Shanghai Shipping Exchange ready to submit CCFI to audit if demand high

THE Shanghai Shipping Exchange (SSE) told London's Containerisation International that it is willing to subject its China Containerised Freight Index (CCFI) to an audit if enough shippers and carriers think it necessary.


The statement was prompted by rising concerns that some ocean carriers provide accurate manifest data, but others may not, thus the index may well be false by relying solely on the rate information submitted by 15 carriers on 11 trade routes from China.


To this, SSE president Zhang Ye said: "It is possible that one or two carriers may make a small mistake, but because the group is so large, it should not make much difference. However, if there is strong demand for an audit by carriers, then we can do this.


"Up to now we have always thought the CCFI to be accurate enough without this, but that view is not cast in concrete. We will listen to our customers. The index is not audited but tested over time - it has been operating for 13 years," he said.


The accuracy of the index is currently under greater scrutiny because of the need to find a reliable benchmark for ocean carriers and shippers to use in long-term ocean freight agreements that track market rates, said the report. Ocean carriers claim that their index published by Container Trade Statistics (CTS) is more reliable.


The SSE's other rating service, the Shanghai Containerised Freight Index (SCFI) tracks spot rates in 15 trade lanes out of Shanghai. While already audited, some raise questions about the small number of Chinese forwarders together with ocean carriers, which as a group may fall short of accurately representing the true spot rate market.


All of which have come under increasing scrutiny because the spot index is used by freight rate derivative market, generating its own controversy over its value and utility.
(Source:http://www.schednet.com)