Cowen Research and AFS Logistics Launch Index to Track and Forecast Prices in Air Freight and Surface Transportation Industry
NEW YORK and SHREVEPORT, Louisiana, October 11, 2021 (GLOBE NEWSWIRE) – Cowen Inc. (NASDAQ: COWN) (“Cowen” or the “Company”), and AFS Logistics, LLC (“AFS”), today a announced the launch of the Cowen / AFS Freight Index (“Freight Index”). The Freight Index will be used to provide Cowen’s institutional clients with predictive pricing tools for several sectors of the freight industry on a quarterly basis. The Freight Index will provide an overview of the performance of Partial Lot Shipping (LTL), Full Truck Shipping (TL), and Package Shipping (Express and Ground, separately). This data will be presented in the market leading Cowen’s air cargo and surface transportation equity research. Jason Seidl, Cowen’s senior analyst for air cargo and surface transportation, is leading the initiative.
As one of the most experienced 3PLs and largest freight audit and payment companies in the industry, AFS has single access to freight data for all modes of transport. By applying advanced analytics, including machine learning algorithms, AFS and Cowen have developed models that reveal the depth and richness of data. In addition to massive historical data, current macro- and micro-economic factors are carefully assessed, selected, and integrated into predictive models, including the most recent General Rate Increase (GRI) announcement from a major parcel carrier. . The resulting Cowen / AFS Freight Index provides a unique and comprehensive view of both past performance and forecast outlook for the immediate coming quarter.
“Freight is a rapidly changing industry and the ability to track its performance has become an essential part of our clients’ investment process. 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, ”said Jason Seidl. “Using applied machine learning, data science, and annual transportation spending at AFS since 2018 to provide a clear picture of the overall market, the Freight Index currently predicts, among other things, that we should see the market for TL rates hit a new high in the fourth quarter of 2021, with LTL rates expected to increase at an even greater rate. “
“Our customers use data to improve the efficiency of their logistics networks. Our intention with this revolutionary Cowen / AFS Freight Index is to provide them with information to make these data-driven networks even more efficient, ”said Tom Nightingale, CEO of AFS. “We bring more than just raw historical data to the market. We apply advanced predictive analytics and unlock all the information behind the data to deliver highly relevant insights that are of real value to our customers.
Key Implications of the Cowen / AFS Freight Index from Jason Seidl’s Inaugural Report:
TL: We expect the TL per mile rate to continue to grow through the end of 2021, peaking for our index of 24.2% in 4Q21 and 21.0% in 3Q21, versus the AFS benchmark. from January 2018. Year over year, the freight index suggests an increase of around 15% in the fourth quarter, a slight moderation sequentially. We found a correlation between the sequential change in the TL freight index baseline and the sequential change in revenue per truck. Revenue per truck also offers historical information on (and is correlated with) TL stock performance (TL stock performance is typically about a quarter ahead of revenue per truck). Thus, we see this as a positive element for the TL group.
LTL: The Cowen / AFS LTL Freight Index suggests that the LTL per pound rate should continue to grow sequentially in 4Q21 at 32.3%, up 2.1% sequentially, from the AFS benchmark in January 2018. Year over year, data suggests growth of around 16%, a sequential increase in 4Q (noting a sequential decline from November to December). We found a correlation between the sequential change in the baseline of the LTL freight index and the sequential change in income per hundredweight. The performance of LTL stocks also historically leads (and correlates with) the revenue per hundredweight of metric LTL companies provides about a quarter. Therefore, we view the positive sequential trends and new highs in the LTL Freight Index as positive for the LTL group.
Parcel / Express Parcel: The Cowen / AFS Parcel Freight Index suggests ground parcel rates per parcel will increase 16.9% in 4Q21, up 2.1% sequentially, from the AFS benchmark in January 2018. Year-over-year data suggests growth of around 9%. For express parcels, the Cowen / AFS Parcel Express Freight index suggests that express rates per parcel will decrease by 10.9% in 4Q21, against -8.9% in 3Q, compared to the AFS 2018 benchmark. year over year, the data suggests growth of around 13%. We have found a correlation between some KPIs of large parcel carriers and the Parcel Freight Index.
Macro: We found that the AFS year-over-year data (and the TL Freight Index in particular) correlated well with the year-over-year change in the Managers’ Index. ‘purchase. This can give investors a perspective on potential movements in the PMI. The TL Freight Index, which tracks truck loading rates per mile, shows how much carriers charge shippers to move TL freight. A high demand environment (what we are currently seeing in the market) leads to high rates (ignoring supply), implying a strong manufacturing index.
Other takeaways: Since March 2021, AFS has seen the average weight per shipment in LTLs decline steadily, likely due to the ongoing transition to e-commerce. Despite this, rates rose further, due to labor shortages and other capacity constraints. Carriers have been able to implement steep rate increases on shippers and have been even more aggressive on surcharges to move junk cargo.
For more information and to read the Cowen / AFS Freight Index, please visit https://afs.net/cowen-afs-predictive-freight-index.
About Jason Seidl
Jason Seidl joined Cowen in 2013 as part of the company’s acquisition of Dahlman Rose and has covered the air cargo and surface transportation industry for over 20 years. He has been recognized for his stock selection and the accuracy of his PSE in numerous polls and third-party surveys, most recently the TipRanks Analyst Awards 2020. He is currently ranked 10e in all sectors for stock selection by TipRanks. Prior to his Wall Street career, Mr. Seidl worked for four years in the trucking and parcel industry. He holds a Bachelor of Science in Transportation Distribution Management from Syracuse University and a Masters of Business Administration with a concentration in Finance from Rutgers University. He is a member of the Executive Advisory Board of the School of Supply Chain Management at Syracuse University; past chairman of the board of directors of the North East Association of Rail Shippers; and a collaborating editor for Age of the railway.
About Cowen Research
Cowen’s research department has 58 senior analysts spanning 930 stocks across multiple industries, including Industrials, Consumer, Energy, Healthcare, Technology, Media and Telecommunications, and Cross-Assets, as well as a Washington policy team.
About Cowen Inc.
Cowen Inc. (“Cowen” or the “Company”) is a diversified financial services company that operates through two lines of business: a brokerage and an investment management division. The Company’s brokers and brokers division provides investment banking, equity and credit research, sales and transactions, premier brokerage, global clearing and commission management services. Cowen’s investment management segment offers actively managed alternative investment products. Cowen Inc. is focused on providing value-added capabilities to our customers to help them outperform. Founded in 1918, the company is headquartered in New York City and has offices around the world. Learn more about Cowen.com.
AFS Logistics helps more than 1,700 companies in more than 35 countries achieve sustainable savings, while transforming their supply chains into competitive, customer-centric differentiators. AFS’s service portfolio includes audit, package management, LTLs and transport, which includes freight brokerage and freight forwarding. Founded in 1982 and employing a team of more than 350 logistics teammates at seven major locations in the United States, AFS is consistently named to Inc. 5000’s list of fastest growing companies. To learn more, visit www.afs.net.
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