Six daily Freightos Baltic Index (FBX) indices covering the transpacific and Asia-Europe trades will be used for the settlement of CME Group’s new container freight futures. The new contracts will be priced in US dollars per feu and will launch on February 28, 2022, with a first contract month for trading of March 2022, pending regulatory review.
“Importers and exporters, forwarders and shipping lines impacted by volatile ocean container rates will now be able to mitigate their freight price risk,” the Baltic Exchange stated in a release yesterday.
The futures move follows a year of record rate volatility, driven by bottlenecks and container equipment shortages, which saw China – US container rates fluctuate rapidly between $4,222 and $20,586.
Transpacific rates have fluctuated wildly this year going from $4,222 to $20,586
Zvi Schreiber, CEO at Freightos, said: “Container shipping is the foundation of world trade, but the industry has long suffered from lack of transparency and flexibility. We are excited that container shipping will now join other industries in adopting flexible index-linked pricing with financial instruments to hedge pricing risk. FBX futures will help global supply chains to cope with unprecedented demand and new levels of volatility driven by the pandemic.”
Peter Keavey, global head of energy products at CME Group, said: “The cost of freight shipping has become increasingly volatile, creating new price risks for the transportation of goods globally. We believe our new container freight futures will be a valuable risk management tool for customers looking to hedge their freight costs over a longer time horizon.”
The FBX data spans over five years and is provided by digital global freight booking platform Freightos, based on live pricing data from dozens of global logistics providers. The rates are rolling short term Freight All Kind (FAK) spot tariffs and related surcharges between carriers, freight forwarders and high-volume shippers.