insights for targeted sales outreach based on ‘needs-driven’ market conditions.

  • Automated Pricing Tools: 

Utilize Capacity Trend Market Scores and direction insights as input signals/variables for real-time spot algorithms.

  • Performance Benchmarking: 

Utilize archived Capacity Trend Market Scores and direction insights as market condition-based KPIs to manage operational and financial activities.