Methodology

Methodology – Freight Cost Analysis

The Canadian General Freight Index is produced monthly and tracks changes in market rates for general freight movements in Canada. Drawn from the largest database of its kind in Canada, the CGFI includes information on Truckload and Less-Than-Truckload rates for both Domestic and Trans-Border movements. The index is available both with and without Fuel Surcharges included in the rates. Also provided are the average percentages paid for Fuel Surcharges for the movements sampled.

CGFI Methodology

Each month, an unidentified sample of over-the-road freight transactions is drawn from Nulogx’s database of recent freight transactions. The sample is analyzed to ensure that no one shipper is over-represented and that all data passes quality checks and tests for reasonableness.

A multi-variable regression analysis is used to understand the complex relationship between Costs, Weights, Miles and Geographies. Other factors impacting overall transportation costs such as shipment weights and distances are filtered from the analysis so that the impact of price changes can be isolated and reported. Once completed, the results from several sub-categories are combined into one overall Index number.

The CGFI Methodology was developed with the assistance of Dr. Alan L. Saipe, President, Supply Chain Surveys, Inc., a long-time analyst and observer of the transportation and logistics industry.

Enhanced Methodology (September 1, 2010)

Consistent with the goal of continuously improving the accuracy and value of the CGFI data, Nulogx has developed and released a new and improved version of the CGFI. With the assistance of Dr. Alan Saipe, Nulogx was able to improve the methodology for deriving the monthly freight index amounts so that the results have even higher statistical validity. There are no concerns with the accuracy of previously released figures, and Nulogx is even more confident that future results will be more accurate than previously possible.

Commencing the with publication of June 2010 results, the new process will be used exclusively. All prior results have been recalculated using the improved process, and restated on the publically available charts. Please note that while there are minor monthly variations, both processes illustrate the same freight cost behaviour over the time period.

Another modification is that only the 4 Month Moving Average will be shown on the public charts. This is in an attempt to increase the focus on price trends as opposed to month to month volatility that may be due to seasonal fluctuations in supply and demand or service requirements.

In addition, based on feedback received from users, all results have been recalibrated using a base amount of 1,000 for January 2008 so that changes over time will be easier to track.

Limitations of the CGFI

It is important to note that CGFI represents changes in freight costs for the aggregate shipping patterns of its customer base, which may or may not be the same for all shippers. Also the CGFI does not currently reflect the rate differential associated with specialized transportation services. However, it is expected that the increase or decrease in the cost of these services is aligned with overall changes in transportation costs.

For more information on how your company’s costs compare to the overall Canadian General Freight Index, please contact Nulogx.

About Nulogx

The CGFI is powered by Nulogx Inc, a leading Transportation Management Solutions company that provides information and services to strategically manage the transportation process and reduce costs. Nulogx’s unique approach of combining Managed Services with a best in class Online TMS Application and the largest Freight Audit and Payment operation in Canada allows us to offer exceptional value to customers. As a processor of over $750M per year in freight transactions and representing nearly 1000 carriers, Nulogx is positioned to offer both strategic and tactical solutions to its customers. The creation of the CGFI is one example of these capabilities.

For more information on how Nulogx can assist your company in managing your transportation needs,
please visit www.nulogx.com.