TBB Global Logistics said it will offer container freight swap agreements through an agreement with ICAP Logistics, a broker for the freight-futures contracts. TBB, a third-party supply chain management firm, said it will be the first U.S. non-vessel-operating common carrier (NVOCC) to offer the futures contracts. The contracts are settled against the Shanghai Container Freight Index published by the Shanghai Shipping Exchange, the Journal of Commerce reports.
Sam Polakoff, president and co-owner of TBB, said container freight swap agreements can help companies manage rate risks for container shipping. "Importers with low-margin product will find CFSAs an intriguing methodology to deliver promised bottom-line results," he said.
Container derivatives have struggled to gain traction since their introduction last year. Major carriers including Maersk, Orient Overseas Container Line, APL, CMA CGM and Zim have criticized container derivatives, saying they will increase price volatility and not benefit carriers or shippers.
ICAP Logistics is a unit of ICAP Energy, which is part of ICAP plc. Other brokers offering freight derivatives contracts include Clarkson Securities and Freight Investor Services, both based in London.