Posted on: 5 February 2020
For the first time ever, daily spot ocean freight rate indices for 40-foot containers (FEUs) are now available via the Baltic Exchange and the Freightos Group, adding real-time, transparent price discovery and risk mitigation into the container freight market that powers global trade. The Freightos Baltic Index (FBX) has been produced weekly since April 2018 by digital freight platform Freightos, based off of live pricing data from hundreds of global logistics providers.
“With the robust, real-time data, as well as oversight from the Baltic Exchange, the FBX is positioned better than ever to provide a true pulse of the market in one of the world’s largest and most important industries. Container shipping pricing has become volatile and FBX will be the foundation of index-linking and future derivatives which allow carriers, forwarders and imports/exporters to hedge their risk, as is already customary in other industries,” said Freightos CEO Zvi Schreiber.
The Freightos Baltic Index differentiates by providing daily update frequency sourced from live data. As announced today at FreighTech 2020, these daily indices are now overseen by the Baltic Exchange, complying with the Principles for Financial Benchmarks set by the International Organization of Securities Commissions (IOSCO). These rules are designed to ensure benchmark quality, integrity, continuity and reliability.
Welcoming the launch of the daily service, Baltic Exchange FBX Council Chairman Stefan Albertijn said: “The Baltic Exchange is an independent, trusted body with deep experience of managing complex benchmarks for the shipping industry. We have closely monitored the index’s production over the past 20 months and are confident that the FBX meets our strict criteria.”
The Baltic FBX Council consists of Stefan Albertijn (Chairman), Beat Simon (Ontegos), Bjorn Jensen (Electrolux) and Mark Jackson (Baltic Exchange, also Maritime London director – pictured).
The Baltic Exchange, which already manages a diverse range of benchmarks for the global shipping markets, is also in the process of applying for Benchmark Administrator status with the UK’s Financial Conduct Authority (FCA).
Covering 12 key trade lanes and based on real data via Freightos and its live digital freight platform, the rates are rolling short term Freight All Kind (FAK) spot tariffs and related surcharges between carriers, freight forwarders and high-volume shippers. The FBX index is a weighted average of its underlying regional route indices. Each individual index trade lane is represented by five to seven of the major ports of each region. Together, this data unlocks the potential to control pricing volatility and will be the foundation for ocean pricing’s evolution towards index-linked contracts.
The Baltic Exchange already manages a diverse range of benchmarks for the global shipping markets including dry bulk, tanker, gas spot freight rates, asset values, vessel operational costs and ship recycling prices.