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September 16, 2022

When Real Data Becomes Fake News

Hank Newman, CEO/Founder

Hank Newman, CEO/Founder

When real data becomes fake news, what do you do?  If I say blue is green, then you must accept that, or you’re the problem, right???

Data, data, data – everyone is preaching the value of hard data – I certainly have been for decades now.  Data is fact, eliminates emotions, and can be trusted implicitly.  Data not only tells you where you’ve been but potentially where you are headed.

Unless it’s wrong. Well obviously, BAD data is wrong (and there is plenty of bad data – just look at a Bill of Lading once in a while), but what happens when reliable data becomes misleading?  Is it fake?  Has it been deliberately massaged to push another narrative or have the inputs become irrelevant?

Many of us data junkies learned long ago that the same data set can be manipulated to tell whatever story you want it to (for the most part).  Just change time frames, scales, etc.  Look at the charts below – it’s all the same data.

Evaluate and Predict

Many of you know I have long followed certain macro data trends related to freight — the Cass Index, the PPIs, DAT Trendlines, etc. We’ve also sprinkled in our own proprietary data that cannot be found anywhere else — like actual LTL carrier performance. (SPOILER ALERT — NEW RECONEX PROPRIETARY DATA COMING!) The point of all of this is to provide a baseline for many of you to evaluate and predict future trends (hahaha – good luck!).

SPOILER ALERT — NEW RECONEX PROPRIETARY DATA COMING!

But what happens when reliable sources become questionable? Hmm — we don’t see that anywhere else these days, do we? What do you do about it? Well, you don’t become a sheep, that’s for damn sure. You do your own thing, your own research, and come up with your own conclusions! You don’t just take someone else’s opinion as fact. Yeah — and that goes for me, too, so call out BS if you see it. That’s what healthy debate is supposed to be all about — it’s not supposed to get canceled!  

My focus here is the Cass Freight Shipment Index that was just released. I have found these freight indices to be pretty valuable for a long time, but I’ve recently been questioning the higher shipment levels. They are showing August shipment totals were up significantly. I’m not buying it. I don’t see it, and I believe it’s flawed. Something is off, and maybe it’s relevant to certain shippers, but something is wrong.

Not Making Sense

Then, to make matters worse, a possible explanation was thrown out that doesn’t make any sense at all. They attributed the surge in August shipments partly to the influence of shippers moving from the spot market to the contract market. What??? Spot rates have dropped dramatically relative to contract rates (see below), so who in their right mind would move opposite and pay more? Why is Freightwaves SONAR outbound tender reject index so low? If you’re inquisitive enough, it may imply that the Cass Index uses data that heavily favors only a specific sector. IDK — I may be wrong, but it’s what I’m seeing. That’s not necessarily Cass’ fault — maybe the inputs just need to be revisited. Charts below – you be the judge.

Here’s what it tells me — the index, like many others, is based on data that really may not be at all relevant to you! What’s your trend? Your freight and cost profile? Who really cares what the 800-LB gorilla is doing? Maybe the gorilla needs to influence your behavior, and maybe you need to react to the waves they create, but THINK! Investigate and analyze your own data to make decisions.

Reconex Trend Package

I’ve been seeking the Holy Grail of unique freight indices for over 30 years. I am banging my head against the wall to find the perfectly unique predictive data set that means something to shippers like you. But most of that time, I’m trying to align it with some age-old index to validate my results.

Now I’m on a mission to accomplish a unique trend package using all the collective data we have — which is FAR more relevant to you as a shipper than the behemoth that is apparently feeding other sources. We are the attack swift boats, the Apache attack helicopters!  

Reconex TMS has all of that! Focus on your data and let our client services team help. I’ll refine my updates to focus more on our internal collective data, and maybe that will help us all more. I won’t abandon the other indices, but I’ll undoubtedly be questioning them more and looking for alternative sources of TRUTH.

Below is the RELEASE OF THE NEW RECONEX LTL SPI (Shipper Price Index)! Been working and trying to refine this for far too long, so it’s time, baby! Yes, it will continue to be continuously improved, but no more waiting. Please don’t cancel me! Wait — I couldn’t care less, so go ahead if you want to — LOL! BTW — it’s telling me that LTL pricing is going to cool considerably, meaning there will be some opportunities to decrease costs. That’s contrarian, of course. And, to be even more unique and cutting edge, Reconex LTL SPI will be broken down into additional key elements – LTL base pricing, LTL FSC, and LTL Accessorials.

#NOTASHEEP

Below is the Cass Freight Index and the explanations for why August may be so high.  It doesn’t add up. Below that is the spot TL market vs. contract. Does the Cass Freight Index completely dismiss a whole segment of the market?  Maybe that’s helpful to Goliath, but is it to you?

And, why are carriers accepting more tenders if volumes are so strong?

Reconex News

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