World Container Index to launch in September

Drewry Shipping Consultants and The Cleartrade Exchange have announced that the World Container Index (WCI), the first Europe-based assessment of container freight rates and index production, is scheduled for launch in September 2011.

The index will provide a new and important facility for the global market to hedge their freight rate risk and see major improvements in forward price discovery through the container derivatives market.

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, commoditised and recovered cargo.

During July and August the index will be made available to a small number of lead organisations for final testing and feedback prior to launch for trading on September 1st.

Contracts will be available with at least one clearing house at or soon after the launch date, and subscriptions to the index will be available from August 22nd.

The WCI reports agreed spot container freight rates for major East West trade routes, and consists of eleven route-specific indices representing individual shipping routes and a composite index.

The WCI will also collect and publish weekly market assessments for the following routes: Shanghai to Rotterdam, Rotterdam to Shanghai, Shanghai to Genoa, Genoa to Shanghai, Shanghai to Los Angeles, Los Angeles to Shanghai, Shanghai to New York, New York to Rotterdam, Rotterdam to New York, Los Angeles to Rotterdam, and Rotterdam to Los Angeles.

The WCI assessments are reports of the value of agreed freight rates between major container lines and shippers or freight forwarders. Only freight rates that are agreed between participants and on which cargo is or is expected to move, will form the assessments. Rates for quotes, tariffs, estimates, bids or offers are excluded. Rates are collected from organisations based in Asia, Europe and North America.

The rates reported by the index are spot rates with a validity of seven days to one calendar month from the date the assessment is reported. Agreed freight rates are to be reported in US$ per FEU.