Freight rates have become relatively unpredictable in the last decade, making it difficult for businesses to make informed decisions about managing shipping operations.
The best way to combat this is to get data-driven predictions through advanced tools that analyze and predict shipping rates.
Best tools for freight rate forecasting
Rate prediction tools have different methods for generating market data. Here’s an overview of the eight most-regarded options available and what you can expect when using them:
1. Truckstop
With its thirty years of experience in the industry, Truckstop excels at predicting shipping costs. It has maintained a 98% customer satisfaction rating and has helped with more than 80 million annual loads, demonstrating its commitment to customer success.
Truckstop’s offering, the Rate Analysis Rate Management Software under Rate Forecasting, can process tens of thousands of rates in minutes from various sources. You can view the week-by-week and lane-by-lane rate trends with ease.
Key features:
- Offers flexible plans for owner-operators of all kinds
- Presents you with better benchmark rates in real-time
- Tracks 12 million economic data points across 52 weeks
- Easy-to-use interface that can be integrated into the API
2. Sifted
Sifted is a logistics optimization software that combines data with expert insights. It aims to optimize 100% of parcel spend and operations, providing personalized recommendations to help you make more informed shipping decisions.
The company has recently introduced Sifted AI, an advanced logistics intelligence platform where you can monitor and manage your operations. It’s capable of generating advanced reporting and shipping analytics.
Key features:
- Anticipates future rate changes and surcharges through the GRI and Peak Season Analysis
- Contains a reengineered backend for fast processing and accurate results
- Provides real-time notification updates according to your customized alert settings
- Centralizes and visualizes freight trends through custom reports
3. SONAR
SONAR, originally created by Freightwaves, is a price reporting agency that monitors the global freight market with a focus on the global economy. It collects and offers high-frequency data for supply chain businesses, working with over 700 shipper, broker and carrier customers.
Its unmatched freight data and analytics can be attributed to its understanding of the global supply chain and how its climate can affect your business. It also streamlines the process to ensure optimal coverage for your freight needs.
Key features:
- Capable of providing truckload, rail, air, ocean or warehousing data
- Allows you to customize freight market alerts for changes
- Captures intelligence on critical events across the globe
- Offers insight pages that highlight trends in capacity shifts, demand changes and fuel prices
4. Vortexa
Vortexa was launched in 2016 to empower the oil and gas ecosystems with the leading shipping and trading market intelligence. Its team includes shipowners, freight analysts and many other industry experts who work with over 250 clients.
This company offers specific tools for freight rate forecasting, such as the Freight Outlook. This oil and gas freight market forecast intelligence can improve trade margins and reduce overall risk.
Key features:
- Predicts Baltic Exchange freight rate direction over the next four business days
- Ensures real-time fundamentals data
- Has more than 100 in-house experts to validate the data every day
- Offers an 80% prediction confidence rate
5. DAT Freight & Analytics
DAT Freight & Analytics leverages numerous freight marketplaces and tools to provide the latest market trends and data insights. It creates almost 700,000 daily load posts and has a database with more than $1 trillion in freight market invoices.
Rateview Analytics has forecasts with over 7 million daily predictions, all of which are verified to be 95% accurate. If you prefer to draw your own conclusions, you can also view the past, present and future freight market conditions through the Network Analytics.
Key features:
- Narrows down seasonal changes with 13-month pricing histories
- Displays average rates paid by brokers and shippers across lanes
- Provides Analytics Services to cleanse and aggregate data
- Creates custom reporting solutions for your business operations
6. Triumph
Triumph is a freight transportation brand that’s known for optimizing the freight transaction process for businesses, ensuring safety and fairness with each deal. It has recently acquired Greenscreens, a machine learning-powered predictive analytics platform.
Triumph Rate Intelligence is its recommended tool for freight rate transactions. It combines market-leading rate prediction capabilities to ensure accurate information. You can also use other advanced decision-making support tools, like batch rate predictions.
Key features:
- Delivers real-time market rates on an updated dataset
- Provides predictive intelligence behind every rate
- Allows customization for your business operations
- Ensures seamless integration with your tech and carrier
7. Xeneta
Xeneta is the largest ocean and air market analytics platform, with over 600 million freight rates and over $60 billion benchmarked freight spend. It aims to make the logistics industry as measurable as possible so that situations can be solved and navigated properly.
Its platform is impactful toward numerous businesses in the freight industry. On average, it has reduced shippers’ annual freight spending by 6.5% and ensured 50% improvement in budget accuracy. You can also add extra datasets to track performance and sustainability.
Key features:
- Gathers millions of rates monthly for validation before release
- Displays real-time and on-demand ocean and air freight rates
- Has intelligence tools specifically for air freight and ocean freight, respectively
- Analyzes your supply chain logistics to pinpoint the ideal price-to-quality rates
8. ACT Research
The team at ACT Research has over 250 years of combined industry experience forecasting commercial vehicle and transportation markets. It prioritizes data integrity when creating and publishing its in-depth analysis and forecasts.
Professionals can receive data-driven expert analysis on the most critical aspects of the commercial vehicle sector, including the freight and transportation markets. Stay up-to-date with freight rates, volumes, engine production and more.
Key features:
- Provides a GDP measure of the economic activity responsible for freight
- Covers LTL and Intermodal sectors of the freight market
- Offers freight rate trends and capacity indicators for adjusting pricing models
- Detects freight rate fluctuations to manage shipping capacity
Methodology for assessing top freight forecasting solutions
With many rate prediction tools available, it can be challenging to determine which ones are legitimate and effective. Here’s an overview of factors to help you choose the right investment.
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Compatibility with needs |
Freight rates can vary depending on the route, vehicle type, transportation mode and other factors. If you need specific numbers, seek a tool that can provide them. |
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Return on Investment |
These tools can all have different price tags and structures. The ideal tool would be within your own set budget and provide returns in terms of informed decisions and financial gains. |
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Overall coverage |
Some freight rate forecasting tools can monitor different trade lanes when predicting shipping costs. Ideally, the provider would have good coverage of these data sources. |
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User-friendliness |
Freight rate forecasting tools should have an easy-to-use interface ideal for small to medium-sized businesses. Look for search fields and other navigation features. |
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Data accuracy |
Forecasts should be highly accurate and offer good data quality. Most achieve this by using numerous forecasting methods and getting expert verification before publicizing information. |
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Integration |
Including a freight rate forecasting model is always an adjustment. Providers should help you with this transition, whether it’s through data transfers or program orientations. |
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Customer service |
The providers should address inquiries and concerns promptly. It’s better if they have multiple communication channels and reply with helpful information. |
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Additional features |
Seek the opportunity to use or trial other freight industry-related tools to learn what else can improve their business. These can be obtained through packages or add-on offerings. |
Factors That Affect the Freight Rate Forecast
Freight rates shift so often that they can make a previous day’s forecast differ from the current, especially for real-time datasets. Here are the factors that affect this information.
1. Capacity Shifts
Carrier capacity can change from time to time depending on what fleets are available, whether ports are congested and much more. The less availability and more congestion there is, the higher the rates are. Some may even come from surcharges.
These capacity shifts can be relatively predictable, especially for industries dependent on seasonal demand. However, general factors like cargo type, size and weight can change space and handling needs.
2. Fuel Costs
Fuel prices regularly fluctuate due to shifts in supply and demand in the oil market. Unfortunately, since most freight transportation is dependent on diesel, it tends to reduce or spike the carriers’ operating costs.
When operating costs increase, direct adjustments in freight rates follow. There’s very little control over fuel prices, which is why it’s best to rely on the top-rated tools for freight rate forecasting and anticipate these changes.
3. World Events
Geopolitical events can also influence freight rates. Some of it can be indirect, like how certain countries have more influence on fuel prices, but there are more obvious variables like trade policies and route monopolization that can create uncertainty and hike up the prices.
Economic recessions in different countries can also influence the overall freight rates. However, while the numbers themselves may fall, availability tends to shrink as more businesses try to take advantage of these prices.
4. New Regulations
Regulatory changes regarding the freight industry can also affect rates in the long run. For example, if there are rules limiting the number of ships allowed to operate due to age or quality, it affects vessel availability and sparks competition once again.
Emissions targets are another instance, as they can spike interest in alternative fuels and more efficient technologies. Shipping companies that invest in these may pass the additional operational costs on to their clientele.
5. Forecast Horizon
Freight rate forecasts can look different depending on the sample size. Ideally, providers would get plenty of historical data that they can analyze for their predictions. If the time period is too short or there are few data sources to pull information from, this would entail more errors in their predictions.
Benefits of Getting an Accurate Freight Rate Forecast
Freight rate forecasts are a worthwhile investment for business owners and entrepreneurs who want to expand operations and seek shipping.
1. Better Cost Savings and Cash Flow
Accurate forecasts can give you a glimpse into freight rates and identify the most cost-effective options. They can also prevent overpaying for shipping services since you can easily compare and contrast those options.
You can also use the information to create more comprehensive financial plans for the future. Anticipate fluctuations and account for them in accounting practices moving forward to increase the chances of economic stability.
2. Enhanced Negotiation Power
Instead of using the freight rate information passively, businesses can use it to approach carriers and negotiate the rates and terms. It would result in considerable cost reductions, which would improve your overall financial standing in the long run.
Awareness and understanding of the market trends let you know how much ground you have to work with. Plus, that knowledge can help you define contract details and ensure proper compliance from all parties involved.
3. Good Risk Management
Businesses should learn what risks they should and shouldn’t take. Freight rate forecasting tools can reveal how to optimize their budget for the current shipping climate and what strategic decisions would lead to more cost savings in the long run.
For instance, the freight market can be more volatile due to supply chain interruptions. Strategies such as diversifying transportation options can minimize the increased rates and surcharges your business has to pay.
4. Improved Resource Allocation
Better resource allocation due to freight rate knowledge can lead to informed decision-making about transportation modes and routes. Apart from cost control, you want to achieve timely delivery of goods and ensure customer satisfaction.
The information can trickle down to numerous tasks, from refreshing inventory levels to sending high-volume cargo to various consumers. In addition to efficiency and reputational benefits, you’d also be reducing overall storage costs.
5. Better Transparency
Shippers, carriers and stakeholders can use freight rate forecasting. The availability of such information can help businesses of this nature stay on the same page, allow communication and promote collaboration.
While there is an air of competition from similar companies, shippers can still partner with carriers and ensure that their supply chain processes remain efficient. Freight rate data can also spark more proactive decisions and better business performance.
Enhance Your Freight Rate Forecasting
Knowledge is power and an absolute must to navigate the shipping industry. Utilize the top-rated tools for freight rate forecasting to improve bidding, delegating and negotiating shipments in the long run.
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