How FreightWaves SONAR calculates its rates
- When an origin-destination (OD) pair is provided, we calculate the over-the-road distance and driving duration with traffic.
- A “market” is dynamically (i.e., on-the-fly) built for both ends of the OD pair using zip3s (the first three digits of any given zip code) within a radius determined by the lane distance and population density of the origin or destination. This means that the market for Chattanooga, for example, will look different if the destination is Columbia, South Carolina than it would if the destination was Las Vegas, Nevada.
- Tender data is aggregated in real-time for these markets.
- The rate calculation is derived from:
- A base rate calculated using hours of service data, cost-per-day to operate a truck, and driving duration
- Tender lead time with a premium for same day pickup
- Origin HAUL
- Destination HAUL
- Deviation from historic origin Outbound Tender Reject Index (OTRI) data
- Origin population density
- Destination population density
- Market share premium between origin and destination
- If the distance is less than 200 miles, we return “minimum rate” rather than a rate value.
- The forecasts (forthcoming) are derived using a probabilistic neural network that is trained using year-over-year changes in historic spot rates.
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