Daily Tip: Headhaul Index (HAUL)

Ashley McAvoyDaily Tips

Did you know? SONAR’s Headhaul Index is a great tool to measure changes in capacity.

Each day we’ll send you a daily tip designed to guide you to becoming a SONAR expert. If you have any questions, please contact your Customer Success Representative or email the team at cs@freightwaves.com

Headhaul Index (HAUL): Calculates the difference between the Outbound Tender Volume Index (OTVI) and the Inbound Tender Volume Index (ITVI). By following HAUL, which measures the flow of outbound and inbound freight in a market, SONAR users are able to see capacity over time, based on the inbound and outbound trucks that are moving freight.    

Example: On June 20, OTVI.ATL was 470.93 and  ITVI.ATL was 423.51. 

OTVI.ATL  –  ITVI.ATL  =  HAUL.ATL

 470.93     –   423.51    =   47.43

The Headhaul Index (HAUL) is a good indicator of capacity changes. For example, if the HAUL score is increasing, that suggests a tightening of capacity in the specified market. However, if the HAUL score is decreasing, it signifies that available capacity is growing. SONAR users can drill down in the Headhaul Index to specific regions and market granularity. 

View the Headhaul Index in the U.S. Map feature

Headhaul Index – U.S. Map view

Carriers: The Headhaul Index helps carriers better position their trucks – run to the blue. Blue markets contain more freight than trucks, giving carriers more freight options to choose from, and can lead to better rates if the headhaul score remains elevated over a period of time, meaning tightened capacity. Red warns carriers of markets that are saturated with capacity, pressing outbound rates down in those markets.   

Brokers: Capacity is everything when it comes to brokers bidding freight on the spot market. Blue markets signify tighter capacity – a signal for brokers to increase their bids on outbound freight – and to increase their margins. Red indicates backhaul markets where carriers need help relocating their trucks to healthier, blue markets. Brokers should be able to book loads at a lower rate per mile for loads that deliver into blue markets. The Headhaul Index will help brokers understand where carriers want to run.   

Shippers: The Headhaul Index allows shippers to monitor the changes in capacity for the markets they operate in. When their markets turn blue for an extended period of time, it is a signal that capacity will tighten, and shippers should extend their tender lead times to ensure capacity for their loads. When their markets turn red, shippers might shorten their tender lead times, and look to the spot markets for lower-cost capacity. 

The Headhaul Index (HAUL) is a good indicator of capacity changes in a region or market. When the HAUL score is positive, it indicates that there is more outbound freight than inbound freight in that market, and therefore a higher demand for capacity. If the HAUL score is negative, there is more inbound freight than outbound, which shows an excess of capacity. Capacity drives rates, so the Headhaul Index will help SONAR users predict upcoming changes in spot rates in certain markets.

Note that the Headhaul Index does not measure trucks that are deadheaded into a market, only the flow of freight (outbound vs inbound) within a market.   

The Headhaul Index can also be broken down by equipment type at a market level by adding a V for dry van (VHAUL) and an R for reefer (RHAUL). Example: VHAUL.EWR – Dry van headhaul score: 30.67, RHAUL.EWR – Reefer headhaul score: 17.81. 

1) Click: U.S. Map to view the Headhaul Index at a high level to see which markets are headhaul markets, and which markets are backhaul markets.

  • Markets that are shaded blue (headhaul markets) have more loads than trucks, a signal that capacity could be tightening.
  • Markets that are shaded red (backhaul markets) have more trucks than loads, a signal that the markets have an oversupply of trucks.

2) Click: Chart to view the historical trends and changes in the Headhaul Index.

  • Markets with positive trends can tighten capacity, and drive spot rates upward.
  • Markets with negative trends are saturated with capacity, which can push spot rates down.
  • Break down the Headhaul Index to understand capacity by equipment type. 

Pro Tip: Click the Video Tutorials link to watch on-demand training videos provided by FreightWaves’ Customer Success Team. 

If you have questions about SONAR’s Headhaul Index, please contact us at cs@freightwaves.com. 

Happy Hauling,

FW Team