Shippers and carriers use several spot rate indices to benchmark their contracts. The Shanghai Shipping Exchange launched the first container rate index, the Shanghai Containerized Freight Index, in 2005. It now indexes spot rates on 15 export trade lanes out of China.
Other indexes include the World Container Index of spot prices on 11 trade lanes assessed by Drewry Shipping Consultants and Singapore’s Cleartrade Exchange; the China Container Freight Index; Container Trade Statistics’ spot rates in the Asia-Europe trade; and the TSA Revenue Index, which tracks average revenue per 40-foot container among the 15 carrier members of the Transpacific Stabilization Agreement in the Asia-to-U.S. trade.
Only a handful of U.S. shippers have negotiated indexed contracts. The Federal Maritime Commission has 45,000 contracts on file, only 62 (or less than 1.4 percent) of which are based on indexed freight rates, FMC General Counsel Rebecca Fenneman said. Of the total, 19 contracts were filed by carriers with at least one indexed contract. Twelve of the 23 beneficial cargo owners that have filed contracts have more than one indexed contract, and two have at least nine indexed contracts.
U.S. shippers are using different indices as bases for these contracts. Of the 62 contracts, 23 are based on the WCI, 18 on the CCFI, nine on the TSA index and eight on the SCFI.
The FMC is considering creating its own index of export rates, because the existing rate indices are oriented toward U.S. imports, and only two include U.S. export rates. It issued an inquiry on its Web site in May asking for comments on the idea, and interested parties can do so until July 9.
“The FMC is looking at whether it should even get into the business of putting together a rate index,” Fenneman said.
U.S. agricultural exporters are very interested in export rate indices, but she said the FMC doesn’t want to impact the competitive context for shippers and carriers.