Boasts Errors of Less than 10% Over Holiday Season
The FreightWaves data science team used historical market and expense data to forecast future market conditions. The thesis is that FreightWaves Benchmark Spot Rates can be calculated for future dates. When finalized, this tool will assist clients in understanding the effects that coming changes in markets might have on spot rates, and will aid in both short- and long-term decision-making.
The FreightWaves Benchmark Spot Rates provide a cost-based model for setting spot rates for more than 735,000 zip3 origin-destination pairs greater than 250 miles in the contiguous United States.
The model is shown below, with the major input variables to the model shown above the FreightWaves Benchmark Spot Rates for those market conditions.
Accuracy of the Forecasts in FreightWaves’ Benchmark Spot-Rates
- Review of Projected Vs. Actual Benchmarked 2019 Peak Season Periods:
- National-level percent error at 6 months of 8.64% for Thanksgiving.
- National-level percent error at 6 months of 11.81% for Christmas.
- Hypothetical Error Rate using the 2019 Season as Actual Rates.
- 6 Month Accuracy Error Rate of 5.11% for the Thanksgiving holiday season.
- 6 Month Accurate Error Rate of 10.64% for Christmas.
- National level average error percent rate breakdown from 5/1/20-6/15/20.
- 7 Days / 5.56%
- 28 Days / 5.63%
- 84 Days / 5.39%
Regardless of region, error rates were similar.
Findings suggest advance data has a < 11% rate of error, keeping freight spend within 11% of projected amounts.
Request a Demo of SONAR today to start forecasting the rates on the spot market and keep your freight spend in check.