The World Container Index (WCI), the first Europe-based assessment of container freight rates and index production, will be launched jointly by Drewry Shipping Consultants and The Cleartrade Exchange in September 2011.
The index will provide another 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 Cleartrade Exchange said in a July 18 statement.
Significantly, the new index will be the first of its kind to report weekly freight rates on backhaul and headhaul routes, the exchange added. It will also provide increased efficiencies in hedging strategies for freight users dealing in bulk, commoditized, and recovered cargoes.
Most freight rate derivatives are at present settled against the Shanghai Containerized Freight Index that is compiled by the Shanghai Shipping Exchange.
In July and August, the WCI index will be made available to a small number of lead organizations for final testing and feedback before the launch of trading on September 1, 2011. 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 22, 2011.
“We are pleased to announce this important step in the process of bringing a viable, tradable container index to market,” Richard Heath of the WCI said. “We are now working with a number of parties on final feedback to ensure that we deliver a product which is tailored to the requirements of the market.”
The WCI reports will cover spot container freight rates for major east-west trade routes and consist of 11 route-specific indices representing individual shipping routes and a composite index.
The WCI will 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.
