History - 1949-Today
In 1949 the Baltic became world's first air freight exchange and the Baltic Airbrokers Association was formed. It was however not until 1952 that the government relaxed its control of the commodity and shipping markets. Membership of the Baltic rose again and the exchange expanded, building an annexe to house the secretariat and offices for tenants. Sir Winston Churchill laid the foundation stone in 1955 and in 1956 Queen Elizabeth II formally opened the extension.
In May 1971 there was a radical redrafting of the rules for membership. It was stipulated that a company seeking membership must satisfy the board that it had a reasonably large capital. Most of the members by this stage were limited companies who nominated individuals to represent them on the Baltic's trading floor.
Through the 1970s and 1980s the communications revolution gathered pace. First the telex machine, then faxes, cheap international calls, mobile phones, e-mail and the internet made face to face meetings on the trading floor increasingly redundant. The number of sessions held declined as shipbrokers increasingly stayed in their offices.
Freight futures
In 1985 the world's first freight futures market was launched allowing owners and charterers the ability to protect themselves from fluctuating freight rates. The Baltic International Freight Futures Exchange (BIFFEX) opened for business on the trading floor.
However, the most important part of the operation was the production of the Baltic Freight Index. Produced by a panel of shipbrokers around the world giving their assessment of the market value of a basketful of dry cargo routes.
Today the Baltic produces more than 40 daily route assessments, a sale and purchase index, forward prices, fixture lists and market reports.
The Baltic was no stranger to futures markets having hosued a coarse grain futures market of one description or another since 1929. Main crop potatoes, pig meat, live cattle, soya meal and early potatoes markets were sited on its trading floor in the 1970s and 1980s.
The Financial Services Act in 1988 brought this all to an end forcing all of the "Baltic" futures markets to unite under the banner of the Baltic Futures Association and re-sited at the London Commodity Exchange.
Friday 10 April 1992
At 21.20 hrs an IRA bomb consisting of 100 pounds of Semtex wrapped in a ton of fertiliser exploded in a van parked outside the Baltic Exchange. Three people died, including Baltic attendant Tom Casey and many more were injured as the bomb ripped through the Baltic destroying offices of major companies in the building and rendering the trading floor unoccupiable.
By Monday morning the Baltic was installed in Lloyd's of London and by Wednesday a trading floor opened.
The Baltic Exchange was unable to redevelop 30 St Mary Axe incorporating the historical elements as required by English Heritage and the site was sold to Trafalgar House in 1995. Most of the remaining structures on the site were then carefully dismantled whilst the interior of Exchange Hall and the facade were preserved and sealed from the elements.
Later assessment by English Heritage determined that the damage was far more severe than had previously been thought, and they dropped their insistence on restoration; a decision that led to much controversy.
London's latest landmark, the Swiss Re tower, also widely known as the Gherkin, now stands on the site of the old Baltic Exchange.
The Baltic today
The Baltic Exchange today is housed at 38 St Mary Axe, next to the 1903 exchange site. There is no longer a trading floor, but the Baltic continues to provide meeting and catering facilities for its members and tenants.
The Baltic today focuses on providing freight market information, dispute resolution and a light regulatory framework for the shipping market.
