The new edition of the Cowen/AFS Freight Index, which was released today by New York-based investment firm Cowen Inc. and Shreveport, La.-based 3PL and freight audit and payment company AFS Logistics LLC, was in line with expectations, for truckload, less-than-truckload (LTL), and parcel activity, from the third quarter to the fourth quarter.
The index made its debut in October 2021. The companies said that the objective of the quarterly Freight Index is to provide institutional clients of Cowen with predictive pricing tools for various sectors—including less-than-truckload (LTL), full truckload shipping (TL), and parcel shipping (separately focusing on express and ground).
The companies explained that the by leveraging AFS’s access to freight data across various modes, coupled with applying advanced analytics like machine learning algorithms, they have developed models that they said provide a complete picture of the data’s depth and richness. And they also highlighted how along with the large amount of historical data, they are evaluating and selecting current macro- and micro-economic factors, which are built into their historical models, which includes the most recent GRI (general rate increase) announcement from a major parcel carrier. What’s more, Cowen and AFS noted that the Cowen/AFS Freight Index “offers a unique and comprehensive review of both past performance and the forecasted outlook for the immediate future quarter.”
The Index issued the following takeaways across the modes it covers:
“Predictions for truckload and parcel fall in line with conventional wisdom, as truckload is typically sensitive to macroeconomic headwinds and record GRIs join year-round demand surcharges to drive higher parcel costs, particularly in ground,” said Tom Nightingale, CEO, AFS Logistics, in a statement. “But what the index says about LTL may surprise some. Unlike truckload, LTL is expected to exhibit strength in the face of economic headwinds, supported by higher accessorial charges and GRIs, even as market conditions trend more favorably for shippers. Seven interest rate hikes since March of last year and continued inflation have taken a significant bite out of economic demand. While the index does not show a uniform decline across all modes, looking deeper shows the effects of macroeconomic conditions playing out, with carriers competing for more limited demand while searching for ways to claw back revenue.”