Baltic Exchange and Freightos launch container shipping index

Baltic Exchange Chief Executive Mark Jackson; "We hope to provide the framework for the container shipping industry to develop sophisticated risk management tools."

APRIL 26, 2018 — The Baltic Exchange and digital container freight platform Freightos have reached an agreement that will provide the global container shipping industry with an independent, audited benchmark

The Freightos International Freight Index, which reflects weekly spot rates for 40-foot containers based on 12 to 18 million price points collected every week on 12 main shipping trade lanes, will be audited by the Baltic Exchange and republished as the Freightos Baltic Indices. This will also include a new headline index – the FBX Global Container Index (FBX) – a weighted average of the 12 underlying route indexes, while setting the stage for derivative financial instruments in the future.

The Baltic Exchange — now owned by the Singapore Exchange (SGX) — already provides daily assessments for the dry bulk, tanker and gas freight markets that are used widely in both the physical shipping markets and to settle Forward Freight Agreements (FFAs).

Freightos market intelligence, fed by the world’s largest freight rate database, is used by logistics services providers and supply chain organizations alike.

“Baltic Exchange benchmarks are already widely used as settlement mechanisms in the derivatives and physical markets for billions of dollars-worth of bulk freight transactions,” said Baltic Exchange Chief Executive Mark Jackson. “Our products have allowed shipowners, charterers and traders to manage the volatile business of moving bulk commodities by sea. We comply with the standards set by International Organization of Securities Commissions (IOSCO) and have been publishing data since 1985. By offering our robust auditing methodology to the FBX, we hope to provide the framework for the container shipping industry to develop sophisticated risk management tools.”

“Our technology and massive database of multimodal freight rates already power both market intelligence and real-time freight booking and management for over 1,000 carriers and forwarders, as well as over 3,000 shippers,” said Freightos Founder and CEO Zvi Schreiber. “We’re incredibly proud to drive more efficiency to the container freight market, cannot think of a stronger partner than the Baltic Exchange and the Singapore Exchange, and are looking forward to the future financial instruments that this index unlocks.”

The FBX represents ocean freight prices, including all ocean surcharges (BAF, CAF, SCS, PCS, PSS, WRS). Market intelligence on port and inland charges are available separately. FBX is published weekly on Sundays and represents the price of the previous week (Sunday through Saturday). Prices used in the index are rolling short term Freight All Kind (FAK) spot tariffs between carriers, freight forwarders and high-volume shippers. Index values are calculated by taking the median price for all prices on active lanes with weighting by carrier. 50 to 70 million price points are collected every month.

FBX Global Container Index covers the following shipping lanes:

The FBX represents ocean freight prices, including all ocean surcharges (BAF, CAF, SCS, PCS, PSS, WRS). Market intelligence on port and inland charges are available separately. FBX is published weekly on Sundays and represents the price of the previous week (Sunday through Saturday). Prices used in the index are rolling short term Freight All Kind (FAK) spot tariffs between carriers, freight forwarders and high-volume shippers. Index values are calculated by taking the median price for all prices on active lanes with weighting by carrier. Every month, 50 to 70 million price points are collected.

• FBX Global Container Index covers the following shipping lanes:
• FBX01: China/East Asia to North America West Coast
• FBX02: North America West Coast to China/East Asia
• FBX03: China/East Asia to North America East Coast
• FBX04: North America East Coast to China/East Asia
• FBX11: China/East Asia to North Europe
• FBX12: North Europe to China/East Asia
• FBX13: China/East Asia to Mediterranean
• FBX14: Mediterranean to China/East Asia
• FBX21: North America East Coast to Europe
• FBX22: Freightos Europe to North America East Coast China/East Asia
• FBX24: Europe to South America East Coast
• FBX26: Europe to South America West Coast

FBX is based on aggregated and anonymized real-time data from global carriers, forwarders and shippers that offer services on Freightos.com or use the Freightos AcceleRate freight rate management platform and have consented to this usage.

FBX data will be available to subscribers on the Baltic Exchange website, via the Freightos website and on Thomson Reuters Eikon screens.