Context: In its bid to bring transparency in the road-freight marketplace, Gurgaon-based tech-enabled logistics start-up Rivigo has launched National Freight Index (NFI) that will provide live freight rates for different lanes and vehicles across the country.

About NFI:

• This first-of-its-kind barometer of the road freight market in India is based on a Rivigo rate exchange.
• NFI gives a live spot rate on over 7 million lane and vehicle type combinations in the country.
• NFI offers an aggregated picture of both live rates and historical trends of spot price movements in the road freight industry.
• The index is represented in two main forms: In terms of actual freight rates condensed to INR per ton-km and in terms of relative movement with respect to a base month.
• Both the index and the exchange are based on Rivigo’s machine learning and economics powered pricing algorithms, which are continuously improving on accuracy.
• The rates on the exchange and index are computed using millions of data points from historical transactions, current market dynamics, micro market insights and other factors – with the ultimate purpose of giving a fair and precise representation of the state of the spot market in the country.

Significance and the need for NFI:

• In the existing logistics market structure, there are high inefficiencies due to information asymmetry, which leads to a great loss of value.
• NFI will enable unrestricted access and sharing of freight rate information. This will bring transparency in the market and propel the logistics sector towards efficiencies and growth.

Background:

The Indian road freight market for 2018 is estimated to be in the range of USD 150-160 billion. About USD 130-140 billion of this is the Full Truck Load (FTL) market. Within this, Rivigo estimates that the spot freight market is about USD 110-130 billion and is growing at 9%-10% per year.