FreightWaves released the National Trucking Index (NTI) during Monday’s Day 1 of The Future Of Supply Chain event, providing a benchmark that is dedicated to measuring the direction of the domestic truckload market.
The NTI is a seven-day moving average of spot rates that measures the U.S. for-hire, over-the-road dry van trucking market. This sector of the truckload market represents about 90% of all trucking freight services.
The NTI’s moving average measures dry van truckload transactions that have been booked (not invoiced) on the spot market. Basing the reporting on booked transactions eliminates an average seven- to 10-day lag for existing measures. While national spot rate averages are not new, the NTI has been specifically designed to measure changes in the U.S. trucking market in its purest form.
In addition to giving SONAR subscribers the best visibility into a single national-level freight market rate, NTI will be used as a benchmark by shippers, carriers and brokerages to develop data-informed contracts for future freight services. NTI gives its users confidence that the rates they will be paying will not be dramatically overpriced compared to the current market rate. Because of the importance of freight shipping to the domestic economy, the information is also critically useful to financial institutions, academics and policymakers as an indicator of current and future economic activity.
The current report shows the NTI has dropped ~17% since the start of 2022, indicating a significant shift in the balance of supply and demand in the U.S. trucking sector. The NTI includes fuel costs as well, which have increased dramatically during the same period.
Because of the frenzied market that began shortly after the COVID lockdowns, shippers had bid rates up well above carrier costs over the last 18 months. However, they are now securing trucking capacity without having to bid for it in the open (spot) market. In other words, competition for capacity has declined.
The NTI was developed from FreightWaves Trusted Rate Assessment Consortium (TRAC) data, which requires its participants to strictly adhere to reporting standards for booked spot market loads. It is designed to be an index that measures trucking capacity value in a similar way to the West Texas Intermediate (WTI) index, which tracks crude oil prices, or the S&P 500, which tracks the stock market. NTI is reported daily by 9 a.m.
Dry vans represent the majority of the trucking market and provide the most density for reporting purposes. Dry van freight is largely focused on general commodities, giving it a broad exposure to the overall market, while other modes such as flatbed and refrigerated trailers tend to be more specialized freight in the manufacturing and food production sectors.
With transparency in mind, FreightWaves is also releasing three complementary indices to help provide additional context to trucking market trends:
- NTID – A daily average.
- NTIB – A business day daily average (eliminates the volatile weekend reports with their low density).
- NTIL – A linehaul-only value that estimates the impact of fuel costs and removes it.
While the trend lines remain the same, business days tend to move at a discounted rate and are less volatile than weekend days.
For much more information on NTI, please follow this link or go to: https://sonar.freightwaves.com/national-truckload-index.