Bid to Create Container Freight Rate Futures Market Gets Mixed Industry Reception.
Wild rate swings of the past 18 months have shippers and carriers calling for a way to stabilize the market. In this week's feature story, The Journal of Commerce analyzes whether a "container freight swap agreement" being suggested by Clarkson Securities could be the answer. With container freight rates in the midst of virtually unprecedented volatility, Clarkson Securities -- the London-based derivatives brokerage arm of ship broker Clarksons -- is betting it can develop a market where container carriers and shippers can buy and sell futures contracts based on container freight rates. While bulk shippers and carriers have relied on this model for years to hedge against the risk that rising or falling spot rates might cut into the profit they expect from a particular voyage, no such option exists in the container industry. Now, with the wild rate swings of the past 18 months -- first falling to historic depths during the recession, then rising rapidly since last summer -- shippers and carriers are increasingly calling for a mechanism to bring greater stability to the market.