CONTAINER price indices, provided by a number of sources, are becoming increasing used in contract calculations in talks between shippers and carriers...
Box price indices increasingly used in flexible long-term contracts talks
CONTAINER price indices, provided by a number of sources, are becoming increasing used in contract calculations in talks between shippers and carriers as they forge flexible rates for the forthcoming shipping season.
Cargo volume under index-linked contracts is still small - 100,000 TEU against 37 million TEU between Asia and Europe - but still increasingly popular as they contain protections against price fluctuations, reports Lloyd's Loading List.
Container Trades Statistics (CTS) now covers container routes worldwide in 700 indices and sees growing interest in such contracts, said CTS chief executive Rod Riseborough.
CTS knows of 12 contracts signed in which freight rates are set against one of its indices. There are a number of indices today, the Shanghai Containerised Freight Index, the World Container Index and the Transpacific Stabilisation Agreement as well as data issuing from box derivative futures markets, which produce useful data for all parties.
CTS is contracted by global container lines to produce price and volume data, and initially focused on the European trades following the EU conference ban, but the company has since expanded into global data covering 447 routes worldwide.
Clarksons recently launched a virtual trading tool designed to give derivatives newcomers a chance to learn how the market works without financial risk.
