SONAR Indices & Insights: Improve Freight Shipping Procurement with SONAR SCI’s Lane Acuity

Adam RobinsonFreight Market Blog

freight shipping procurement

In this edition of “SONAR Indices & Insights,” readers will learn about Lane Acuity, the newest product app in the ongoing development of the SONAR SCI (SCI is an acronym for “supply chain intelligence”) suite of products.  

The introduction of this first application within SONAR SCI was built with leaders at companies that spend millions of dollars on freight shipping. Supply chain professionals responsible for transportation procurement at Fortune 500 companies focus on three things – budget forecast accuracy, service scores and primary tender acceptance.

Read on to learn what is SONAR SCI’s Lane Acuity, what it tells subscribers who have purchased SONAR SCI, and how the application aids freight market participants by gaining deeper lane by lane insights around freight shipping.  

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WHAT IS LANE ACUITY?

Advancements in tender data science and paid market data now power SONAR SCI (Supply Chain Intelligence) Lane Acuity.  SONAR Lane Acuity provides lane-level insight into market stability and rate benchmarking, helping participants identify freight rate and capacity risk on a lane. 

In other words, think of Lane Acuity Pro as a volatility score for a given lane, throughout the year, determined by historical tender activity and rate volatility. The higher the stability score, the more consistent the rate and capacity are on a given lane, resulting in a consistently high rate of tender acceptance. The lower the stability score, the more likely a given lane will experience routing guide instability.

freight shipping lane acuity plus stability score

In the screenshot above, you can see that the outbound and inbound stability show scores of 29 out of 100 and 21 out of 100, respectively. These lower scores show that the lane is more volatile than stable (i.e. harder to procure capacity at the benchmark rate per mile) in both the outbound and inbound directions.

Lane Acuity also provides a measure of lane coverage favorability via the Lane Score, which evaluates multiple data points within the app.

freight shipping procurement lane score

The scores, freight analytics, and insights in Lane Acuity come from a combination of tender activity and historical contract freight rate transactions, from a pool of $80 billion worth of actual paid contract freight shipping rate invoices. This data has been collected over a 4 year period, broken down into shipper industry cohorts. When paid contract rate data is combined with tender activity on a given lane, Lane Acuity accurately predicts when and where routing guide failures are likely to occur. 

SCI aggregates $20 billion in annual shipper-to-carrier settled contract rate transactions from hundreds of shippers and thousands of carriers. Those transactions include millions of unique shipments, billions of miles of transit and trillions of pounds of freight. Instead of giving a general freight market overview, data is broken down by industry, accounting for the distinctive freight shipping rates and demand in each vertical.

What does Lane Acuity tell market participants about freight shipping procurement practices?

Lane Acuity is a key feature of SONAR SCI. It provides users deeper insights into a lane; they can score, measure and benchmark existing freight shipping procurement, as well as lane execution inside of a supply chain. Lane Acuity looks at a lane by mode inside a transportation sector. It can also show how a user’s targeted benchmark rate compares to the industry, the overall market, peers and at a pricing level.

Additionally, Lane Acuity shows multiple benchmarking, volume, rate and peer data across a set series of lanes based on historical paid invoicing data and real-time freight data. 

This lane-level intelligence provides insight into specific markets, origin/destination stability and contracted rates to inform both short-term and long-term (annual) trucking RFPs, freight network optimization decisions and more. That combines to help enterprises define and assess their ranking among peers by avoiding dairy to automotive comparison as an example, identify issues within existing bids, recognize the contributing factors affecting lane stability, apply seasonality and accessorials.

freight shipping procurement lane acuity pro list view

Lane Acuity generates more strategic freight shipping improvement goals, particularly mini-bids and capacity procurement, by the continued use of tactical (in-action) moves versus strategic (pre-planned) moves across the unified, digital and collaborative transportation network. Now, users can upload their data to tap Lane Acuity insights day or night. Additional implications include RFP strategy, knowing when to onboard new carriers, new lanes, hire more drivers or plan next distribution center sites. 

As of its initial release, Lane Acuity further provides current insight into the Historical Truckload Rate Data via the visual ticker and the current Outbound Tender Rejection Index for that specific lane’s origin.

Paying above-market rate in a low-volatility environment suggests overspending. Paying below-market rates in highly volatile lanes could lead to additional costs. 

Lane Acuity helps the following freight market participants with these use cases:

  • Shippers are interested because Lane Acuity provides protection and ensures they are running profitable lanes. By doing so, shippers are more likely to stay on track with their freight shipping budget with their yearly transportation spend while increasing capacity procurement.
  • Brokers can use Lane Acuity to help predict stability and longevity of rates within the market, and determine whether the lane should be quoted. Knowing the trends of the lanes can help widen their margins. 
  • Carriers will be able to see inbound and outbound stability on specific lanes. That helps with planning asset allocation and assessing current pricing structures.

How to use SONAR SCI’s Lane Acuity to improve freight shipping procurement

Think of the following use cases to gain the most impact in freight shipping procurement using SONAR SCI’s Lane Acuity:

  • Measure: Know where you stand, where you are strong, and where you can improve on a lane-by-lane basis at scale.
  • Prepare: Forecasting, stability, and Lane Scores provide real-time and forward-looking insights. This is the windshield and allows for users to locate and mitigate risks, analyze incoming bids and strategically award lanes, and so forth. 
  • Manage: View load balance and capacity trend scores to inform load planners where they have the leverage to negotiate declines and rate increases from carriers and brokers, custom market tables around origin and destination markets for all lanes. Alerts for HAUL and OTRI fluctuations. Tools for day to day tactical management of freight
  • Measure: This is the rearview mirror. How have you performed compared to the market and your peer group? Benchmark your performance against both the market and your peers. Gain in-depth reporting and the most accurate rate benchmarking available on the market to identify areas for specific areas for improvement.

Have confidence in lane-by-lane freight shipping bid analysis with Lane Acuity

SONAR SCI is sophisticated but simple; it provides actionable, near-time data, insights and freight shipping intelligence at a speed currently unavailable in the industry. SONAR SCI empowers users with a new set of critical performance management tools.

Intelligence is more than data or knowledge. Intelligence guides SONAR SCI subscribers with added context about where the market is going. In addition, SONAR SCI’s datasets are focused more on the contract freight market rather than the spot freight market.

SONAR SCI is also available as a stand-alone product with an included SONAR Starter platform that includes the predictive rating power of SONAR Lane Signal, pre-built Global Pages and the Critical Events tool. 

FreightWaves SONAR is the fastest and most comprehensive freight market data and analytics platform in the world. These are just a few of the 150,000+ unique indices available to SONAR subscribers. Not a FreightWaves SONAR user yet? Sign up for a demo here or by clicking the button below.