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FIS Completes First Container Futures Trade

 

Freight Investor Services leads the way in the new container futures market, broking the first contracts on The CME Group’s NYMEX, opening the doors to further risk management in the container market

Freight Investor Services (FIS) has facilitated the first trade of the recently launched Container Freight Futures contracts on The CME Group’s NYMEX. FIS brokered a full Cal23 contract on The Freightos Baltic Exchange’s FBX 11 (China/East Asia to North Europe) at $7,900/FEU in 120 lots total. This trade comes after over two years of extreme volatility on the back of substantial supply chain disruption.

Peter Stallion, Container Broker at FIS said

“These futures come at an opportune time, with initial trading almost entirely focused on hedging. We’ve seen interest from a wide array of counterparties, including Ocean Liners, Freight Forwarders, Shippers and Financials – our job will be to grow the volumes in the market and develop a mechanism the market can rely on”.

Over the last few years, global container rates have been extremely volatile, with the FBX11 route increasing +500% since January 2020. Such volatility has upended much of the contract market and has driven interest in hedging tools.

Zvi Schreiber CEO of Freightos said:

“Containerised shipping rates are more volatile than ever, which disrupts world trade. At Freightos we’re proud to calculate the Freightos Baltic Index (FBX) which gives the industry visibility into rates on a daily basis. Today the industry has taken the critical next step of adopting modern financial tools which allow importers/exporters, forwarders and carriers to protect themselves from the brutal unpredictability of containerized shipping prices, by trading futures contracts based on FBX.” 

FIS has pioneered these tools with the support of the physical market, having developed an off-exchange market for Container Forward Freight Agreements (CFFAs) since the beginning of 2021.

Alex Pereira-Inacio, MD of Strategy at FIS said:

“FIS has 20 years of pedigree in bringing freight derivatives to market, assisting our clients in hedging price risk exposure. The start of cleared trading in Container Futures is another example in which we have pioneered a market, providing vital services in the volatile times that we live in”

Container Freight Futures are traded through FIS on 6 listed routes, cash-settling monthly against the all-inclusive ocean-freight spot price assessments by The Baltic Exchange.

Mark Jackson, CEO, Baltic Exchange (Index provider) said:

“We are delighted to see the first futures trade settled against an FBX container benchmark. Our robust, independent daily container indices are there to help build a liquid market and we are confident that this will be the first of many container futures trades.”

CME Product Specification (FBX11)

https://www.cmegroup.com/markets/energy/freight/container-freight-china-east-asia-to-north-europe-fbx11-baltic.contractSpecs.html

Full list of CME Container Contracts:

https://www.cmegroup.com/content/dam/cmegroup/notices/clearing/2022/01/Chadv21-475R.pdf

  • Container Freight (China/East Asia to US West Coast) (FBX01) (Baltic) Futures CS1 FT CS1 NY-CS1
  • Container Freight (US West Coast to China/East Asia) (FBX02) (Baltic) Futures CS2 FT CS2 NY-CS2
  • Container Freight (China/East Asia to US East Coast) (FBX03) (Baltic) Futures CS3 FT CS3 NY-CS3
  • Container Freight (China/East Asia to North Europe) (FBX11) (Baltic) Futures CS4 FT CS4 NY-CS4
  • Container Freight (North Europe to China/East Asia) (FBX12) (Baltic) Futures CS5 FT CS5 NY-CS5
  • Container Freight (China/East Asia to Mediterranean) (FBX13) (Baltic) Futures CS6 FT CS6 NY-CS6

Container Contact:

Peter Stallion | T: (+44) 7725264085 | E: PeterS@freightinvestor.com

Press Contact:

Chris Hudson | T: (+44) 7738697750  | E: ChrisH@freightinvestor.com

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