Drewry Expands Container Freight Rate Benchmarking
Drewry Maritime Research, the global leader in freight rate benchmarking, has expanded its flagship Container Freight Rate Insight publication and now provides freight rate benchmarks on 550 international trade routes. Published monthly, the report provides all-in spot rates on all the key shipping routes of the world, including both headhaul and backhaul trades. In addition to the monthly report, subscribers also have access to an online database of both current and historical freight rate data dating back to January 2006. Drewry collects its proprietary freight rate data from active freight forwarders in the Far East, South Asia, the Middle East, Europe, the United States, Canada and South America, who provide their freight rates confidentially to Drewry.
“In times of heightened freight rate volatility shippers need a dependable source of market data in order to effectively benchmark their shipping costs,” said Drewry’s Container Freight Rate Insight editor Martin Dixon. “Over the past six months we have doubled the number of trade routes on which we provide benchmarks and increased the frequency of reporting on many routes in response to rising customer demand.” Shipping costs have proven particularly volatile in recent years. For instance, Drewry’s East-West Freight Rate index, a weighted average across key Asia-Europe, transpacific and transatlantic trade routes, has lost 41% of its value since it last peaked in July last year. Prior to this slump, the index had more than doubled through the preceding year from May 2009’s all-time low. Other indices covered by Drewry’s Container Freight Rate Insight provide further evidence of increasing turbulence in the container shipping market. Having reached a peak in March this year, Drewry’s Intra-Asia Freight Rate Index has since lost 18% of its value. Volatile shipping costs are dangerous for shippers, particularly those moving price sensitive products, as an unexpected rise can eat into margins. “Our research shows that freight rate volatility has been increasing over recent years, with more violent frequencies of oscillation,” continued Dixon. “Cargo owners need to accept that volatility is now a long term feature of more turbulent times and plan accordingly.” A more uncertain geopolitical and economic landscape will make it increasingly difficult for carriers to accurately match new build capacity to demand, so leading to more frequent and noticeable peaks and troughs in the shipping cycle.
“We have noticed increased uptake of our freight procurement advisory service, particularly from those shippers whose margins are exposed to shipping cost volatility,” added Dixon. Drewry is the market leader in the provision of container freight rate market intelligence. In addition to the Container Freight Rate Insight, Drewry publishes the World Container Index in collaboration with Cleartrade. This new index is drawing increasing interest from shippers looking to reference it for index-linked contracts as well as derivative traders who use it as a settlement mechanism in swaps transactions.