Norwegian container freight rate benchmarking platform Xeneta has launched its own shipping index, which it claims will transform the way shippers, freight forwarders and carriers conduct freight rate negotiations.
The Xeneta Shipping Index (XSI) allows all parties to set rates at transparent prices that directly follow market fluctuations.
“After several years working closely with cargo buyers and sellers, the one thing that is a clear pain point for many organizations is the inefficiency and opacity of contract negotiations,” explained Xeneta CEO Patrik Berglund.
“Freight rates are dynamic and prone to rapid change, so a shipper traditionally negotiating what they consider to be a fair rate for a long-term ocean freight contract can find that, three months later, they’re paying far in excess or below the actual market rates. This has the very real potential to make their products uncompetitive in the marketplace or risk supply chain disruptions.
“Similarly for carriers, when the market is low or high, they risk shippers taking their business somewhere else or not living up to their contracts as these are not enforceable. The current situation is not ideal for buyer or seller and neither one has the upper hand.”
XSI is a global ocean freight index with its foundations in Xeneta’s neutral database of over 65m contracted rates, covering over 160,000 port-to-port pairings, which is crowd-sourced from more than 700 leading international businesses, including shippers such as Electrolux, Nestle, Unilever, ThyssenKrupp, Tata Steel and Continental
Berglund added in a release that his company, Xeneta, had been created six years ago in order to make the “shadowy world” of rate fluctuations transparent.
The index is expected to bring some competition to the New York Shipping Exchange, launched in August last year, which has gained rapid traction via its digital forward freight contract for container shipping.