Imagine having the ability to anticipate freight rate fluctuations months in advance—for business decision-makers, this would represent a crucial competitive advantage. This vision is now becoming reality as Wall Street investment firm Cowen Inc. partners with logistics provider AFS Logistics LLC to launch the innovative Cowen/AFS Freight Index, designed to provide investors and businesses with forward-looking pricing predictions in the volatile logistics market.
Cowen/AFS Freight Index: A Tool to Forecast the Future
New York-based Cowen Inc. and Louisiana-based third-party logistics (3PL) and freight audit payment firm AFS Logistics LLC recently announced their collaboration to develop the Cowen/AFS Freight Index. This new product aims to provide Cowen's institutional clients with predictive pricing tools across various transportation sectors, including less-than-truckload (LTL), truckload (TL), and parcel shipping (further divided into express and ground services).
The companies explained that by leveraging AFS's extensive freight data across transportation modes and applying advanced analytical techniques including machine learning algorithms, they've developed models that comprehensively demonstrate data depth and richness. Beyond substantial historical data, they're evaluating current macroeconomic and microeconomic factors incorporated into their historical models, including recent general rate increases (GRI) announced by major parcel carriers.
Cowen and AFS emphasize that the Cowen/AFS Freight Index offers "a uniquely comprehensive look back at past performance and forward-looking predictive outlook for upcoming quarters."
AFS CEO Tom Nightingale explained that the report's forward-looking nature distinguishes it from other market reports. "We're actually predicting where rates are going, not just how they've performed historically," he said. "We're also breaking down LTL, TL, and parcel (into two subcategories), so in that regard, [the freight index] is unique."
From AFS's perspective, Nightingale described this launch as marking the company's emergence from 39 years of operating in "stealth mode." He noted that while AFS has processed $10 billion in freight audit payment data, few were aware of their capabilities until now. The analytical team's collaboration with Cowen has created what they believe to be the industry's first forward-looking AI and machine learning freight index, transforming raw data into actionable intelligence.
The development process spanned six months of intensive work building models and machine learning components, which were then benchmarked against Cowen's investor returns database to understand correlations between the index and performance tracking within specific transportation verticals.
Nightingale added that with quarterly releases planned, Cowen and AFS will use completed quarter data to refine their machine learning models, strengthening predictive capabilities over time. The index will typically publish at the beginning of new quarters, forecasting trends for the remaining period.
Cowen's senior analyst for airfreight and surface transportation, Jason Seidl, stated: "Freight is a rapidly changing industry, and the ability to track its performance has become a critical component of our clients' investment process. The market strongly demands tools to accurately monitor and forecast industry trends—the Cowen/AFS Freight Index aims to fill this gap."
Key Findings from the Inaugural Cowen/AFS Freight Index
The first edition of the Cowen/AFS Freight Index revealed several significant findings:
- Composite truckload rates per mile surged 15.2% in Q4
- Average LTL shipment weights have steadily declined since March 2021
- Previously rising express parcel rates per package and billed weights showed Q3 declines
- Ground parcel rates per package are projected to reach record highs in Q2 2021
Technology and Insights Behind the Index
The launch of the Cowen/AFS Freight Index represents a new phase in data analytics applications for logistics. Rather than simply aggregating historical data, the index employs advanced machine learning algorithms to comprehensively analyze factors influencing freight pricing—including macroeconomic indicators, industry-specific data, and carrier pricing strategies—to forecast future market trends.
These predictive models enable Cowen and AFS to provide investors and businesses with more accurate, timely market intelligence for informed decision-making. Companies can leverage the index to optimize supply chain management, reduce transportation costs, and improve profitability, while investors gain valuable tools to assess logistics firms' investment potential and identify market opportunities.
AFS: From Background to Spotlight
For AFS Logistics, the index launch marks a significant transition from operating behind the scenes to taking center stage. While the 39-year-old logistics specialist has focused on freight audit and payment services, its low-profile strategy meant few recognized its extensive data capabilities.
The Cowen partnership now transforms AFS's accumulated freight data into valuable market intelligence for broader clientele, enhancing brand recognition while opening new development pathways.
The Future of Freight: Data-Driven Decisions
The Cowen/AFS Freight Index signals freight markets' evolution toward data-driven decision making. As logistics competition intensifies, businesses increasingly require analytical tools to optimize operations, improve efficiency, and control costs. Tools like the Cowen/AFS Freight Index will provide critical decision-making support.
This development will likely spur more companies to enter logistics data analytics, introducing diverse market analysis tools that drive industry-wide innovation while presenting both opportunities and challenges for businesses.