We’re regularly enhancing and improving SONAR to meet the needs of the ever-changing freight market and the needs of our customers. To help keep SONAR users informed, we deliver a brief recap of newly released data sets, market indices, and product feature improvements in our This Week in SONAR series.
On a market level, not all rejection rates are created equally. For example: a 10% or 1000 basis point OTRI increase in the Bismarck, North Dakota market is not as significant as a 1% or 100 basis point change in the Atlanta market.
In this example, Atlanta represents a much larger portion of the national load volume than Bismarck, meaning fewer loads need to be rejected to create large changes in rejection rates in the smaller market. Identifying the most relevant markets by rejection rate change on a heat map or watchlist can be cumbersome because smaller markets have higher levels of volatility, therefore, exaggerating the scale. Combining volume with rejection rates into one number makes it easier to identify the most significant capacity shifts in the U.S.
The weighted rejection index (WRI) combines market share and weekly change in outbound rejection rates. This value combines market size with rejection rate changes, which enables the user to see which markets are most relevant from a capacity change standpoint.
The formula is: Outbound Tender Market Share (OTMS) x Outbound Tender Rejection Index Weekly Change (OTRIW)=Weighted Rejection Index (WRI).
For example: Atlanta tender rejection rates moved from 5% to 6% over the last 7 days while currently accounting for 4% of the U.S. outbound load volumes. The calculation would be: 4% x 1% = 4 WRI.
By contrast, the smaller Bismarck market moves from a 6% to a 16% OTRI over the course of a week and accounts for .01% of the total U.S. outbound load volume. The WRI would be: 10% x .01% = 0.1 WRI. The WRI makes it easier to see significant capacity changes on maps and watchlists while simultaneously signifying the impact of each market on national capacity over time in a chart.
The consumer is the backbone of the U.S. economy, especially while other segments slow in their pace of growth. The status of those consumers plays a pivotal role in their ability to prop up the overall U.S. Economy. The amount of disposable income of consumers impacts their ability to facilitate these purchases.
The real personal disposable income data was previously available in SONAR, distributed on a quarterly cadence. The new release will have real personal disposable income broken out on a monthly basis, as well as year-over-year for rate of change comparisons.
Real disposable income is a post-tax adjustment that shows the changes in income for households. The higher this is, the more they can spend on goods and services. The goods component, in particular, has implications for freight movements throughout the country. The more goods are purchased, the tighter capacity is, placing upward pressure on rejection rates.
All previous SONAR release notes are available HERE. Learn more by using Sue Says in SONAR and clicking on the orca! If you have any questions, please reach out to your Customer Success rep or email sonarsupport@freightwaves.com.
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