(Yicai Global) May 27 -- The day after China’s cabinet called for a re-doubling of efforts to speed up the listing of marine shipping freight and container capacity futures, a senior official at the Dalian Commodity Exchange said the bourse is ready to proceed with the latter.

The new futures contracts will meet the hedging needs of global shipping market players, targeting the cargo capacity of specific sea routes, the person told Yicai Global today. The contracts’ rules and business procedures such as trading, closing, and risk control, are based on the characteristics of China’s export shipping industry and its price fluctuations, he added.

The bourse, located in the northeastern Chinese port city of Dalian, has been developing shipping futures since 2019.

The new futures will enable exporters to hedge the risk of higher freight rates, while shipping companies can lock in prices, and therefore profits, in advance. Meanwhile, freight forwarders can avoid losses from fluctuating rates by hedging their spot shipping positions.

Different from existing freight derivatives with cash on delivery targeting dry bulk commodities and the tanker market, the DCE’s container capacity futures will be the world’s first shipping futures with physical deliveries, the official noted, adding that the futures will target shipping routes between ports in China and on the US West Coast.

Editors: Tang Shihua, Futura Costaglione