In order to enrich and improve the serial Shanghai Shipping Index® and satisfy the need of shipping-index-based futures exchange, Shanghai Shipping Exchange has on the basis of the original Shanghai (export) Containerized Freight Index (SCFI) compiled and issued Shanghai (export) Containerized Freight Index based on Settled Rates (abbreviated as SCFIS). For the purposes of guaranteeing the integrity, uniqueness and consistency of data collection criteria for SCFIS, the authenticity, accuracy and verifiability of data, and the exemplary, scientific, independent and security characteristics of the index plus punctual release, the Rules has been formulated as per the Articles of Association of China (export) Containerized Freight Index Panel to govern the data collection, compilation and release of SCFIS.

1. Rates collection
1.1 Definition of rates
  The SCFIS reflects the direction and extent of changes of the settled rates on spot export container market in Shanghai. The settled rates refer to the average levels of settled freight rates after voyage departure of container lines and freight forwarders. The container lines have a total market share of over 80% on the Europe and American west coast services (Europe and America Services in short) and the forwarders should guarantee the stable shipping volume of each week and well-proven business systems.
  The spot market of container lines herein is defined as the short-term contract market less than three months, or the FAK market, or the Open market. The spot market of freight forwarders herein is defined as the retail contract reached with clients, and the price is not influenced by type of shipper or peculiarity of container volume, etc.
1.2 Characteristics of rates
  Port of departure: Shanghai
  Port of destination: the basic ports of trade lanes. The basic ports of the Europe service are Hamburg, Rotterdam, Antwerp, Felixstowe and Le Havre. The basic ports of the American west coast service are Los Angeles, Long Beach and Oakland.
  Term of transportation: CY to CY.
  Container type and size: dry cargo container of 20GP, 40GP and 40HQ.
  Cargo type: general cargo
  Means of payment: freight prepaid
  Rate composition: basic ocean freight and surcharges per unit, and the surcharges include BAF/FAF/LSS, CAP, PSS, WRS, PCS, SCS/SCF/PTF/PCC and other surcharges in US dollars per unit.
  Billing currency: US dollar.
1.3 Collection of rates
  Frequency: weekly
  Time: 0:00-12:00 BJT each Monday
  Range: the voyages with ATD from 24:00 BJT last Sunday to 0:00 BJT last Monday
  Rate reporting: to guarantee the completeness, uniqueness and consistency of rate data, the index panelists tender the rate information in .JSON format via API to Shanghai Shipping Exchange (SSE) (refer to Table 1 and 2 for the reporting contents). The API operation must be in closed loop.

Table 1 Reporting of Settled Rates of Europe Service for SCFIS

B/L no. Port of
destination
Volume Rate (USD)
20GP 40GP 40HQ 20GP 40GP 40HQ
























Basic ports: Hamburg, Rotterdam, Antwerp, Felixstowe, Le Havre

Table 2 Reporting of Settled Rates of America Service for SCFIS

B/L no. Port of
destination
Volume Rate (USD)
20GP 40GP 40HQ 20GP 40GP 40HQ
























Basic ports: Los Angeles, Long Beach, Oakland

  Every quarter of year, SSE checks whether the reported data via API are compliant with the requirements and characteristics.

2. Index compilation
2.1 Data pretreatment
  (1) Verification against B/L information. SSE uses the port manifest data to verify the information in each B/L reported such as name of ship, voyage and ATD and check whether the voyage complies with the definition of rates. Any unqualified B/L record will be excluded from index calculation.
  (2) Deletion of unreasonable rate: for the repetitive B/L record between container line and forwarder, if the rate level of the forwarder is lower than the container line, the rate data will be excluded from index calculation.
  (3) For the 20GP and 40GP/HQ rates of each B/L reported by the panelist, the Grubbs criterion (when rate sample number < 20) or Pauta criterion (3σcriterion when rate sample number≥20) is applied to delete outliers. After treatment of outliers, the remaining rate data of all panelists by container type and by trade lane are sequenced from big to small, and then the highest 10% data and the lowest 10% will be deleted.
  (4) Limit on any individual panelist's share of container volume: in the rules, the share of any single panelist of container volume by type and by service should be not more than 50%. If the share of container volume of panelist is more than 50%, its container volumes of all the reported data should multiply the coefficient to be involved in the index calculation. If the share is not more than 50%, this step will be skipped. The formula of coefficient is:

  Where stands for the share of container volume of panelist of the container type on the trade lane, and the maximum share of any individual panelist should be =50%.
2.2 Index calculation
  (1) The average rates by container type and trade lane are firstly calculated by the below formula:


  Where and are the average rates of TEU and FEU in the nth term; and are the freights of the ith B/L of TEU and FEU in the nth term; and are the container volumes of the ith B/L of TEU and FEU in the nth term.
  (2) Then the benchmarking price indices by container type and trade lane are calculated by the below formula:


  Where and are the average rates of TEU and FEU of the benchmark period, and are the benchmarking price indices of TEU and FEU in the nth term, and the benchmark index is set as 1,000 points.
  (3) Finally the index of settled rates of Europe/America service is calculated by the below formula:

  Whereis the index based on settled rates of the trade lane in the nth term, and are the weights of TEU and FEU respectively in the Nth year, and is the conversion coefficient for weights adjustment in the Nth year.
2.3 Weight adjustment
  SSE will perform evaluation once every year to decide whether to adjust the weights of TEU and FEU. The adjustment period must not conflict with the settlement days of index-based futures transaction and be no later than March of the year.
  To guarantee the continuity and comparability of index in the time sequence, the conversion coefficient of weights adjustment by container type is determined by the below formula:

  Where is the coefficient for weight adjustment in the Nth year, t refers to the weight adjustment in the tth term of the Nth year, and and are the new weights of TEU and FEU in the Nth year.

3. Index publishing
3.1 Publishing form
  (1) Sample format: the sample format of SCFIS is as below
SCFI based on settled rates
Published by Shanghai Shipping Exchange as of DD/MM/YY
Service Unit This Term Change from the
previous term (%)
DD/MM/YY
Index of Europe service
(basic ports)
Points **** **
Index of American West
Coast service (basic ports)
Points **** **
  (2) Benchmark period. The benchmark period of SCFIS is June 1, 2020 and the benchmark index of 1,000 points.
3.2 Publishing time
  The SCFIS is published every Monday at 15:05BJT. If Monday is not a working day, SSE may still publish the index on Monday or postpone it. In the last week of each year, SSE should on its official website announce the schedule of index publishing dates for the next year. If the State Council temporarily adjusts a holiday, SSE may adjust the publishing date accordingly. In this case, in the last working day after the announcement of holiday adjustment issued by the State Council, SSE should decide whether to adjust the index publishing date and if yes, announcement should be made within 24 hours of decision.

4. Contingency response
  For any occurrence of abnormal result of B/L verification, abnormal volatility of index or no voyage of alliance, the SCFIS contingency leadership group should after prudent evaluation compile and release contingent index.
  If the number of sampling panelists is less than the minimum requirement of the trade lane, the SCFIS contingency leadership group should after prudent evaluation compile and release contingent index. The minimum number of sampling panelists for both Europe and American West Coast services should be five.
  For any occurrence of major technological failure such as Internet, electricity and system, the SCFIS contingency leadership group should after prudent evaluation compile and release contingent index.
  When emergency happens, the effect of contingency index should be the same as that of the SCFIS in normal conditions.
  If the spot market is short of any data source for index calculation due to Force Majeure including but not limited to earthquake, war, strike, etc., the SCFIS contingency leadership group has the liberty to suspend the index release, but should immediately make an announcement to the public.

5. Review of Rules
5.1 Review from time to time
  SSE will review the index-related rules including the subject Rules from time to from, mainly dependent on any of the following conditions:
  (1) Consideration of market environment;
  (2) Reception of market feedback;
  (3) Detecting issue, if any, in index management.
  If there is necessity of revision, reference should be made to the Provisions for Revising the Index Rules of Shanghai Shipping Exchange.
5.2 Periodical review
  SSE periodically reviews the index-related rules including the subject Rules once every year to guarantee the compliance of index calculation. After the periodical review, an annual review report will be tendered to Shanghai Shipping Exchange Index Supervision Committee.
  If there is necessity of revision, reference should be made to the Provisions for Revising the Index Rules of Shanghai Shipping Exchange.

6. Limit on index usage
  The main purpose of index development and release is to reflect the specific market situation or policy more effectively. The index can be used for other purposes including but not limited to research or index-related products by financial institutions. The index users include all kinds of market players and the users should decide on their own to select the index fit for their purposes.
  The index development and maintenance are influenced by quite a number factors and the majority of which are beyond the control of SSE, which include but not limited to market restructuring, shortage or error of data source, dramatic change of market environment or geopolitical situation, etc. These factors may alter the index result and in some extreme cases even terminate the index. Users should be aware of these risks and include them in the terms and conditions of financial products. SSE shall not be held liable for the use of index, neither for research nor financial product.

7. Terminology
  FAK: Freight All Kinds Rates.
  CY-CY: from the container yard of the port of departure to the container yard of the port of destination.
  OPEN: the prepaid non-contractual service of open market in the locality.
  20GP: the general dry cargo container of 20ft long, 8ft wide and 8ft 6 high.
  40GP: the general dry cargo container of 40ft long, 8ft wide and 8ft 6 high.
  40HQ: the general dry cargo container of 40ft long, 8ft wide and 9ft 6 high.
  Prepaid: freight paid at the port of destination
  Liner alliance: the operation alliance formed by container lines for joint vessel operation, slot exchange or sharing, etc.

Contact us
  Shanghai Shipping Exchange
  18 Yang Shu Pu Road, Hongkou District, Shanghai 200082, China
  Tel: 0086 21 6515 1166
  Web: www.sse.net.cn

Disclaimer
  Careful perusal of the disclaimer prior to usage of the rules is required. The user may choose not to use, but the usage should be deemed as acknowledgement and acceptance of the disclaimer.
  The rules is for reference only and in no case should constitute the guiding basis, trading direction or advice on any shipping and logistics service contract, securities, financial product or other investment instruments or any transaction policy. SSE has the liberty to amend the rules at any time without notification. SSE endeavors to ensure the accuracy of the contents herein but has no obligation to guarantee its accuracy, completeness or reliability. SSE shall not be liable for any loss or liability arising from the direct or indirect use of the rules or any of its contents.