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April 27 2020

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www.joc.com Cover Story 10 The Journal of Commerce | April 27 2020 THE CORONAVIRUS DISEASE 2019 (COVID-19) is bringing new urgency to the development of freight price forecasting tools that can help ship- pers quickly adapt to fast-changing market conditions and manage risk that has skyrocketed with the advance of the global pandemic. Shippers are turning to tech- nology for greater market clarity as uncertainty deepens, but businesses trying to figure out how high or low truck pricing will be six months to a year from now are finding forecasts tougher than ever to nail down. Even forecasts from the beginning of March may now seem unrealistic as the number of COVID-19 cases and deaths in the United States rises and measures aimed at slowing the spread send the US economy into recession. Primarily, shippers are looking for projections that will help them avoid a budget bonfire similar to the one that scorched them two years ago, when a spike in economic activity collided with tightening truck capac - ity. That clash pushed truckload rates up by double-digit percentages in late 2017 and early 2018, superseding pre- viously negotiated rates. "What shippers really want to do is ensure they're paying a fair price," said Drew McElroy, chairman of Transfix, a digital truckload mar- ketplace that uses its own predictive pricing capability to guarantee ship- pers' spot rates up to one year out. He said the Transfix platform's data is both expanding and becoming much more granular, lane by lane, allowing for more detailed contract bids. "If you can show them how your forecast reflects the way pricing has evolved in a freight lane over the last six months, all of a sudden the classic argument over cutting 10 cents a mile goes away," McElroy said. "You start making the pricing conversation about facts instead of emotion." But can any pricing forecast survive the surprise pummeling delivered by COVID-19? Forecasters say their predictions will obviously change, but historical trends will not. They must carefully match and analyze current and historical data and fine-tune models and predic- tions constantly. That's as true, they say, for a truckload pricing outlook Second-half sight

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