- Cloud-based freight marketplace startup Freightos on Monday launched the Freightos International Freight Index (FIFI), which freely provides week-by-week benchmark prices for ocean freight shipping on three trade lanes, according to an e-mailed press release.
- From a database of over 250 million price points, FIFI includes container pricing, key lane costs, previous pricing, volatility, and instant estimations for specific routes. The index currently covers Transatlantic, China to US and China to Europe lanes, but seeks to expand to all lanes in the future.
- The index seeks to provide greater transparency to freight forwarders and shippers by removing barriers in access to data and disrupting the manual reporting process, according to the press release. Such a freight-rate aggregator should freely allow up to the minute decisions on shipping.
The black hole of freight rates has long been managed by the freight forwarder, whose nuanced knowledge of the costs and benefits of competing trade lanes helps shippers optimize their routes and navigate the complex field of logistics worldwide. Yet, with freight forwarders spending 24.4 million hours of labor a year to find and manage carrier rates for clients at a labor cost of approximately $500 million, the time would seem right for digitization.
Freightos' new index seeks to make pricing more transparent along all lanes with its cloud-based system. Previously, forwarders seeking a benchmark would turn to the Shanghai Containerized Freight Index, a week-by-week index of spot freight rates from Shanghai to base ports worldwide, or the more broad China Containerized Freight Index. While industry analysts often rely on this to track trends in rates, a lack of available data for all trade lanes, over-reliance on spot rates, and the sparseness of derivative indices hampers both indices' value, according to Flexport.
Freightos differentiates its index as a more vast version of the SCFI, sourcing its data from global carriers on its platform and 18 ports in the U.S, China and Europe, while also emphasizing its free availability. The tool is also an additional push for industry digitization by the cloud-based freight marketplace provider.
The success of the new index will undoubtedly depend on its uptake, but the move falls in line with a sector-wide push for digitization and transparency.
Established logistics providers at all ends of the spectrum are entering into the cloud-based freight forwarding business as they seek to expand their services, retain business and move into new markets. In Europe, DHL is offering a new platform called CILLOX, linking shippers and carriers, while German logistics provider DB Schenker has bought into uShip, and is formulating a plan to penetrate the American market. With new platforms, shippers now have the opportunity to confirm rates for themselves and make better freight routing decisions.