Baltic Exchange launches opex index

The Baltic Exchange, under Singaporean ownership, continues to diversify away from its core freight rate offering. The London institution launched yesterday a new assessment to track the cost of operating vessels. Initially covering a range of dry bulk vessels (capes, panamaxes, supramaxes and handysizes), the service will also be expanded to tankers and other sectors.

The Baltic Operating Expense Index (BOI) will be published quarterly and based on assessments from three third-party shipmanagement companies: Anglo-Eastern, Columbia Shipmanagement and Fleet Management. Collectively they manage a fleet of more than 1,800 vessels. Additional companies are expected to join the panel in the future and a residual price calculation added later this year.

Baltic Exchange chief executive Mark Jackson said: “The Baltic Operating Expense Index is intended to provide transparency to the fluctuations in running costs. Daily operating costs are one of the variables used by shipping investors to calculate the profitability and residual value of their assets. We already provide independent freight, sale and purchase and recycling assessments. With the addition of operational expenses assessments, shipping investors now have a complete toolkit to manage their risk and aide their decision process.”

Each panel member will submit four numbers, expressed in dollars per day. Three will be combined to produce the BOI: crew, technical and insurance. The fourth, an assessment of a five-year drydock cost, will be amortised over five years to give a dollar per day price, but published separately and will not contribute to the BOI.

Assessments will be provided quarterly. Q4 2018 and Q1 and Q2 2019 assessments will be available following a recent trial. Q3 2019 assessments will be published on October 17.

Bought by the Singapore Exchange four years ago, the Baltic has been scaling up its business lines of late.

Last month, Splash reported how the Baltic has partnered with a spatial big data company to create a platform with an initial focus on shipping emissions.