Cowen Inc. and AFS Logistics LLC release new freight index, with a forward-looking view

Earlier this month, New York-based investment firm Cowen Inc. and Shreveport, Louisiana-based 3PL and freight audit and payment firm AFS Logistics LLC announced their partnership to deploy a new offer, titled Cowen / AFS Freight Index.

The companies said the goal of the Quarterly Freight Index is to provide Cowen’s institutional clients with predictive pricing tools for a variety of industries, including partial loads (LTL), full load shipping (TL) and parcel shipping (focusing separately on express and ground).

The companies explained that by leveraging AFS’s access to freight data in various modes, coupled with the application of advanced analytics such as machine learning algorithms, they developed models that they believe they provide a complete picture of the depth and richness of the data. And they also pointed out that in addition to the large amount of historical data, they assess and select current macro- and microeconomic factors, which are fed into their historical models, which includes the most recent announcement from the GRI ( general rate increase) of a large parcel carrier. Additionally, Cowen and AFS noted that the Cowen / AFS Freight Index “provides a unique and comprehensive review of past performance and forecast outlook for the immediate coming quarter.”

In an interview with LMAFS Managing Director Tom Nightingale explained that the forward-looking nature of the report serves as a key differentiator of the report from others in the market.

“We’re actually forecasting where rates will go, not just where they’ve been,” he said. “We also break down LTL, TL, and parcel (into two subcategories), making it [the Freight Index] unique in this regard.

And from AFS’s perspective, Nightingale said that this version, in a way, marks the emergence of AFS after 39 years of what he called stealth mode.

“We’ve been around for 39 years, but so few people have heard of us,” he said. “We have $ 10 billion in freight audit payment data that we are now bringing to life. Our analytics team has done an incredible job, partnering with Cowen, and essentially built what we believe to be the industry’s first forward-looking AI (artificial intelligence) and ML (machine learning) freight index. It allows us to access some of the real depths of data we have and turn it into information and not just data.

Cowen and AFS have been actively working on the Freight Index for the past six months, over time they built the models and components of ML and then tested it against the Return Database of Cowen investors to help see correlations between indices and their tracking against individual companies within these verticals.

Nightingale added that with the Freight Index’s quarterly release, Cowen and AFS plan to wrap up the data from the previous quarter and use it to ‘power the machine’ and make the learnings a bit more robust each quarter, as. let things move forward. And he said it would typically be released early in the new quarter, predicting the rest of the quarter.

“Freight is a rapidly changing industry and the ability to track its performance has become a critical part of the investment process for our clients,” said Jason Seidl Cowen, senior analyst for air cargo and surface transportation, in a statement. “There is a great demand for tools to accurately monitor and forecast industry trends. The Cowen / AFS Freight Index is designed to fill this void. Using applied machine learning, data science, and annual transportation spending at AFS since 2018 to give a clear picture of the overall market, the Freight Index currently predicts, among other things, that we should see the rate market TL hit a new high in the fourth quarter of 2021, with LTL rates expected to rise at an even greater rate. “

The first edition of the Cowen / AFS Freight Index published the following:

  • a dramatic 15.2% annual increase in the composite truck loading rate per mile index in the fourth quarter;
  • a steady decrease in the average weight per LTL shipment since March 2021;
  • an express parcel per parcel previously up and a weight billed to the parcel down in the third quarter; and
  • Ground parcel freight index per parcel to hit record high in Q2 2021, among others

Click on here to read the full Cowen / AFS Freight Index.

About the Author

Jeff Berman, Group News Editor Jeff Berman is Group News Editor for Logistics management, Modern material handling, and Supply chain management review. Jeff works and lives in Cape Elizabeth, Maine where he covers all aspects of the supply chain, logistics, freight transportation and material handling industries on a daily basis. Contact Jeff Berman