What is the Baltic Exchange?

The Baltic Exchange is the world's only independent source of maritime market information for the trading and settlement of physical and derivative contracts. Its international community of over 640 members encompasses the majority of world shipping interests and commits to a code of business conduct overseen by the Baltic.

Baltic Exchange members are engaged in arranging the ocean transportation of bulk cargoes such as oil, coal, grain and iron ore on behalf of shipowners and charterers; trading freight derivatives and buying and selling merchant vessels.


When was it established?

The Exchange traces its origins back several centuries with the first use of the name at the Virginia and Baltick Coffee House in Threadneedle Street in 1744, reflecting the particular trading interests of the merchants and ships' captains who frequented the premises and negotiated terms for the shipment of cargoes.


Who are its members?

Members are drawn from across the international bulk shipping industry and are mainly shipbrokers, freight derivative brokers, trading houses, shipowners and cargo interests such as oil majors, grain houses and iron ore miners. The Baltic also embraces those professions and organisations whose activities are closely related to the maritime world. They include: maritime lawyers and arbitrators, insurers, ship registries, financiers, ship classification societies as well as air charterers.


What is its constitution?

The Baltic Exchange has evolved over two and a half centuries and is now a wholly owned subsidiary of the Singapore Exchange, SGX.


Who owns shares in the company?

The Baltic Exchange is a member of the Singapore Exchange group of companies.


Are shares in the company traded on the Stock Exchange?

Shares in SGX are traded on the Singapore Exchange.


What is the Baltic Code?

The Baltic Code is the ethical foundation of the Exchange. On election to membership, all members undertake to observe the provisions of the code. The Baltic Code is enshrined in the Baltic's famous motto Our Word Our Bond. Through its code of business practice, the Baltic Exchange ensures that best market practice is observed. Members who have had unsatisfactory dealings with each other, or with non-members are able to call upon the Baltic's dispute resolution service, which typically recovers $1-2 million for members annually.

Baltic Code

How many people does the Baltic Exchange employ?

The Baltic Exchange employ 33 staff members based in London, Athens, Singapore and Shanghai.


What does the Baltic Exchange do?

The Exchange regulates its members' activities as shipbrokers, collates and distributes a range of unique freight market information, resolves disputes, speaks on behalf of the market and provides business facilities for its members.


What are the Baltic indices?

The Baltic indices are an assessment of the price of moving the major raw materials by sea. The indices are based on assessments of the cost of transporting various bulk cargoes, both wet (eg crude oil and oil products) and dry (eg coal and iron ore), made by leading shipbroking houses located around the world on a per tonne and daily hire basis. The information is collated and published by the Baltic Exchange. The Baltic is the only source of independent and quality freight market data and information. 

The principal indices are: the Baltic Exchange Capesize Index (BCI); Baltic Exchange Panamax Index (BPI);  the Baltic Exchange Supramax Index (BSI); and the Baltic Exchange Handysize index (BHSI). The Baltic Exchange Dry Index (BDI) is calculated by taking the timecharter components of the Baltic’s capesize, panamax, supramax and handysize indices. 

The Baltic Exchange International Tanker Routes (BITR) reports on 19 international oil routes and makes up the Baltic Exchange Dirty Tanker Index (BDTI) and the Baltic Exchange Clean Tanker Index (BCTI). 

The Exchange also publishes a daily fixture list, an LPG route assessment, the Baltic Exchange Sale & Purchase Assessment (BSPA), forward curves (Baltic Exchange Forward Assessment) and Forward Freight Agreement (FFA) settlement prices.


How are the indices used?

The indices are of crucial importance to the freight derivatives industry. They are also closely followed by charterers and shipowners. Some physical contracts - charterparties - are concluded on the basis of floating rates determined by the Baltic indices or route assessments.


Does trading still take place on the trading floor?

Up until 2001 the Baltic Exchange trading floor was used by members. Today there is no trading floor and a visit to the Baltic Exchange is usually for social reasons or to use its business facilities.


What is the role of shipbrokers?

Shipbrokers act on behalf of shipowners and cargo owners matching available vessels with available cargoes. They also buy and sell ships and are the source of detailed market intelligence. Shipbrokers also advise principals on risk management tools such as Forward Freight Agreements.


How important is the maritime sector to the British economy?

Defined to include the ports, shipping and maritime business services sectors, it is estimated that the British maritime sector directly creates 262,700 jobs.


What was the Baltic Exchange's financial performance in its latest trading year?

Click Here to download the annual report and accounts.


Who supervises the activities of the Baltic Exchange and its members?

The Baltic Exchange Council is the governing body which oversees the Baltic, including the Membership Committee and the Charities Committee, in relation to its strategy for membership services, social responsibility, charities and its relationship with its members, governments, regulatory bodies and the global shipping community.  Members of Baltic nominate from among themselves eight representatives on the Baltic Exchange Council who are vetted by the incumbent Baltic Exchange Council and approved by Baltic (the Member Representatives).  The Chairman of the BEISL Governance Council, the Chief Executive Officer of Baltic and two directors of the Baltic Board will also be members of the Baltic Exchange Council.  The Baltic Exchange Council elects its Chairman and Vice Chairman from among its Member Representatives.  The Chairman of the Baltic Exchange Council is invited to attend meetings of the Baltic Board where required.


Are there different categories of membership?

There are two main categories of membership - full membership and social membership. Members are required to adhere to the Baltic Code. All applications for membership are considered by the Baltic Exchange Membership Committee.


Can anyone become a member of the Baltic Exchange?

Membership of the Exchange is open to anyone involved in shipping and its associated business provided they meet the entrance requirements. Social membership is open to individuals or companies wishing to enjoy discounted use of the Exchange's dining and meeting facilities.


Can trade associations become members of the Exchange?

Yes. Member trade associations include for example BIMCO, the Baltic Air Charter Association, Association of Average Adjusters and the Hong Kong Shipowners Association.


What is a Forward Freight Agreement?

Forward Freight Agreements (FFAs) offer shipowners and operators, charterers and traders a means of protecting themselves against the volatility of freight rates. Broadly defined, it is taking a position in a futures (paper) market as a substitute for a forward cash (physical) transaction.


Who controls the Baltic's indices?

The BEISL Governance Council provides effective scrutiny of BEISL on all aspects of its benchmark determination process in accordance with the IOSCO Principles of Financial Benchmarks and the Guide to Market Benchmarks.  This council comprises five representatives of the appropriate segments of the market (including at least a dry bulk, a wet bulk and a shipping derivatives broker panellist) (Market Representatives) and one director of the Board of Baltic or of one of the Baltic’s subsidiaries.  The Chairman of the BEISL Governance Council is one of the Market Representatives, nominated by the incumbent BEISL Governance Council and approved by BEISL.  The Chairman is expected to have an intimate understanding of the physical and financial shipping markets as well as a deep understanding of Baltic.  The Chief Executive Officer of the Baltic is invited to attend all meetings of the BEISL Governance Council but does not have a vote on any decisions taken by the BEISL Governance Council.  The BEISL Governance Council Chairman will be invited to attend meetings of the board of directors of BEISL where required.

Baltic Exchange Ltd., St Mary Axe, London, EC3A 8BH
Registered in England Number 64795
Tel + 44 (0) 20 7283 9300, Fax + 44 (0) 20 7369 1622.
Calls to Baltic Exchange staff are recorded
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