CarriersContainer rateOcean freight
New York Shipping Exchange releases new container rate index
Growing need
The American digital platform New York Shipping Exchange (NYSHEX) will introduce a number of new freight rate indexes next year. It does this in collaboration with the financial services provider Intercontinental Exchange (ICE), known as the parent company of the New York Stock Exchange on Wall Street, among others.
NYSHEX CEO Gordon Downes announced that “we are launching a new series of indexes based on actual freight rates, which will be transparently managed by industry representatives and will be freely available for all carriers, shippers and NVOCCs to use for their index-linked contracts'.
No unnecessary luxury
Although there are already several other indexes of (spot) container rates internationally, the new initiative is not an unnecessary luxury, says Stuart Williams, COO of ICE. “The container shipping industry is vital to global trade, but it remains an inefficient and volatile market. For more than two decades, ICE has worked with customers to develop a network of liquid and interconnected markets that provide the price transparency and risk management tools needed to manage evolving supply chain and geopolitical risks.”
Zach Fields, investor at financial institution Goldman Sachs Alternatives and also involved in the project, states that 'we are seeing the container shipping industry move to index-linked contracts, meaning there is now a growing need for ways to hedge the volatility of spot container prices .'
Source: NT
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