Truckstop.com, in partnership with the research firm FTR, launched Rate Forecasting, a tool that projects spot market rates by balancing seasonal, geographic, random, economic, regulatory and permanent trends with deep statistical modeling.
Rate Forecasting analyzes 10 years of market trends from across the Truckstop.com marketplace and applies FTR’s proprietary economic modeling algorithm that measures 13 million data points each month. The forecast covers 160,000 lanes, state-to-state and three-digit zip as well as 6 million origin and destination pairs, according to the New Plymouth, Id.-based company.
“We’re offering really specific information that can help our customers adjust, anticipate and predict rates and make more informed business decisions,” Truckstop.com Chief Relations Officer Brent Hutto said in a statement.
Users can search individual lanes and run custom calculations on Rate Forecasting by including it as an add-on to Rate Analysis, Truckstop.com’s big data rate platform or by working with the company’s integrations team to pull forecast data into their own systems through Truckstop.com Integrations, according to the company.
“I don’t think it benefits the shipper, broker or the carrier better, except in as much as a company has resources to take advantage of what it is putting out. So a smaller [entity] can still get a significant advantage by having this, versus having nothing before, but a large organization is going to be able to take it another step and use it in a much more significant fashion,” FTR Chief Operating Officer Jonathan Starks told Transport Topics.
Simply put, the new tool gives users a sense of how the spot market could be reacting in a given time frame, he said.
Asked if this could prompt a fundamental change in rate negotiations between parties, Starks said it has the potential to.
“Since it is so new, we are still trying to understand how do [users] view it, understand it, utilize it. But we think it has the potential change how [shippers and carriers] come together and work through forward-looking projections,” he said.
In April, Hutto said the forecast would be out in a few weeks and described the forecast as “week-over-week, a year out, adjusted every week.”
Starks explained the development process simply took longer than expected, “but it is out there now.”
“There is now the data, processing power and history to put something like this together ... to make it work on a lane-by-lane basis,” he said. “It is obviously a new way for marketplace to think about rates, especially forward-looking rates, so there is going to be a lot of trial and error and information we need to get out to them to help them understand it’s a projection.”
In related news, TransRisk said the launch date will be sometime next spring for its futures market where carriers, brokers and shippers can hedge their rates in the form of a contract that can be traded.
The project, developed with load board operator DAT, will include a partnership with one of the four top global financial exchanges, TransRisk CEO Craig Fuller told TT, but he declined to identify the exchange.
“By bringing in a large global financial exchange, versus organically launching it, the futures contracts would be available through nearly every financial broker in the world,” he said.
TransRisk expects to make a formal announcement soon, Fuller said in early October.
Staff Reporter Ari Ashe contributed to this story.