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FIS Drives New Trading in Container FFAs
Freight Investor Services are pleased to announce a new wave of trading in Container FFAs during a highly volatile period for the Freight market.
Last week FIS completed contracts on container FFAs (Freight Forward Agreements) for the month of March ’21 on the Asia to Mediterranean route at a level of 7900 USD/FEU. This was based on the Freightos Baltic Exchange (FBX13) daily index. Mark Jackson, Chief Executive of the Baltic Exchange said that:
“The concept of index-linked floating contracts and FFAs in the container market for freight forwarders, shippers and carriers is not new. But the ability to benchmark a contract against a robust, trustworthy index which comes under the umbrella of a UK regulated organisation is a potential gamechanger for the container freight industry. The daily FBX Index provides the market with a credible and fully transparent reference point. It is based on the world’s largest global database of multimoda
FBX Index: Looking forward
As we moved through December and look forward towards 2021, market outlooks and FFA sentiment continues to fluctuate. Largely linked to consistent gains in spot prices, the majority of the front haul routes have seen a substantial upwards correction. FBX 01 China/ East Asia to North America West Coast saw gains throughout the 2021 periods with the full calendar year 2021 (Cal 21) now sitting at a relative high of $3,400 indicatively. Whilst the spot price for Trans-Pacific front haul rates has been flat, with much of the price fluctuation due to heavy surcharging of existing FAK rates, the focus has been the impact on a standard industry cycle and market bearish sentiment post Chinese New Year.