Logistics is inherently unpredictable, and no tool or algorithm can foresee every disruption in the supply chain. However, WebCargo by Freightos hopes to have developed a tool to help airlines and forwarders stay ahead of the curve by predicting whether rates on a given lane are expected to rise or fall.
While it might seem simple at first glance, something anyone who’s booked hotels or flights online would recognise, the Volatility Index is powered by a sophisticated platform that integrates multiple algorithms and data analysis techniques.
It uses current market trends and historical data as its foundation, continuously investing in improvements, incorporating machine learning to refine its predictions over time.
“Our goal is to roll it out to all WebCargo users, helping them manage freight rates, bookings, and quotes more efficiently,”’ Joe Quijano, Vice President of Product at WebCargo, announced.
“Currently, the index is in beta testing and available to a select group of clients across all routes and regions. We plan to refine its features based on real-world feedback.
“Our Index gathers actionable insights by analysing vast amounts of data from various sources, all aggregated and anonymised for privacy.
“A key component is the dynamic rates from WebCargo, updated nearly every minute.
“With over four years of data and millions of data points, we offer a comprehensive view of market trends over time. This extensive data collection enhances the index’s reliability and sharpens its forecasting ability.”
Dual benefits
Freight forwarders play a pivotal role as intermediaries between airlines and shippers, and they face challenges from fluctuating prices and thin profit margins.
The index equips them with real-time data and predictive analytics to better anticipate market changes and adjust their strategies accordingly.
This means they can secure competitive prices quickly, advise customers about potential price increases, or capitalise on falling prices.
“Ultimately, this tool allows forwarders to manage risks more effectively, enhance their procurement processes, and improve overall market efficiency,” Quijano explained.
The index is also designed as a valuable tool for airlines, providing insights into industry-wide pricing and procurement trends.
“Like our WebCargo Airlines and Terminal market intelligence tools, it helps airlines and forwarders make better informed decisions about pricing, capacity management, and resource allocation,” he continued.
“This not only optimises revenue and customer satisfaction but also enhances operational alignment with market conditions. In a highly competitive market, such strategic insights are crucial.”
