Did you know? You can measure long-haul capacity using Headhaul Indices – HAULEX100, and HAULEX250.
What is it?
Headhaul Index (HAUL): Calculates the difference between the Outbound Tender Volume Index (OTVI) and the Inbound Tender Volume Index (ITVI). By measuring the flow of outbound and inbound freight in a market, SONAR users are able to measure capacity based on the inbound or outbound trucks that are moving the freight over time.
OTVI.ATL – ITVI.ATL = HAUL.ATL
425.17 – 367.19 = 47.98
HAULEX100 / HAULEX250
The Headhaul Index can be broken down to exclude all loads that pick up and deliver within 100 miles of a market with the index HAULEX100, or exclude all loads that pick up and deliver within 250 miles of a market with the index HAULEX250. HAULEX100 and HAULEX250 are calculated very similarly to the main Headhaul Index, but the local and short-haul volumes are deducted from the inbound and outbound volumes, respectively.
In the chart above on the left, you will see the Headhaul Index for Atlanta (HAUL.ATL) compared to the Headhaul Index excluding all loads that deliver with 100 miles (HAULEX100.ATL) of Atlanta, and on the right, you will see the Headhaul Index (HAUL.ATL) for Atlanta compared to the Headhaul Index excluding all loads that deliver with 250 miles (HAULEX250.ATL) of Atlanta.
Who needs it?
Carriers: Carriers who run primarily in the long-haul market can use the HAULEX100 and HAULEX250 indices to help them make decisions on the best locations to send their trucks. Carriers want to send their trucks to the blue markets, more outbound loads than inbound loads that run 250 miles or longer. Red markets can warn carriers of regions that are saturated with capacity, pressing outbound rates down in those markets.
Brokers: HAULEX100 and HAULEX250 will help brokers gauge the long-haul capacity on the freight lanes they bid. Blue markets could signify tight capacity on lanes than run over 250 miles, a signal for brokers to increase their bids on outbound freight, and 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.
Shippers: Shippers that are looking for capacity to cover their long-haul loads will be able to measure the market conditions within their market without local or short-haul carriers. By removing the local and short-haul carriers, shippers will be able to see if the market is tight or loose on capacity with carriers that are willing to run long-haul loads, which could affect the rates they will receive from carriers.
What can I do with it?
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; 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.
The headhaul index does not measure trucks that are deadheaded into a market, only the flow of freight (outbound vs inbound) within a market.
HAULEX100 / HAULEX250
By excluding loads that deliver within the 100 mile (HAULEX100), or 250 mile (HAULEX250) range of a market, SONAR users will have a better representation of the capacity in the long-haul market. Trucks that deliver loads within 100 miles of an origin may never leave a market, or return the same day, and trucks that deliver within 250 miles of an origin could return to the market within a 24-hour period.
HAULEX100 and HAULEX250 can also be broken down by trailer type by adding a V for dry van, or an R for reefer at the beginning of the index. Example:RHAULEX100.ATL or VHAULEX250.ATL
In the chart above we have the reefer headhaul index for Atlanta (RHAUL.ATL) compared to RHAULEX100.ATL and VHAULEX250.ATL
Show me how!
1) Click: U.S. Map to view the headhaul index excluding loads that pick up or deliver within 250 miles at a high level to measure capacity in the long-haul market.
- Markets that are shaded blue (headhaul market) have more loads than trucks, a signal that capacity could be tightening.
- Markets that are shaded red (backhaul market) have more trucks than loads, a signal that the market has 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 HAULEX100 and HAULEX250 by dry van and reefer to understand capacity by equipment type.
Pro Tip: Use HAULEX100 and HAULEX250 in conjunction with the OTRI indices to help optimize your rates on loads in the long-haul market.
If you have questions about outbound tender volumes, please contact us at firstname.lastname@example.org.