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Cleared Container Futures Launch Driven by FIS 

The world leading freight and commodity brokerage Freight Investor Services are pleased to announce the launch of cleared Container Futures on the CME.  

On the back of significant demand, Freight Investor Services is pleased to announce the launch of exchange cleared container futures on the Chicago Mercantile Exchange (CME). Settling against robust benchmarks from The Baltic Exchange (The FBX Container Index), listed container futures bring in the full scope of counterparties to help the container market hedge against price volatility. 

These futures come at an opportune time, after a period of soaring freight rates, poor ocean freight reliability and long-term risk. Futures offer shippers the ability to lock in the forward cost of freight over a timeframe of their choosing and help claw back the cost of freight after an extremely volatile period. For ocean liners and ship owners, listed futures open opportunities to hedge against a downturn and ensure long-term stability and profitability after the strongest container market price run in history. 

FIS traded the initial run of container contracts off-exchange from early 2021, with exchange listing opening up the market to key liquidity providers. Peter Stallion, Container broker at FIS: 

“The volatility that we have seen in the last 18 months has led many participants in search of hedging tools. Futures are that tool to fill the gap between inflexible physical long-term contracts and outright exposure to spot prices. The launch of these cleared contracts opens up the market to all participants, helping drive forward an efficient and universally beneficial market”. 

FIS has noted a marked increase in inquiries for pricing and trading tools in the current volatile and uncertain market. The company has long been a supporter of new freight products, building on its pedigree in the dry FFA market, and pioneering container and air FFAs.  

Despite the hikes in prices into 2021, counterparties are still looking to hedge in future rates, even at these elevated levels. The unpredictability of pricing, and impact on the logistics chain of such developments, has led many to look for more certainty in future pricing. 

Alex Pereira Inacio, MD of Strategy at FIS noted that: 

“Futures and FFAs are tools that have been used for both the dry freight, wet freight, and commodity markets for many years, providing an invaluable and widely used financial tool to help manage risk. If there was ever a time for this to be adopted into the container freight market, then it is now.” 

Volatility for the past year has been extraordinary. Virus disruption, combined with crewing problems and port congestion, has caused soaring container rates and huge premiums to be paid.  

Rates on the FBX03 (China/East Asia to North America east Coast) route have increased from $2610 at the start of 2021 to over $22,000 in September, over 740% increase. 

Baltic Exchange Chief Executive Mark Jackson noted: 

“The daily FBX Index provides the market with a credible and fully transparent reference point and is based on the world’s largest global database of multimodal freight rates. The Baltic Exchange is authorised and regulated by the FCA (Financial Conduct Authority). Benchmark regulations ensure benchmark quality, integrity, continuity and reliability.” 

 

The listed contracts will be: 

FBX 01 China/East Asia to US West Coast 

FBX 02 US West Coast to China/East Asia 

FBX 03 China/East Asia to US East Coast 

FBX 11 China/East Asia to North Europe 

FBX 12 North Europe to China/East Asia 

FBX 13 China/East Asia to Mediterranean 

 

Contact

Company:  

Chris Hudson – Director of Communications – news@freightinvestor.com | +44 7738 697750 

 

Container Freight: 

Peter Stallion – Broker – PeterS@freightinvestor.com | +44 7725 264085 

 

About the Baltic Exchange 

The Baltic Exchange represents a global community of shipping interests. These include shipowners, charterers and shipbrokers who are collectively responsible for handling a large proportion of the world’s dry cargo and tanker fixtures, freight derivative trades as well as the sale and purchase of merchant vessels. 

The Baltic Exchange is regulated by the UK’s Financial Conduct Authority (FCA) pursuant to the EU Benchmark Regulation. It is the trusted provider of data for the settlement of physical and derivative freight contracts, underpinning risk management tools for the shipping and transportation markets. 

Founded in 1744, the Baltic Exchange is headquartered in London with regional offices in Singapore, Shanghai, Athens, Stamford and Houston. 

In 2016 the Baltic Exchange was acquired by Singapore Exchange (“SGX”). 

Baltic Exchange services: 

  •     Daily benchmarks for dry, wet, container and gas freight markets
    •    OPEX, S&P, ship recycling & forward assessments
    •    Air cargo assessments 
    •    Escrow and dispute resolution support 
    •    Executive training via the Baltic Academy 
    •    Networking for shipping professional 
    www.balticexchange.com 
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