A tie-up between the Baltic Exchange and digital container freight platform, Freightos is to launch an audited benchmark for the container shipping industry.
The two organizations today (25 April) announced that the Freightos International Freight Index, which reflects weekly spot rates for 40-foot containers based on 12 to 18m 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 – a weighted average of the 12 underlying route indexes, while setting the stage for derivative financial instruments in the future.
The Baltic Exchange already provides daily assessments for the dry bulk, tanker and gas freight markets which are used widely in both the physical shipping markets and to settle Forward Freight Agreements.
Unveiling the partnership, Baltic Exchange chief executive Mark Jackson said:
“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. 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 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.”
Freightos founder and chief executive Zvi Schreiber added:
“This exciting endeavour means that the world’s manufacturers, distributors and retailers, and logistic services providers, will for the first time be capable of managing ocean freight rate volatility. 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. 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.”
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 data will be available to subscribers on the Baltic Exchange website, via the Freightos website and on Thomson Reuters Eikon screens.