Among its many uses, FreightWaves’ SONAR SCI serves as an RFP management tool. FreightWaves has upgraded SONAR SCI; it now includes fuel surcharge estimates at the lane level. This provides users with a more complete pricing benchmark tool when developing or reviewing contract pricing agreements.
Fuel costs account for between 10%-20% of the total cost of operating a truck. And fuel prices can fluctuate significantly. Diesel prices have increased 45% since the start of 2022! Truckload carriers pass along at least a portion of fuel costs in the form of a fuel surcharge for contracted freight. This is normally displayed as an additional accessorial rate per mile based on the average retail price of diesel published by the U.S. Department of Energy (DOE) every Monday. It looks something like the table below:
There are many versions of these surcharge tables and their structures can vary. Regardless of their appearance, however, carriers take these tables into consideration when they establish pricing for an account, meaning customers with lower fuel surcharges will get higher base rates in general and vice versa. Taking fuel into account in the rate benchmarking process has always been important, but now it is imperative to have a solid understanding of how fuel costs are impacting specific markets and lanes across the United States.
Once users upload their lane-level data for analysis, they can quickly click over to the SONAR “Network View” to see the average benchmark rate and fuel for each origin market. Users also can see each individual lane by exporting the data to a spreadsheet and selecting “List” from the drop-down menu, which is located in the upper right hand corner of the SONAR SCI screen.
Global Supply Chain Pressure Index
FreightWaves is also adding the Global Supply Chain Pressure Index (GSCPI) to the list of available data in its SONAR platform. This index is published by the New York Federal Reserve Bank on a monthly basis and is a barometer that measures directional pressure on supply chains throughout the world. The higher the index moves, the higher the likelihood of increasing prices for transportation and service disruptions.
The index is derived from 27 data points that measure various aspects of the supply chain such as cross-border transportations costs and country-level manufacturing. A value of zero indicates the pressure on global supply chains is average, while positive or negative values indicate how many standard deviations the index is above or below the average on a normalized scale.
For example:, Aa value of 2 indicates the index is measuring two standard deviations above the average level with less than 3% of the total results occurring above this level. In other words, there is an extremely high likelihood of supply chain disruption in a very rare environment.