An innovative way to deploy the value-intense insights of FreightWaves SONAR’s Lane Signal to understand freight shipments is the Headhaul Lane Score. Unlike SONAR’s Lane Signal, which provides origin and destination data, Lane Score uses that information to create an instant view score that can help front-line staff and managers make urgent decisions and strategic moves more quickly. And the benefits of using Lane Score transcend all transportation segments.
How SONAR data derives a Lane Score
SONAR’s Lane Signal is only the beginning of understanding freight shipments. Recognizing how to assess the freight tender for its attractiveness to transportation service providers is where Lane Score picks up where Lane Signal ends with the following factors in the Lane Score assessment:
- SONAR freight data comes from a wealth of sources, including carriers, brokers, forwarders, 3PLs, shippers, and general market conditions.
- The sum of these conditions analyzes nuances between origin and destination data to generate SONAR Lane Signal data.
- Lane Signal indicates the average strength of both the inbound and outbound tender volume indices (ITVI & OTVI).
- Extrapolating that headhaul data into a measure of the spread between OTVI and ITVI can better indicate which lanes and directions of movement are the most desirable for any freight management party.
- Lane Score is the carrier’s willingness to accept a given lane’s load over a defined duration.
It is derived from the interactions of the haul strengths that form the basis of indices that also contribute to Lane Signal. The score itself is scaled 1-36, with lower scores being easier to cover and the higher scores being hardest to cover.
The shipping industry needs
a new metric – the Market Rate –
to end the spot vs contract battle
Why 36 possible freight shipment Lane Scores
The 36 range comes from the 36 possible combinations assessed from the exponential varieties derived from:
- The outbound and inbound variances as RED versus BLUE.
- Three measures of demand of both RED (-) and BLUE (+) loads moved within these conditions:
- High (+/- 25.000 to +/-1000.00).
- Medium (+/-24.999 to +/-15.000).
- Low (+/-14.999 to +/-0.000).
Benefits of Lane Score by Segment
Lane Score’s insights provide actionable intelligence that can be used to guide transportation management.
Applying the Headhaul Lane Scores as a shipper means recognizing which lanes represent the low-hanging fruit for faster, easier tendering of freight shipments. For shippers, it allows immediate decision-making at the point of tendering a load. This effectively generates significant benefits, including:
- Less hassle in navigating the complexities between SONAR and an existing TMS.
- Identification of tight-versus-open trucking capacity markets.
- Broad indicators of general spot freight rates and spot activity within the market.
- Easy-to-distinguish scale values that can be used to tender a load at the right freight rate.
Carriers can further maximize resource allocation by applying the Headhaul Lane Score as well, deriving these additional benefits:
- Moving physical assets from markets with a higher Headhaul Lane Score and offering contracted capacity, assuming a carrier can spare capacity, to shippers in need.
- Moving assets to markets with a higher Headhaul Lane Score to stabilize the spot, true market rate.
- Attracting the attention of more drivers by being a bigger player in highly competitive markets.
- Reevaluating existing shipper and partnering LSP contracts, including those with brokers and 3PLs, to ensure carriers are not losing money.
- Improved decision-making when reviewing available modes that have already been tendered.
The benefits to brokers of applying a Headhaul Lane Score are highly comparable to a mix of benefits among shippers and carriers. These include:
- Reaching out to new carriers to secure more coverage for freight shipments – namely small, regional service providers that may have trouble securing loads on major load boards.
- Improving profit margins by empowering front-line workers with access to real-time data and predictions for a given lane, allowing for adjustment of broker fees on the fly.
- Targeting markets where shippers are experiencing trouble securing available capacity and meeting budget limitations in tight capacity markets.
- Continuously reevaluate freight bidding processes with carriers and shippers to ensure brokers provide the most competitive rate for transportation available.
In terms of the value of the Headhaul Lane Score, 3PLs have a unique position. Since a 3PL can combine all characteristics of carriers, brokers, forwarders, software-as-a-service providers, and value-added services, moving toward becoming a “4PL,” the potential insights of a definitive Headhaul Lane Score are immense and include:
- Identification of market trends surrounding total tendered versus projected volume.
- Better decisions regarding managing in-house fleets and when it is time to order more trucks or trailers, based on projections for planned peaks of freight shipments.
- Evaluating overall demand to recognize when freight volumes increase may contribute to an increased rate of errors in invoicing practices, which builds support for 4PL-offered auditing and accounting services.
- The ability to apply and realize the benefits associated with brokers, carriers and shippers in one step.
- When to reevaluate software development for improved executability and functionality to account for increased customer service inquiries and requests to manage the 3PL client base.
The real-world impact of Lane Score continues to expand
With Lane Score’s 36 possible scores and various implications, its impacts are too significant to ignore. Lane Signals data for origin and destination pairs provides vital intelligence. Lane Score gives you exactly what you need for make-or-break decisions that reduce rejections, create the most profitable business state and more. Get a look at Lane Score first hand by scheduling a SONAR demo today.