Online tool gives a peek at freight pricing trends
Posted: August 1, 2014
MISSISSAUGA, Ont. — There’s no question: It pays to keep tabs on your competition.
That process just got a heck of a lot easier, with the appearance of the new Canadian Freight Index (CGFI), courtesy of a company called Nulogx – a veteran shipping industry consultancy Transportation-Management solutions provider based in Mississauga, Ont.
Scott Irvine, Nulogx’s vice-president of business development, says monitoring price changes should enable carriers as well as shippers to remain competitive.
“I don’t know about you, but with the current economic climate there has been a lot of attention focused on the Dow-Jones and the TSE and somebody said wouldn’t it be great if there were an index for freight costs?”
Hence, the CFGI, which went live this week. Check out www.cgfi.ca
The morphing database is based on more than $750 million per year in transportation transactions that Nulogx customers engage in and it’s available, for free, to anybody who logs in. The information will be updated monthly.
And the first news in from the new CGFI: Prices have dropped more than 13 percent since July 2008, and 7.8 percent in the first five months of 2009.
However, absent fuel surcharges, the index for base freight costs has increased one percent since July 2008 and 0.7 percent in the first five months of 2009.
The CGFI was developed with the assistance of Dr. Alan Saipe, president of Supply Chain Surveys, Inc.
Saipe has been a long-time analyst and observer of the transportation and logistics industry.
Says Saipe, "Nulogx has been able to leverage its extensive database of more than two million annual transactions to develop a unique insight into Canada’s freight market.
"In the first seven months of 2008, general freight costs rose significantly, driven up by increases in both freight rates and fuel surcharges. Then the realities of the slowing economy in both Canada and the US began to take over.
“The result brought total freight costs down by 13.4 percent from their peak in July 2008," continued Saipe.
According to Irvine, carriers will be in a position to benefit from the CGFI when prices are in an upward trajectory. Alas, when they’re going downward, it’ll be shippers who hold the wild cards. If general market prices are increasing and a carrier’s rates are not, it provides an indication that maybe they are not getting all the gains that are available to them.
"On the other hand, if market rates are decreasing," he says. "I think we can expect shippers to become more demanding as well.
“Whatever the timing, I think it’ll always be advantageous to know as much about the competition as possible."