Cleartrade Exchange and Drewry have unveiled the World Container Index assessed by Drewry, a global index that can be used by physical and derivative market participants to manage freight risk.
The index will report individual market prices on major east-west container shipping routes. Initially prices for 11 individual routes and a composite index will be reported each week. These will cover trade in both directions between Asia, North America and Europe.
The index data will be generated by Drewry’s team of industry analysts from multiple market sources including carriers and intermediaries and published by WCI Marketing Services, a 50-50 joint venture with Cleartrade Exchange, an electronic marketplace for over-the-counter (OTC) freight and commodity swaps.
Drewry and Cleartrade Exchange believe that the new market price indices fill an important gap in the market, offering wide geographical scope as well as the inclusion of ‘backhaul’ routes from an independent trusted research house.
Richard Baker, chief executive officer (CEO) of Cleartrade Exchange, said: “This is a big step forward for the container freight derivatives market, providing a robust set of indices on trade routes that reflect substantial physical volumes. We estimate the physical volume in 2010 on these 11 routes was 37 million 20-foot container moves. The potential for hedging and trading that freight risk is obvious.”
The World Container Index will be available to all users of the container freight market including shippers, carriers, forwarders, banks, brokers and clearing houses. The index will be published weekly on Thursdays.
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