What is a transport price index?
Ever heard of a transport price index? Maybe a freight price index? Well, measuring the cost of transport is a serious task that affects and determines the flow of the economy of a company. Knowing the transport price index for sea, land, and air transport is crucial for every company to ensure a high ROI and gain a competitive advantage in negotiations with suppliers.
The definition of a transport price index
Transport price index, at times also referred to as freight index, is a measurement of relative price changes. It is according to the Britannica encyclopaedia “a measure of relative price changes, consisting of a series of numbers arranged so that a comparison between the values for any two periods will show the average change in prices between periods or the average difference in prices between places.”
In other words, a transport pride index is a chart showing the price development for transportation and freight.
In order to produce higher quality and bigger quantities of goods to deliver to customers, various industries demand freight transportation services for raw materials, finished products, as well as intermediate goods. This goes across the entire supply chain, from beginning to end. As a result, transportation is considered one of the most important indicators of economic decline or growth.
Freight vs. Passenger vs. Combined index
A common mistake is getting freight, passenger, and combined index mixed up. The first refers to the price data for waterborne, trucking, air freight, and freight rail. This does not include the data för passenger transit, aviation, or passenger rail.
The combined index is exactly as it sounds, a combination of the two.
How does a transportation price index work?
Airplane, rail, boat, or road transport price index provide great worth to companies who seek to lower how much they pay for transportation. They are often utilized in negotiations with suppliers, acting as a base to argue from. In the end, knowledge is power, and data is knowledge. With insight into current market prices using a transport price index, not only do you gain a better understanding of how your current costs compare to the market, you also gain the data to back up your claims for cost reductions.
Gain access to all transportation price index you need
Thanks to our platforms, Prognos Online and Tailored, we’re able to provide companies with statistically accurate representation of the market price of all types of transportation – everything you need to gain an edge in your negotiations with suppliers.
With our transport price index, you gain perfect insight into your current transportation costs and can use them as base to identify potential cost savings. Using our platforms, you get access to an advanced transport index calculator, allowing you to bring up whatever transport price index you need.
Contact us to for a demonstration of our platforms and for more information about how Prognos can support your business.