SONAR Indices & Insights: Use the RESL Index to measure retail sales trends to help predict shifts in the freight markets

Adam RobinsonFreight Market Blog

In this edition of “SONAR Indices & Insights,” the SONAR team will explain another index found within SONAR, the freight forecasting platform from FreightWaves. This week, learn how freight market participants are predicting shifts in the freight market that may occur with changes in retail sales trends using the SONAR index, Retail Sales with the ticker name of RESL. In this article, you learn what the RESL Index is, what it may tell various freight market participants, and what the RESL Index can do for each freight market participant. 

What is the Retail Sales (RESL) index?

Consumer spending accounts for roughly 70% of the U.S. economy, and we estimate 40%-45% of all freight consists of consumer-facing goods, so a healthy backdrop for retail sales is pivotal for rejuvenating a freight bull market. Therefore, as retail sales trends that show increases or decreases have an impact on the freight market, i.e. capacity and both contract and spot market rates, it is critical that all freight market participants, especially companies who are shippers in the consumer goods industries and the freight brokers who serve them, have an advantage when they utilize FreightWaves SONAR’s total inventory of available indices, particularly the Retail Sales (RESL) index.

The RESL index is a monthly measurement of retail sales trends provided by the U.S. Census Bureau and is an estimate that tracks purchases of durable and non-durable goods at the consumer level. This helps measure the demand for finished goods across a variety of categories such as department stores, furniture stores, electronics and more.

RESL, like many other SONAR indices, can be broken into a year-over-year chart to show growth in retail sales trends and seasonality. Use RESLG to use year-over-year breakouts per the screenshot below.

retail sales trends year over year

What can freight market participants fully measure with the RESL index that shows retail sales trends?

The retail sales trends data can be broken out into categories for a more granular understanding of performance in various retail sectors. This breakout allows for better comparisons for equipment types. Example: Retail sales for food and beverages (RESLG.FBEV) compared to reefer capacity (ROTRI.USA).

Retail Sales can be broken out into the following categories (Use RESLG. for year-over-year breakouts):   

  • RESL.USA – Total U.S. Retail Sales 
  • RESL.BLDG – Retail sales building materials, garden equipment and supply
  • RESL.CCAS – Retail sales clothing and clothing accessories stores
  • RESL.DEPT – Retail sales department stores
  • RESL.ELEC – Retail sales electrical equipment and appliances
  • RESL.FBEV – Retail sales food and beverage
  • RESL.FSDP – Retail sales food service and drinking places
  • RESL.GASS – Retail sales gas stations
  • RESL.HPSC – Retail sales health and personal care stores
  • RESL.MISC – Retail sales miscellaneous
  • RESL.MOTOR – Retail sales motor vehicle and parts 
  • RESL.MRCH – Retail sales merchandise
  • RESL.NSTR – Retail sales nonstore retailers
  • RESL.ONLN – Retail sales nonstore retailers
  • RESL.SGHS – Retail sales sporting goods, hobby, book and music stores
  • RESL.SOFA – Retail sales furniture and related products

How can each freight market participant utilize the RESL Index for use cases?

  • Analysts: Market analysts are keenly interested in retail sales trends year over year and their impact on the overall economy. Analysts can use the RESL index to gauge the path of the economy and health of the U.S. consumer.
  • Carriers: A freight carrier’s number one goal is to maximize asset utilization and revenue per driver. Asset-based carriers turn to the retail sales trends data to target consumer sub-segments that are in a growth pattern and position sales teams and trailers where there is more freight.
  • Freight Brokers: Freight brokers turn to the RESL index in a similar way as carriers. Brokers will use the RESL index to target shippers or carriers involved in particular sectors that are experiencing exponential growth and avoid segments that are in decline and offering fewer opportunities. Repositioning sales and carrier resources allow the broker to maximize revenue, profits, and ultimately, secure a higher margin percentage by putting seasoned retail freight brokers in these lanes and markets that see an uptick in a particular commodity. 
  • Shippers: Companies that ship freight will know that retail and consumer products make up a large portion of all freight capacity that is currently on the road or in the process of load planning. Shippers utilize the RESL index to not only measure their performance in certain markets compared to actual results but also to understand the overall impact of retail sales trends on the larger freight network. A more intimate understanding of the freight market will allow shippers to know if certain markets may have a lack of available capacity or may see differences in trucking spot rates based on the data seen in the RESL index. 

Keep ahead of the freight market by purchasing & using SONAR

In turbulent times, freight market participants need certainty to stay ahead of the freight market and understand the freight demand occurring in each participant’s most important lanes, markets and shipping modes. The premier freight forecasting engine, FreightWaves SONAR, allows participants to benchmark, analyze, monitor and forecast freight demand and costs in addition to the impact on the freight market seen in retail sales trends data within the RESL index. 

SONAR ensures more proactive responses to the market, provides correlations between several indices to guide decisions and helps to manage freight budgets or margins more proactively. Click the button below to get a demo of SONAR to see what the platform can do for you.