The platform, launched in August 2001, remains central to the Baltic's future strategy. The emphasis will now shift to member information, and in particular the Exchange's respected and independent indicators and settlement prices for the bulk freight market.
The decision stems from a detailed review of its business strategy undertaken by the board earlier this year, which concluded that the Exchange should focus on providing certain core services to its members.
Exchange Chairman, Peter Kitching said today:
"We consider that the e-platform will have a key role to play in distributing our unique range of freight market information - which we plan to develop further - and we shall be promoting its use to our world-wide membership. We are also conscious of the potential which the platform offers in terms of an important role in the development of freight futures trading and possible support systems."
The provision of market information, including the daily fixture list, dry and wet indices and route rates - and the development of new indices and routes - publication of freight futures settlement prices and the development of mark-to-market pricing for derivatives are among features on which the Exchange will concentrate using the e-platform.
Electronic communication will also be increasingly key in distributing information and communicating with the consultative group for the development of freight market information and freight futures trading.
The Directors' review also concluded that the Exchange would maintain its central role in providing:
- a self-regulated market and assisting in disputes;
- a voice for the industry on matters relevant to international shipping markets;
- lunching and related club facilities for its members;
- member directed education and training facilities;
- member communications such as Baltic Briefing and the magazine, the List of Members, and Postings, with more emphasis on their electronic editions.
As part of its review of the Exchange's business strategy, the board has also decided to revise the membership structure and subscription levels. At the end of 2001, it introduced a new structure based on corporate rather than individual membership. Developing the structure this year, membership costs are now linked directly to access and use of the Exchange's freight market information. Strict copyright and distribution restrictions will be applied. There are two membership categories. The basic one is for those who do not want access to freight market information and this will be cheaper than the existing fees. The second will offer access to the Baltic indices and related freight market information. For example, some member companies may choose to use the information within the company only; others may choose the right to communicate freight market information to their clients.
In addition, the Exchange is consulting the freight derivatives industry, including the Baltic members who form the Forward Freight Agreement Brokers' Association (who settle futures contracts for third parties with Baltic information) together with those who settle physical contracts, about arrangements for contributions to the Exchange's costs in providing freight market information.
Arrangements for the electronic news vendors (including Reuters and Bloomberg) and the print media will continue as present.
Mr Kitching said:
"The new categories of membership are designed to enable the Exchange to better meet our members' requirements and the majority of our members will benefit from reductions in subscription levels. Special arrangements will also apply to our panel reporting companies without whom the market would not have such first-class indicators and settlement prices. The board also considers that it is appropriate to apply copyright and other limitations to our freight market information so that this valuable information is properly used and generates revenue for the Exchange."
