The Baltic Exchange has for the first time launched daily spot ocean freight rate indices for 40-foot containers (feu), with Freightos Group adding real-time, transparent price discovery and risk mitigation features.
The Freightos Baltic Index (FBX) has been produced weekly since April 2018 by digital freight platform Freightos, based off 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 FBX differentiates by providing daily update frequency sourced from live data.
The daily indices are overseen by London’s Baltic Exchange, complying with the Principles for Financial Benchmarks set by the International Organization of Securities Commissions (IOSCO).
Baltic Exchange FBX council chairman Stefan Albertijn commented: “We have closely monitored the index’s production over the past 20 months and are confident that the FBX meets our strict criteria.”
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. The data is expected to help control pricing volatility and set a foundation for ocean pricing’s evolution towards index-linked contracts.
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).
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