Lane SONAR Signals provide a snapshot of general rate control by lanes at both the origin and destination. However, the real implications of SONAR Signal to show a snapshot into the freight market are more significant than meets the eye. These values are easily recognized by their gauge design when viewing any lane. Shippers, carriers, freight brokers and forwarders, and third-party logistics providers (3PLs) need to understand why Lane Signals is among the most valuable SONAR resources.
Lane SONAR Signals reflect a measure of shipper versus carrier strength within a given origin or destination. The scores range from 0 to 100. Shippers are more likely to control rate negotiations when the score is 0-40, while carriers are more likely to control rate negotiations when the score is 60-100. Scores between 41-59 are often a toss-up in terms of strength. The need to assess a lane score with 100 units of measure is essential to consider the full picture of the freight market that millions of data points reveal when analyzed by SONAR, the premier freight analytics platform.
Lane SONAR Signals scores are derived from the various interactions of shipper and carrier strengths and market shares at the origin and destination.
For example, the freight rates consider these core indices from each point:
The gauges not only show the Lane SONAR Signal for the current week, but they also show the Lane SONAR Signal of that freight market for the prior week as a dotted line across the blue gauge.
The example above shows improvements for carriers as the white-dotted line for the prior week’s SONAR Signal moved from 45 to 53.
Lane Signal provides much more insight than merely seeing whether carriers or shippers have negotiating power in a freight market. The following chart breaks down some of the top insights from Lane Signal.
|Example Value Assigned.||Meaning||Capacity Impact||Lead Time Example for Origin Shipments
(Inverse Indicates Time to Opportunities for Backhauls From Destination) in Days
|Market Rate Insight||Shipper V. Carrier Favor||Type of Bidding Process|
|100||A signal of 100 indicates the location is experiencing a carrier is most favored||Extremely Limited and Highest Rejections||~7+||~1||Market rates at the total peak rate||Carriers dominate negotiations, provided they have any capacity to spare for contracts||Dedicated fleets (if lower-cost than spot rates)
Mini-bids (if carriers have the capacity to spare)
|75||As the signal moves further ahead of the prior week’s deviation, rethinking carrier balance will become critical||Limited Capacity That Results in Higher Rejections||~5-4||~2-3||Market rates approaching YOY records||Carriers with more shipper-initiated bidding processes.||Mini-bids to secure rates or capacity at rates slightly below the real market rate|
|50||An even score is beneficial to neither party. The market could swing in either direction||Tight Capacity With Little Room for Sudden Market Shifts; Some Rejections||~3.5||~3.5||True market rate for that origin or destination||Relatively stable contracts and few contract renegotiations||Annual contracts almost exclusively|
|25||Declining values greatly benefit shippers and offer key advantages to those needing to move freight faster.||Generally Available Capacity and Few Rejections||~2-1||~4-6||Market rates approaching YOY lows||Shippers with more freight in the spot market and possible carrier-initiated freight negotiations||Annual contracts with mini-bids to attract shippers from the spot market.|
|1||A Lane Signal of 1 is the ultimate low and reflects maximum control shippers may possess but comes with added risk for carriers that force a rebound||Available Capacity With Still Fewer Rejections||<24hrs||7+||Market rates at total record lows||Shippers dominate negotiations at the risk of a snapback from carriers trying to avoid bankruptcy||Market rates near record lows, and carriers begin to retake power through canceled transport|
Using data and insights
as your guide to freight
Lane Signal data provides core benefits to each freight management segment.
Depending on your target freight management party served (shippers versus carriers), more substantial movements to the extremes out of your favor may indicate a need to rebalance rates through new bidding processes.
Want to get a first hand look at Lane Signal or SONAR Signals to stay proactive with capacity and procurement cost planning by getting more actionable insights into the freight market? Click below to get a demo of SONAR or learn more about Lane Signals.