Clarkson launches Container Freight Swap Agreement

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Clarkson Securities has launched the Container Freight Swap Agreement, an over the counter cash-settled swap that will settle against the Shanghai Shipping Exchange’s newly created Shanghai Containerised Freight Index.

Global investment bank Morgan Stanley and regional container shipping specialist Delphis have completed the first trade.

The index is comprised of freight rates from Shanghai to a number of mainline ports around the world giving US dollars per TEU assessments on a range of trade lanes.

Rates are assessed on an all in basis for spot shipment by 30 panellists, consisting of container lines, non vessel operating common carriers and freight forwarders.

Alex Gray, chief executive of Clarkson Securities, said: “We have been working closely with the Shanghai Shipping Exchange to ensure the SCFI will be a suitable mechanism for container freight derivatives such as this and firmly believe this index heralds a new era for marine risk management.

“As well as providing an interesting product for financial investors, the CFSA will allow industry players to cover their own exposure against an agreed barometer of the market without affecting their competitive advantage. By allowing carriers to protect themselves against market fluctuations better competitive conditions for all will be created.”

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