Freightos has introduced an index linking toolkit as part of its Freightos Terminal market intelligence solution. This toolkit enables dynamic contract pricing that adjusts automatically to market changes, helping importers, exporters, freight forwarders, and carriers maintain stable and reliable freight contracts.
Index linking toolkit
It is based on the Freightos Baltic Index (FBX) for ocean freight and the Freightos Air Index (FAX) for air cargo, both of which reflect real-time quoting and booking data. The toolkit also supports hedging through freight future agreements (FFAs) on the Chicago Mercantile Exchange (CME) and the Singapore Exchange (SGX), allowing businesses to minimize pricing risks and improve operational efficiency. Freightos aims to simplify the process by providing sample legal clauses and an accessible framework for index-based pricing.
“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,” said Freightos.
Freightos’ research consistently shows that fixed-price contracts suffer from disadvantages like carriers renegotiating rates or rolling cargo when rates increase or importers and exporters renegotiating when rates drop. Index-linking dynamically aligns rates with the market, dramatically reducing contract renegotiations while ensuring competitive pricing and consistent service.