Cowen Research and AFS Logistics Launch Index to Track and Predict Pricing Within the Air Freight & Surface Transportation Sector

Cowen Inc. | October 12, 2021

Cowen Inc. (NASDAQ:COWN) (“Cowen” or the “Company”), and AFS Logistics, LLC (“AFS”), today announced the launch of the Cowen/AFS Freight Index (“Freight Index”). The Freight Index will serve to provide Cowen’s institutional clients with predictive pricing tools for multiple sectors within the freight industry, on a quarterly basis. The Freight Index will provide a performance snapshot of less-than-truckload shipping (LTL), full truckload shipping (TL), and parcel shipping (both express and ground, separately). This data will be featured in Cowen’s market-leading air freight and surface transportation equity research. Jason Seidl, Cowen’s Senior Analyst for Airfreight & Surface Transportation, is leading the initiative. 

As one of the most experienced 3PLs and largest freight audit and payment companies in the industry, AFS holds unique access to freight data across transportation modes. Applying advanced analytics including machine learning algorithms, AFS and Cowen developed models that unveil the depth and richness of the data. In addition to the massive historical data, current macro- and micro-economic factors are carefully evaluated, selected, and built into predictive models, including the most recent General Rate Increase (GRI) announcement from a major parcel carrier. The resulting Cowen/AFS Freight Index offers a unique and comprehensive view of both past performance and the forecasted outlook for the immediate future quarter.

“Freight is a rapidly changing industry and the ability to track its performance has become a critical component of the investment process for our clients. There is strong demand for tools to accurately monitor and predict sector trends. The Cowen/AFS Freight Index is designed to fill that void,” said Jason Seidl. “Using applied machine learning, data science and the annual transportation spend at AFS since 2018 to give a strong picture of the overall market, the Freight Index currently forecasts, among other things, that we should see the TL rate market reach a new high in the fourth quarter of 2021, with LTL rates expected to grow at an even larger clip.”

“Our clients are leveraging data to improve efficiency in their logistics networks. Our intent with this groundbreaking Cowen/AFS Freight Index is to provide them with insights to make those data-driven networks even more effective,” said Tom Nightingale, Chief Executive Officer of AFS. “We’re bringing more than just raw, historical data to the market. We’re applying advanced, predictive analytics and unlocking the full information behind the data to deliver highly relevant insights that have real value for our clients.”

Key Implications of the Cowen/AFS Freight Index from the Inaugural Report by Jason Seidl:

TL: We expect TL rate per mile to continue growing through the end of 2021, reaching a high for our index of 24.2% in 4Q21 and up from 21.0% in 3Q21, off the January 2018 AFS baseline. On a year-over-year basis, the Freight Index suggests an increase of ~15% in 4Q, a slight sequential moderation. We found a correlation between the sequential change in the baseline of the TL Freight Index and sequential change in revenue per truck. Revenue per truck also offers historical insights into (and correlates to) TL stock performance (TL stock performance generally leads revenue per truck metrics by about one quarter). Thus, we view this as a positive for the TL group.

LTL: The Cowen/AFS LTL Freight Index suggests that LTL rate per pound should continue to grow sequentially in 4Q21 at 32.3%, up 2.1% sequentially, off the January 2018 AFS baseline. On a year-over-year basis, the data suggests ~16% growth, a sequential increase in 4Q (noting a sequential step down from November to December). We found a correlation between the sequential change in the LTL Freight Index baseline and sequential change in revenue per hundredweight. LTL stock performance also historically leads (and correlates with) the revenue per hundredweight metric LTL companies provide by roughly one quarter. Therefore, we view the positive sequential trends and new highs for the LTL Freight Index as a positive for the LTL group.

Parcel/Express Parcel: The Cowen/AFS Parcel Freight Index suggests that ground parcel rates per package will increase 16.9% in 4Q21, up 2.1% sequentially, off the January 2018 AFS baseline. On a year-over-year basis, the data suggest ~9% growth. For parcel express, the Cowen/AFS Parcel Express Freight Index suggest that express rates per package will decline 10.9% in 4Q21, compared to -8.9% in 3Q, off the 2018 AFS baseline. On a year-over-year basis, the data suggest ~13% growth. We found a correlation between certain large parcel carrier KPIs and the Parcel Freight Index.

Macro: We have found the year-over-year AFS data (and the TL Freight Index in particular) to correlate well with the year-over-year change in the Purchasing Managers’ Index. This may provide investors with perspective on potential movements of the PMI. The TL Freight Index, which tracks truckload rates per mile, indicates how much carriers are charging shippers to move TL freight. A strong demand environment (which is what we are seeing play out in the market now), leads to elevated rates (without considering the supply side), which implies a strong manufacturing index.

Other Takeaways: Since March 2021, AFS has seen the average weight per shipment within LTL steadily decrease, likely due to the ongoing shift to e-commerce. Despite this, rates have still increased, with labor shortages and other capacity restraints contributing. Carriers have been able to implement steep rate increases on shippers and have been even more aggressive on surcharges to move undesirable freight.

About Jason Seidl
Jason Seidl joined Cowen in 2013 as part of the Company’s acquisition of Dahlman Rose and has been covering the air freight & surface transportation sector for over 20 years. He has been recognized for his stock picking and EPS accuracy in numerous third-party polls and surveys, most recently the 2020 TipRanks Analyst Awards. He is currently ranked 10th across all sectors for stock picking by TipRanks. Before his Wall Street career, Mr. Seidl spent four years working in the trucking/parcel transportation industry. He has a Bachelor of Science degree in transportation distribution management from Syracuse University and a Master of Business Administration with a concentration in Finance from Rutgers University. He is a member of the executive advisory board for Syracuse University’s School of Supply Chain Management; past President of the board of directors for the North East Association of Rail Shippers; and a contributing editor for Railway Age.

About Cowen Research
Cowen’s research department has 58 senior analysts covering 930 securities across multiple sectors including industrials, consumer, energy, health care, technology, media & telecom, and cross-asset, as well as a deep Washington policy team.

About Cowen Inc.
Cowen Inc. (“Cowen” or the “Company”) is a diversified financial services firm that operates through two business segments: a broker dealer and an investment management division. The Company’s broker dealer division offers investment banking services, equity and credit research, sales and trading, prime brokerage, global clearing and commission management services. Cowen’s investment management segment offers actively managed alternative investment products. Cowen Inc. focuses on delivering value-added capabilities to our clients in order to help them outperform. Founded in 1918, the firm is headquartered in New York and has offices worldwide. Learn more at

About AFS
AFS Logistics helps more than 1,700 companies across more than 35 countries drive sustained savings, while turning their supply chains into competitive, customer-centric differentiators. The AFS portfolio of services features Audit, Parcel, LTL and Transportation Management, which includes Freight Brokerage and Freight Forwarding. Founded in 1982 and employing a team of more than 350 logistics teammates in seven major locations across the U.S., AFS is regularly part of the Inc. 5000 list of fastest growing companies.


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