WHAT IS 'Baltic Exchange'

The Baltic Exchange is the only exchange in the world providing real-time maritime shipping information for traders to trade and settle shipping contracts and derivative shipping contracts.

BREAKING DOWN 'Baltic Exchange'

The Baltic Exchange is an exchange that provides maritime shipping information and facilitates trades and settles shipping contracts and derivative shipping contracts. It was begun in London in 1744 and has operated continuously since. In 2016 it was acquired by the Singapore Exchange (SGX) and has been operated by SGX since the acquisition. It is headquartered in London, with offices in Singapore, Shanghai and Athens. It currently has 600 members. 
The Baltic Exchange website lists the following services offered:
  • "Independent, high quality dry, wet and gas freight market information
  • Self-regulated chartering, sale and purchase and freight derivatives markets
  • Central forum for competing freight market interests
  • Framework ensuring high standards of business practice and co-operation 
  • London-based business facilities for members "
Although it is an exchange, it does not facilitate trades the way securities exchanges do. Instead, it facilitates meetings of members who arrange their own transactions and provides information for members to use for shipping and trading. The exchange provides lists of shipping costs, published as the Baltic Dry Index (BDI), for members to use in making trade agreements by calculating the demand for shipping relative to the capacity for shipping. The Baltic Exchange tracks these costs through a number of different indexes. It uses these costs to settle freight futures contracts called forward freight agreements (FFA).
This information is crucial for anyone arranging shipping, because without knowing what the going rates are for different types of cargo, a shipper could charge too little or someone who needs to use a shipper could pay too much. Traders and researchers need this information to be able to invest and trade in the shipping industry wisely.

Using the Baltic Exchange

Members of the Baltic Exchange pay an annual membership fee. These fees are tiered and include anything from simple access to the Baltic Exchange website and index information to full use of the Baltic Exchange dispute resolution services, events and settling of FFAs.
Access to the website gives members access to over 20 different indexes of shipping costs, information on fixtures, or finished agreements for shipping contracts, training programs and the Baltic Briefing, a regular industry newsletter. Full membership also allows them to use the Baltic Exchange services to find shipping partners and to negotiate disputes. The Baltic Exchange also hosts social membership events.
  1. Freight Derivatives

    Freight derivatives are financial instruments whose value is ...
  2. Baltic Tiger

    Baltic tiger refers to any of the three Baltic nations of Lithuania, ...
  3. Singapore Exchange - SGX

    The Singapore Exchange is a full service equities, fixed income ...
  4. Maritime Law

    Maritime law, also known as admiralty law, is a body of laws ...
  5. Both-To-Blame Collision Clause

    A both-to-blame collision clause states that in a collision where ...
  6. Futures Exchange

    A futures exchange is a central marketplace, physical or electronic, ...
Related Articles
  1. Investing

    Bulk Carrier Vs. Container Vs. Tanker: Exploring the 2016 Shipping Market (C)

    Read about the divergent fates of oil tankers, dry bulk carriers, container ships and other seafaring vessels in the 2016 shipping market.
  2. Investing

    Looking to Invest in Oil Tankers? Try These 3 Stocks (NAT, SFL)

    Obtain information on the oil shipping industry, and discover three of the most widely traded oil tanker stocks to obtain exposure to oil shipping.
  3. Personal Finance

    Is Amazon Prime's $99 Annual Fee Worth it? It Depends (AMZN)

    More than 60 million people think Amazon Prime is a good deal. Here is how to determine if Prime membership may be worth it for you.
  4. Investing

    2 Stocks With 50% Upside: Evermore Global

    Shippers Scorpio and Navios could rise 50% in the next 12 to 18 months.
  5. Investing

    Amazon Is Working on a Jetsons Future Today (AMZN, UPS)

    Deutsche Bank released a report on Amazon's ever-expanding shipping network and its effects on UPS and Fedex
  6. Taxes

    Should The U.S. Switch To A Flat Tax?

    Some countries have begun charging a flat tax rate instead of the gradual tax system of the Western world.
  7. Insights

    Wal-Mart Takes on Amazon With Free Two-Day Shipping

    Wal-Mart goes for the jugular by offering Amazon Prime's most valued perk.
  8. Insights

    The Birth of Stock Exchanges

    Learn about the evolution of stock exchanges, from the Venetian states to the British coffeehouses, and finally to the NYSE.
  9. Personal Finance

    Amazon Prime Creates a Captive Audience (AMZN)

    Amazon Prime is an addictive service which has created a captive consumer audience for Amazon.com Inc.
  1. What are the costs for Free On Board (fob) shipping freights?

    Find out about free on board shipping, the obligations of parties involved, and the costs each party must assume. Learn about ... Read Answer >>
  2. What is a forward contract against an export?

    Understand forward exchange contracts in exporting, and learn the purpose of using a forward contract and its advantages ... Read Answer >>
  3. What are all of the securities markets in the U.S.A?

    Securities can be bought and sold via a number of exchanges in the US. Learn about the major and somewhat lesser-known U.S. ... Read Answer >>
Trading Center