The lane consistency metric in the DAT iQ Benchmark platform provides insights into the frequency of freight movement across specific lanes. This metric helps users understand their position relative to the market and make informed decisions based on lane activity.
Where to Find the Lane Consistency Metric
The lane consistency metric is available in the following locations within the platform:
- Cost by Attributes Dropdown:Select "12 Month Lane Consistency" from the available options.
- Right-Side Filter Panel:Use the filter to narrow down results based on lane consistency.
Calculation of Lane Consistency
Lane consistency is determined by analyzing data based on the following factors:
- Origin ZIP Code
- Destination ZIP Code
- Equipment Type
A pivot table is created using these factors, and the number of weeks with activity over the past 12 months is counted. The results are categorized into the following bins:
- 1-3 weeks: Rare lanes
- 26-52 weeks: Frequent lanes
- No activity: Inactive lanes in the last 12 months.
Visualizing Lane Consistency Data
Users can view lane consistency data in a bubble chart format:
- Larger bubbles on the rightindicate freight on consistent lanes.
Smaller bubbles on the left represent rare lanes.
Most shippers will observe a pattern with a larger proportion of their freight on consistent lanes.
Benefits of Lane Consistency for Network Management
- Cost Reduction: Consistent lanes provide leverage to negotiate lower costs with carriers and brokers.
- Spot Freight Procurement: Rare lanes are more susceptible to spot market fluctuations and may require different procurement strategies.
Key Use Cases for Lane Consistency
Internal Communication:
Demonstrate how consistent lanes provide better positioning compared to rare lanes.
In a tight market, consistent lanes are more advantageous, while rare lanes become costlier.
Inflation and Benchmark Positioning:
Use the lane consistency filter to assess inflation trends.
Show senior management how consistent lanes experience less inflation compared to rare lanes.
Example: Rare lanes may experience inflation exceeding 5%, while consistent lanes show lower inflation rates.
Spot Market Activity:
Track the mix of spot freight on inconsistent lanes.
Adjust procurement strategies to mitigate risk on rare lanes.
Bid Strategy:
For annual RFPs, focus on frequent lanes.
For spot strategies, provide information on rare lanes to brokers for better capacity planning.
Seasonal bids may be better suited for lanes with mid-range consistency (4-12 weeks or 13-25 weeks).
By utilizing the lane consistency metric, users can optimize their freight strategy, improve cost efficiency, and enhance overall network performance.