Freightos introduces index linking for freight contracts

Freightos announced the launch of the Freightos index linking toolkit in its Freightos Terminal market intelligence solution.

The toolkit enables dynamic contract pricing that automatically adjusts to market fluctuations, providing a seamless and resilient approach to freight rate management, says an official release.

"Index linking transforms how importers, exporters, freight forwarders and carriers manage stable, reliable and persistent freight contracts while saving time and avoiding excess charges. Already common in industries like bulk shipping, index-linking is rapidly gaining traction in containerised shipping and air cargo, signaling a pivotal shift in freight contract management."

The index-linking is based on Freightos’s indices, the Freightos Baltic Index (FBX) and the Freightos Air Index (FAX) for air cargo, based on live, aggregate sources used for actual quoting and booking, the release added.

"When combined with hedging via freight future agreements (FFAs) on the Chicago Mercantile Exchange (CME) and the Singapore Exchange (SGX), carriers, forwarders and BCOs can reduce freight pricing exposure and improve internal efficiency."

Anton Barr, VP, Market Data, Freightos says: "Logistics teams, already stretched thin, are now renegotiating freight contracts quarterly instead of annually due to ongoing disruptions. In this volatile environment, ocean freight index linking is becoming more essential than ever. We’re setting out to make this as accessible as possible with trusted indexes, sample legal clauses, index pricing toolkit and more."