Lin-gang international container trading platform flourishes
Ⅰ. Basic Information
The Lin-gang Special Area Administration has been advocating the introduction of a Shanghai international container trading platform to boost commerce. The platform was established by Shanghai Shipping Freight Exchange Co Ltd and was began trial operations on Nov 24, 2022. Its launch is said to have facilitated the allocation of resources to international and domestic shipping markets and enhance international shipping freight pricing.
Ⅱ. Main Practices
First of all, before Lin-gang launched the trading platform it undertook preliminary market research, canvassed a wide range of views and issued research reports and project planning documents. Then, a system of business rules and a regime about systematic access, transactions and risk controls was drafted. What's more, a system with trading as the core driver was established to facilitate the participation of shipping and cargo parties in trading. Subsequently, the developer set up a funds settlement system linked with the Bank of China, ICBC and other settlement banks. The trading platform obtained approval from the municipal transportation commission for on-line trial operations.
Second, Lin-gang innovated its trading – creating a direct shipping connection, through which shipping companies directly connected with medium-sized cargo owners, achieving direct sales.
In addition, the introduction of open quotations provided both shipping company freight quotations and buyer quotations and made the buyer's price voice visible in the market.
The platform has also turned agreements into trading contracts to enhance legal force and make transactions more serious and compliant. Meanwhile, a performance deposit mechanism has been introduced to guarantee the compliance of both buyers and sellers and the transaction completion rate has increased from 78 percent in the conventional market to 100 percent. The innovative trading system centers on transaction aggregations, as opposed to existing SAAS systems.
Third, Lin-gang is moving ahead with the development of its trading platform. These actively carry out market expansion, promote the participation of shipping companies, non-vessel carriers and cargo owners and have attracted six shipping companies including COSCO Shipping and SITC International. The 2.0 iteration of the trading platform optimized the trading rules by combining the feedback of customers trading experience and the research content of cargo owners.
Ⅲ. Effects of Implementation
The Shanghai international container space trading platform focuses on container space trading with "custom non-standardized space contract + space release" as the trading mode – providing services for spaces for sale, spaces for purchase. The platform has the function of locking up the shipping space, locking up the freight and performance guarantees, as well as dispute mediations.
At present, six shipping companies have signed up to participate. A number of leading international shipping lines are in communication, generating 157 quotes to date and quoting on contracts up to six months in advance. Moreover, the first renminbi quoted space and imported space quotes have appeared on the platform.
Overall, through several rounds of transactions and settlements, the market is said to be gradually picking up for trading platforms and the function of cabin locking and price locking has been verified.
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