A weekly Europe-based ocean container index by Drewry Shipping Consultants and Cleartrade Exchange will launch in September, giving the shipping industry another tool to hedge against freight rate risks.
The World Container Index will cover spot freight rates for major East-West trade lanes and will consist of 11 route-specific routes.
The index is being launched in the face of widespread skepticism over freight futures among leading ocean carriers, including market leader, Maersk Line, which claims they do not accurately reflect freight rates and sow more uncertainty in the market.
Most freight rate derivatives are currently settled against the Shanghai Containerized Freight Index compiled by the Shanghai Shipping Exchange.
“Significantly, the new index will be the first of its kind to report weekly freight rates on backhaul as well as headhaul routes and will provide increased efficiencies in hedging strategies for freight users dealing in bulk, commoditized and recovered cargoes,” said Richard Heath of the World Container Index [WCI].
The index will be made available to a small number of companies in July and August prior to the official launch in September.
Contracts will be available with at least one clearing house near the launch date and subscriptions to the index will be available from August 22, WCI said.
The WCI will collect and publish weekly market assessments and a composite market index for the following routes: Shanghai-Rotterdam; Rotterdam-Shanghai;Shanghai-Genoa; Genoa-Shanghai; Shanghai-Los Angeles; Los Angeles-Shanghai; Shanghai-New York; New York-Rotterdam; Rotterdam-New York; Los Angeles-Rotterdam; Rotterdam-Los Angeles.
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