In this report, we put forth an interesting, and admittedly imperfect, way to demonstrate SONAR’s value: publicly traded carriers and freight brokers that use SONAR have outperformed those that do not.
- The average stock price of SONAR customers over the past five years has appreciated by 114%, while non-SONAR companies’ stock has increased by 96%.
- Over the past year, the average SONAR customer stock price increased by 56% compared to a 35% increase for non-SONAR companies.
- The average earnings of the SONAR customers have increased by nearly 400% in the past five years, and nearly 500% in the past year. In comparison, non-SONAR companies’ average earnings per share have increased by 105% over the past five years and 98% year-over-year (y/y).
We understand the obvious pushback – as we all learned in Statistics 101, we are discussing a correlation, which does not demonstrate causation. We can brainstorm numerous reasons why there would be a correlation between SONAR subscribers and their performance – SONAR users are likely better capitalized than non-SONAR users so they are in the best position to “spend money to make money” and may be the same companies that have the youngest equipment fleets and are able to pay competitive salaries. It’s also possible that SONAR subscribers are the same companies that buy all available freight data (so you could also say that Brand X’s customers also outperform).
Also, one could argue the sample size we used was limited. The group of publicly traded SONAR customers in the sample included eight asset-based truckload carriers, four non-asset based logistics companies and three LTL carriers. The group of non-SONAR customers included three truckload carriers and five non-asset based logistics companies. We are not legally permitted to publish our customers’ names.
Still, we believe that the freight carriers and brokers that generate long-term share price outperformance do so because they generate returns on invested capital that are superior to their peers. It follows that the most efficient users of capital in the freight industry find SONAR to be a worthwhile investment.
To name just a few broad use cases:
- Freight brokers use SONAR to understand local freight markets inside and out in order to maximize volume and margins.
- Carriers use SONAR to take a disciplined approach to deployment, accepting only loads that will improve fleet utilization.
- Shippers use SONAR to manage day-to-day freight flows, benchmark rates against peers, make modal decisions, prepare for negotiations and hold carriers accountable for their service levels.
