many shippers will always pay attention to the trend of the rate index, the supply chain chaos during the COVID-19 pandemic and historically high shipping costs have enabled the index to enter the market consciousness in an unprecedented way.
It is understood that most shippers say that the index can tell them whether prices are rising or falling, and thus whether shipping capacity is tightening or becoming more abundant. From a macro perspective, the index helps to judge the directional trend of the market.
But at the same time, the marine rate index also brings confusion to capacity buyers, because each of the five main rate indexes provides a slightly different market view.
For example, the Shanghai Container Freight Index (SCFI) is based on the spot exchange rate provided by NVOs of Asian Origin. Drewry's World Container Index (WCI) and Xeneta Shipping Index (XSI) are based on contract and spot exchange rate data provided by shippers or freight forwarders as part of the benchmark product. Data entering the Freightos Baltic Sea Index (FBX) come from transactions in Freightos.com's maritime reservation market. The container market data index of Platts, a sister company of Standard & Poor's Global JOC.com, is determined by collecting information from capacity suppliers on all-inclusive rates for major trade routes.
People familiar with the said that she mainly used data from Drewry and Freightos, partly to measure the direction of the market, and partly to serve as a benchmark for the performance of her company's shipping rates relative to the market. She added that the fact that the exact method of the indices is not clear does not negate their value as indicators of direction.
comparison of various indices shows that not only do they measure different parts of the market, but they are not in step.
whether these rates reflect NVO's offer today or the preferential prices that spot carriers may offer to shippers on existing contracts, a logistics manager said.
Eytan, chief marketing officer of Freightos, said Buchman that FBX is based on "reliable, externally audited data sources, combined with transparent methods to give the absolute median price of the spot market, not just a directional indicator." But he acknowledged that the index "rarely" reflected the actual rates that a given shipper would pay.
Brian Nemeth, managing director of consulting firm AlixPartners, said the indices could help shippers understand how to use the prices they receive to compare with market averages and are a valuable source of information, but they are a trend, not an absolute.
other factors need to be considered include whether the index measures spot pricing, contract rates or a combination of the two; including surcharges, such as loading fees, terminal handling fees (THC) or peak season surcharges (PSS); and integrating data from high-volume shippers, smaller or more transaction shippers, or both.