Do you know what freight index is? Measuring the domestic freight is a serious task that affects and determines the flow of the economy of each state. Knowing the freight index on sea, land, and air is crucial for every state and system.

What is Freight Index?

By definition, the freight index is a data average of weight for trucking, waterborne, freight rail, air freight, and pipeline. It is a measurement of aggregate deliveries of freight. Formed as data by the Bureau of Transportation Statistics Transportation Services Index (BTS TSI), the Cass Freight Index, and the Dow Transportation Index, the freight index is used to track the supply chain indicators.

Thanks to online technology’s Impact of shippin and industry numerous companies today send data that allows the nation to collect freight bills from the shipping clients, as well as provide estimates of freight cost for shipping and logistics.

These three economic indicators inform predictions and analyses about the health of the economy within the state. They reflect the transportation providers’ responses to the demands of the economy in regards to moving passengers or freight.

In order to produce higher quality and bigger quantities of goods to deliver to customers, various industries demand freight transportation services for raw material, finished products, and intermediate goods. This goes across the entire supply chain. As a result, transportation is considered a great indicator of economic decline or growth.

Freight Index vs. Passenger Index vs. Combined Index

Some people mistake the freight index with passenger and combined index. The first refers to the average data for waterborne, trucking, air freight, pipeline freight, and freight rail. This does not include the data for weighted average for passenger transit, aviation, or passenger rail. The latter falls under the passenger index, which is similarly calculated.

Lastly, the combined index refers to an average of both the passenger and freight index. Once the data on both is collected, the weighted average of the two is calculated to provide an average, statistically accurate number.

Transportation Services Index

Also referred to as the BTS TSI, the Transportation Services Index represents the volume of passengers and freight being moved. BTS creates three indexes: one for passengers, one for freight, and a combined freight index. The three indexes produced by BTS incorporate physical volumes’ monthly data i.e. the ton miles being shipped for the freight index report and the ton miles being travelled for the passenger index report.

To create this report, data is collected only from domestic transportation for hire that provides transportation services for a fee to external customers. In order to create these reports, BTS weights and adjusts, as well as combines the monthly data. They weigh the series based on the dollar contribution or the economic value of the transportation mode for-hire to the economy. As a result, an index is provided that gives insight into the transportation demands within the country, as well as the transportation activity.