TransVix and DAT Solutions announced the formation of their exclusive strategic alliance to create the “first and only” Trucking Futures Exchange which will list and trade contracts based on trucking line haul rates. The TransVix Exchange will list contracts that are financially settled using DAT’s data for major freight lanes in the U.S.
TransVix is focused on addressing volatility in line haul freight rates, where spot prices can swing as high as 40% in a single week on some major lanes. Volatility of truck capacity can be driven by a host of market conditions such as weather, seasonality, regulations and macroeconomics. Brokers, carriers, and shippers all face the same challenges when it comes to volatile spot rates and are exposed to market conditions without viable hedging options to manage price risk.
TransVix said it is partnering with DAT to provide participants much needed risk-management tools to hedge their freight lane exposure. TransVix noted it has identified the most travelled lanes in the market and found major intra-week and intra-month volatility. DAT data will be used to help develop TransVix trucking futures, which will allow market participants to normalize these price fluctuations.
“DAT is the truckload pricing index standard for the North American trucking market, and it makes perfect sense for us to partner with them” said Craig Fuller, TransVix CEO. “We did an exhaustive search into the various Index providers by speaking with over 200 C-Level executives across the trucking marketplace and found DAT to be the most trusted and reliable provider of spot market data. In addition, we have extensively analyzed selected aggregated data sets and validated that the assessments closely mirror the overall direction and volatility of the underlying market.”
"We have observed supply and demand fluctuations and periods of significant truckload capacity constraint over a period of years, and recognize the financial risk that our customers face,” said Don Thornton, senior vice president of sales & marketing at DAT. “We are impressed with the TransVix team, their depth of experience and knowledge of the trucking marketplace and capital markets. Together we are looking forward to building a supplemental capability for transportation professionals to manage rate volatility risk with no interruption to the way they do business today.”