Baltic Freight Index

The Baltic Exchange plays an important role in the global maritime sector and provides daily independent shipping market information. The Baltic Exchange produces more than 50 daily assessments of the freight values for various shipping routes and sizes (dry, wet and LPG) as well as weekly sale and purchase and demolition value assessments.

The Baltic Freight Index (BFI) was introduced in 1985 to provide the settlement for a new freight futures contract, BIFFEX. In the late 1990s the BFI was sub-divided into vessel-specific indices to allow better hedging strategies for the market and the changes in the original index can be listed as under,

• 1998: The Baltic Exchange Dirty Tanker Index (BDTI) and Clean Tanker Index (BCTI) were introduced.
• 1999: The Baltic Cape Index (BCI) and the Baltic Panamax Index (BPI) became active.
• 2001: The Baltic Handy Index (BHI) which was introduced in November 1997, became the Baltic Handymax Index (BHMI) in 2001.
• 2006: The Baltic Supramax Index (BSI) superseded the BHMI as part of the general evolution of ship types.
• 2007: The Baltic Handy size Index was introduced to represent the smaller dry bulk vessels trading in the market.
• 2003: The Baltic Liquidified Petroleum Gas Assessment (BLPG) was introduced.
• 2004: The Baltic Sale and Purchase Assessment (BSPA) and the Baltic Demolition Assessment (BDA) were introduced.

The Baltic Exchange provides the settlement prices for all dry and the majority of wet FFAs and is responsible for collating the route and index figures, which are published on all UK working days at 1300 (for dry) and 1600 (for wet and LPG). The BSPA and the BDA are published weekly on a Tuesday.

The Baltic also publishes the daily dry and wet forward curves received from the FFA brokers which are used by the clearers for margining purposes. The Baltic Handymax Index (BHMI) is calculated from the weighted, average rates on major time charter routes, with two trial voyage routes, as assessed by a panel of brokers. The Baltic Panamax Index (BPI) is calculated from the weighted, average rates on major routes, both voyage and time charter, as assessed by a panel of brokers.

The Baltic Capesize Index (BCI) is calculated from the weighted, average rates on major routes, both voyage and time charter, as assessed by a panel of brokers.

The Baltic Dry Index (BDI) is the average of the Baltic Handymax Index (BHMI), the Baltic Panamax Index (BPI) and the Baltic Capesize Index (BCI). The BDI provides a good general indicator of movement in the dry bulk market, and continues the established time series of the Baltic Freight Index (BFI) which was introduced in 1985.  As the index is derived from polling the market and not traded, there is no speculative factor influencing the movement of the index. This index is a concurrent indicator of the growth or decline in global cargo trades