Drewry and WCI launch web initiative promotes index linked contracts

Drewry and WCI launch web initiative promotes index linked contracts

DREWRY and the World Container Index have launched a new initiative in their ongoing campaign to educate and share best practice in the use of index linked container contracts (ILCC) with a demonstration of how they work in the real world. 

The demonstration allows industry stakeholders to view how several different methodologies for these contracts develop and perform against the market in real time.

Index linked contract demonstrations are available online at www.drewrysupplychains.com/ilcc and access is free of charge. Three different contract scenarios are published, covering different trade routes and different methodologies. The contracts run from January 1 to December 31, allowing visitors to view historic performances as well as ongoing developments through to the end of 2014.

"Drewry and the World Container Index have been working together for the last couple of years with BCOs, forwarders and shipping lines to share best practice and facilitate the development and proliferation of these type of agreements," said WCI director Richard Heath.

Adoption of index linked contracts continues to grow as traditional fixed rate contracting comes under more pressure from continuing freight rate volatility.

"All three example contracts are based on methodologies that we know are being used right now," said Martin Dixon, research manager for freight rate benchmarking at Drewry. "In addition to tracking the contracts online, users can subscribe to quarterly briefings which provide analysis on recent market developments and impacts on the example contracts."

The WCI monitors spot rates and short-term contract rates of TEU moves from active forwarders in the Far East, South Asia, the Middle East, Europe, US, Canada and South America.