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Cleartrade Exchange Pte Ltd. (CLTX), the OTC electronic global marketplace for commodity derivatives, announced it is now listing container contracts, Container Freight Swap Agreements (CFSAs), on the routes indexed by WCI assessed by Drewry, on its platform.
Richard Baker, CEO of CLTX, commented, “Until now container swap contracts have been negotiated by telephone, with limited access to market prices for all parties. Using an electronic exchange provides price and volume transparency for all. We expect this development to help participants use container derivatives with confidence to hedge their risk. We anticipate seeing stronger development and growth of an open market, with liquidity and volumes, which has been absent in the industry thus far.”
The WCI represents a 37-38 million TEU underlying physical market. There is good appetite on these routes for price risk management. Cleartrade Exchange’s combination of an index, which provides head and backhaul routes, and transparent execution of trades creates a strong and exciting opportunity for carriers, forwarders and shippers.
Richard Heath, Managing Director of WCI, stated, “We have seen an increase in demand for the use of derivatives; this contract launch by Cleartrade Exchange as a very positive step. WCI has been contacted by hundreds of organisations seeking greater visibility and understanding of this growing market; this offering by Cleartrade Exchange clearly fulfils that demand.”
Baker added, “This product launch is another significant milestone in the Cleartrade Exchange plan to enable our members to trade and manage their risk across multiple OTC derivative contracts through a single marketplace.”
