New era of price discovery and risk management solutions
The World Container Index, the first Europe-based assessment of container freight rates, has gone live on schedule (on September 1, 2011), ushering in a new era of price discovery and risk management solutions in the container freight market.
The first published World Container Index freight rates show increases on some, but not all, major routes. The spot container freight rate index on the Shanghai-Genoa route was $2,270 per 40ft container this week, up 8% on the assessment made in the first week of August. On the Shanghai-New York route, this week’s spot rate is $3,477 per 40ft container, up 11% on the assessment made in the first week of August. The WCI rate indices for the backhaul routes from Europe and the US to China have remained stable in the past month.
Full launch of the World Container Index follows a long period of development, capped by several weeks of external testing with selected shippers, lines and forwarders.
Data is gathered from actual transactions reported by panellists in the US, Europe and Asia, representing a cross-section of users in the container freight market. WCI has already sold subscriptions to the weekly index and will initially offer two access levels.
All subscribers will receive the live index, historical prices graph and a weekly email report. Advanced subscribers can see month, quarter and year to date index averages, a forward curve, historical data, settlement prices and in the future container freight swap volumes.
The WCI are inviting potential users to register for a free trial account, enabling them to see a limited snapshot of weekly data and find out about this new pricing tool.
Richard Heath of WCI said:
“The launch of the WCI is a major milestone for the container freight market. Our work in the build- up to this day has demonstrated both the appetite for this tool and the robustness of our approach and methodology. Subscription interest has been strong as has initial interest to trade against the index, and I am confident that support in the market will only grow as more organisations start to utilise this new tool.”
Philip Damas, of Drewry, one of the WCI joint venture partners, said:
“We expect trading of container derivatives against the WCI index to start this month. Moreover, shippers who have contacted WCI will gain access to the latest weekly indices and the historical prices, for the purpose of benchmarking and index-linked contract formation, from this week.”
The WCI is the only weekly assessment of container freight rates to provide price transparency on backhaul as well as headhaul routes, providing risk management and hedging opportunities for all freight users from shippers of commoditised or recovered goods to those moving high value finished goods.
The WCI reports agreed spot container freight rates for major East West trade routes and consists of 11 route-specific indices representing individual shipping routes and a composite index.
Source: Drewry
