Drewry introduces new freight rate benchmarks
Drewry Shipping Consultants said it is introducing new container freight rate benchmarks and indices 'in an attempt to make this $190-billion-a-year business more transparent.'
The product is to be launched at the European Shippers Council annual forum in Amsterdam today.
'Whereas the dry bulk and tanker shipping sectors have transparent market prices and indices, competitive container shipping freight rates have traditionally been opaque to most market participants and to financial institutions involved in liner shipping, particularly since the withdrawal of liner conferences from their former joint price-setting role,” Drewry said.
Drewry said it has created 150 sets of port region-to-port region container freight rate benchmarks, together with regional and global freight rate indices.
It said the benchmarks and indices would be updated at least every two months and that new services, such as weekly transpacific benchmarks, would follow shortly. The rates are to be posted at the Web site https://www.containerbenchmarks.com .
The rate benchmarks will be derived from actual market rates for full container loads, gathered from a cross-section of freight forwarders in Europe, Asia and America, Drewry said.
'We hope to remove some of the secrecy surrounding container freight rates and to allow shippers, in particular, to get competitive freight rates by monitoring Drewry's market-based freight rate benchmarks,” said Philip Damas, a research director at Drewry.
The Drewry initiative comes on the heels of a new online product, the Global Slot Network, offered by Clarkson and SynchroNet Marine, which allows shippers and carriers to anonymously place for bid cargo to be carried or space aboard ships.
'We think that it is incredible that a large global business like container shipping has operated until now without something as essential as global pricing benchmarks and indices,' Damas said. 'We believe that we have cracked this longstanding problem through multiple independent intermediaries (forwarders) who can provide us with aggregate pricing data on their respective routes without breaking confidentiality agreements with their customers.'
Drewry has said it hopes development of container freight rates would be as easy to track as changes in the container shipping charter market, which already has industry indices.
Drewry said the freight rate benchmarks would reflect changes in the spot container shipping market and were developed independently of ocean carriers.
'It is still impossible to have access to contract-type rates between one carrier and one shipper agreed under confidential agreements, Drewry said.
'While we are aware that our benchmarks will not capture the lowest rates obtained by very big shippers under confidential contract, we believe that the spot market ultimately determines the direction of the contract market and is essential for market monitoring,” Damas added.
Drewry said the new global container freight rate benchmarks are tool, which the market could use to operate better.
'Several multinationals in the petrochemical industry are already using our benchmarks to help their procurement decisions, and a few shippers we have spoken to are considering using them as an external cost index to determine the rate adjustments that they pay to carriers under multiyear contracts,” Damas added.
Drewry said it has been asked whether the indices could enable the introduction of forward freight agreements, but said 'this development is not seen as likely in the short term.'
Drewry introduces new freight rate benchmarks
