WCI Backhaul Routes Listed for Clearing

press release
Tuesday, March 06, 2012

Major boost for swaps liquidity as WCI backhaul routes are listed for clearing.
 

Introduction of clearing for new Europe-Asia routes will bring significant additional trading potential to container derivatives market. The World Container Index is pleased to announce that two WCI route assessments, covering Los Angeles to Shanghai and Rotterdam to Shanghai will now be cleared by LCH.Clearnet. The addition of clearing, which provides risk management for over-the-counter container freight swap trades, has been made in response to increased demand to manage freight price risk and reflects the growing market acceptance of the WCI.


Since launch in September 2011, the WCI has emerged as the preferred tool for pricing index-linked contracts in the physical container market while also providing the platform for hedging of exposure in the derivatives market.
WCI director Richard Heath said: “From its foundation, the World Container Index has been working closely with freight buyers and sellers to ensure that our products satisfy their needs for risk management. These first cleared contracts represent another step forward for the WCI and for the growing container freight derivatives market, helping to bring new solutions to a wider number of shippers, carriers and intermediaries.”
 

The contracts are similar to Asia-Europe routes already listed by LCH.Clearnet but differ in that WCI contracts are marked in FEU rather than TEU, to more accurately reflect the physical market. Contracts are settled monthly and initially will be available across the front three months, four quarters and front calendar periods. LCH.Clearnet director of freight and commodities Isabella Kurek-Smith, said: “LCH.Clearnet is delighted to clear these first WCI contracts, providing transparency and robust risk management for traders in the container swaps market. The growing demand for these new backhaul routes demonstrates that this is a market with considerable potential.”


Brokers in the Container Freight Swap Agreement (CFSA) market welcomed the develop as an important step in building trust and transparency in the WCI and delivering an additional layer of swaps market liquidity. FIS Container Swaps broker Steve Phillips said: “The listing of these contracts by LCH.Clearnet is a critical development for the container swaps market. Traders have been waiting for liquid contracts that complement the existing headhaul routes. These contracts bring their own unique opportunities for hedging and risk management and will provide a new impetus for increased swaps volume. The availability of these contracts, coinciding with the announcement by the WTSA, regarding the proposed GRI on westbound Pacific routes, highlights the benefits that container swaps can provide in managing volatility.”


Both the Los Angeles-Shanghai and Rotterdam-Shanghai contracts are classed as backhaul routes, with cargoes that are generally of lower value than the corresponding headhauls. The largest commodity groups include wastepaper, scrap metal, scrap plastic as well as agricultural commodities and chemicals, carried under a larger percentage of spot business than is typical on the Asia-Europe trade lanes. While freight rates on these routes are less volatile, market movements can be much larger in relative terms due to the low value of the freight and doubling of rates is not uncommon. Rates are driven by the availability of containers rather than vessel space, which makes rates less predictable and therefore highly suitable for hedging.
 

Maritime Reporter August 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Alaska Marine Lines Reduces Fuel Surcharge

Alaska Marine Lines, a marine transportation company providing barge service to and from Alaska and Hawaii, informs it has filed with the U.S. Surface Transportation

SSI to Showcase Marine Information Model

SSI's CAD/CAM ShipConstructor software utilizes a Marine Information Model (MIM) to store a wealth of data that can be leveraged for maintenance, repair and lifecycle support.

Bollinger VP Fanguy Snags SNAME Award

Louisiana-based shipbuilder Bollinger Shipyards, LLC announced its vice president for quality management system, Dennis Fanguy, will receive the 2015 William M.

Technology

SSI to Showcase Marine Information Model

SSI's CAD/CAM ShipConstructor software utilizes a Marine Information Model (MIM) to store a wealth of data that can be leveraged for maintenance, repair and lifecycle support.

ZF Turns 100

ZF Friedrichshafen AG is celebrating its centennial in 2015. Founded in the city of Friedrichshafen at Lake Constance in 1915 as “Zahnradfabrik GmbH,” the company

The Hour of Power

Hybrid Marine Technology and Green Ports In 2015 two significant developments are going to make many operators, owners and builders of professional vessels consider hybrid marine power.

Finance

Alaska Marine Lines Reduces Fuel Surcharge

Alaska Marine Lines, a marine transportation company providing barge service to and from Alaska and Hawaii, informs it has filed with the U.S. Surface Transportation

Bunkers International Files for Bankruptcy

U.S. based bunkering services firm Bunkers International Corp. announced August 28 that it has filed for reorganization under Chapter 11 of the Bankruptcy Code.

Asia-N.Europe Box Rates Jump 26 pct

Shipping freight rates for transporting containers from ports in Asia to Northern Europe jumped by 26 percent to $591 per 20-foot container (TEU) in the week ended on Friday,

Container Ships

TOTE’s 2nd LNG Containership Launched

Shipping company TOTE and shipbuilder NASSCO on Saturday launched Perla del Caribe, the second of two Marlin Class ships – the first containerships in the world to be powered by natural gas.

Asia-N.Europe Box Rates Jump 26 pct

Shipping freight rates for transporting containers from ports in Asia to Northern Europe jumped by 26 percent to $591 per 20-foot container (TEU) in the week ended on Friday,

CMA CGM-led Consortium Win Box Terminal Bid

The consortium formed by CMA CGM, Bolloré and CHEC won the bid process initiated by the Cameroonian government Following the bidding procedure initiated by the Cameroonian government,

Software Solutions

SSI to Showcase Marine Information Model

SSI's CAD/CAM ShipConstructor software utilizes a Marine Information Model (MIM) to store a wealth of data that can be leveraged for maintenance, repair and lifecycle support.

New Satcom Global Website in Oceania

Today, Satcom Global launched its Australian website, www.satcomglobal.com.au, which will offer a platform to better support our valued channel partners and customers in the region.

IMEI Certification - Unique Achievement

For Institute of Marine Engineers of India having achieved standardisation and maintainenace of quality processes simultaneously not just at their Head Office

Intermodal

Asia-N.Europe Box Rates Jump 26 pct

Shipping freight rates for transporting containers from ports in Asia to Northern Europe jumped by 26 percent to $591 per 20-foot container (TEU) in the week ended on Friday,

CMA CGM-led Consortium Win Box Terminal Bid

The consortium formed by CMA CGM, Bolloré and CHEC won the bid process initiated by the Cameroonian government Following the bidding procedure initiated by the Cameroonian government,

DP World H1 Earnings Jump, Mulls Iran launch

DP World may launch operations in Iran, the company's chairman said on Thursday, as the global ports operator reported a jump in half-year earnings after buying assets from its parent company.

Logistics

Alaska Marine Lines Reduces Fuel Surcharge

Alaska Marine Lines, a marine transportation company providing barge service to and from Alaska and Hawaii, informs it has filed with the U.S. Surface Transportation

Georgia Hooks Trident Seafoods

Trident Seafoods has opened a $40 million production and distribution center in Carrollton, Ga., providing 175 full-time jobs and the capacity to produce 50,000

Intermarine Opens Office in Ecuador

Intermarine, LLC, a transporter of project, breakbulk and heavylift cargo, announced it has opened an office in Quito, Ecuador.   The new office will operate

 
 
Maritime Careers / Shipboard Positions Maritime Security Maritime Standards Navigation Pod Propulsion Port Authority Ship Electronics Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.7148 sec (1 req/sec)