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When Euronext set out to launch container freight futures, a critical decision was which index to partner with because, in any futures market, the underlying index isn't just a reference number, it's the entire basis of the hedge. If the index drifts from physical market reality, slightly, or even temporarily, the futures contract stops doing its job. Traders are no longer hedging their actual exposure. They're taking on new risk.
Erik Devetak, Chief Technology and Data Officer at Xeneta, explains:
"Futures only work as a hedge in the financial market, if the data, represents the physical market. Futures really work only if the index represents what's going on in the market."
This is why index selection is the foundational decision for any futures product. Get it wrong, and the entire instrument is built on sand. Get it right, and you have a tool that genuinely helps manage risk.
What makes an index fit for futures
Not all shipping indexes are created equal. For a futures contract to function as a true hedge, the underlying index needs to meet a high bar across several dimensions. Xeneta’s Global Container Price Index by Compass (XSI-C) meets all of them.
Timeliness
An index that lags the market doesn't just reduce accuracy - it actively creates incentives for both parties to move from the index.
"If the price of the market goes down and the index doesn't reflect that, the shipper has an incentive to go into the spot market. If the price goes up and the index doesn't reflect that, the carrier might have an incentive to sell capacity to someone who pays more." Erik Devetak
Xeneta's data is not only timely, it's ahead of some other indexes. And crucially, its strong correlation with those other indexes over time, provides independent confirmation that the Xeneta data is both accurate and current.
Market coverage and spread
A meaningful index needs to represent the full market, not just the largest carriers, not just the largest shippers, and not just the most-traded lanes.
Xeneta covers the complete spectrum: the world's largest carriers alongside smaller regional operators so it captures data that represents the true market, globally.
"Really having all the carriers — we have small carriers that probably most of you haven't heard of, shipping in the intra-Asia region. And that makes us aware of the whole spread of the market." — Erik Devetak
This breadth matters. An index that only reflects the behavior of the largest players will systematically misrepresent conditions for everyone else, and those misrepresentations compound when used as the basis for financial contracts.
The right Instrument on the right lane
Container freight has specific characteristics that earlier index products failed to capture properly. Xeneta was built around 40-foot containers, the standard unit of global container trade, on the exact lanes where index coverage previously didn't exist.
"Xeneta, with its capacity to represent 40-foot containers on locations where there weren't indexes on 40-foot containers, with the capacity of having timely data, with the spread of the data it has, with the amount of data it collects: it really can represent the physical market." Erik Devetak
This isn't a minor technical detail. A futures contract tied to the wrong instrument, or calibrated to a correlated-but-different trade lane, introduces risk.
Bjorn Vang Jensen, Executive Advisor at Xeneta, has seen this problem firsthand:
"We've all seen people trying to use an index that's correlated with a completely different geographical region to regulate a trade for which it is potentially not suitable."
Independence and neutrality
For an index to function as the foundation of a financial market, it must be perceived, and proven, to be neutral. No counterparty will accept a benchmark that originates from a participant with skin in the game.
"Independence of indexes is absolutely crucial. It's very difficult for somebody to accept an index that comes directly, for example, from a carrier." Bjorn Vang Jensen
Xeneta is an independent company. It has no commercial interest in freight rates moving in any particular direction. That independence is a prerequisite for the trust that a functioning futures market requires.
The proof is already in the market
Beyond the technical qualities of the index, there is a more fundamental form of validation: the physical market is already using it.
Three of the top five container carriers in the world actively promote Xeneta indexes to their customers. Millions of containers are already moving on Xeneta-indexed contracts. Billions of dollars of annual freight spend is already benchmarked against Xeneta data; not because of a futures product, but because the industry independently concluded that Xeneta best represents market reality.
"Every year we have more and more shippers and carriers putting money on index-linked contracts based on Xeneta data. So we know that we have an index that really represents the whole market of containers." Erik Devetak
This is not a theoretical claim. It is commercial evidence, accumulated over years, that the index works. When Euronext partnered with Xeneta, it wasn't introducing a new benchmark to a skeptical market. It was building a financial layer on top of a benchmark the market had already chosen.
"When Euronext partners with Xeneta, it partners with extremely good data quality, proven by the fact that people use these indexes, and also an existing network of people who are actively looking for something to manage their risk." Erik Devetak
Why this matters for you
If you are a shipper, carrier, treasurer, or risk manager considering container freight futures, the quality of the underlying index isn't an abstract concern. It determines whether your hedge actually works.
A futures contract tied to an index that lags the market, covers the wrong geography, or fails to represent the full spread of participants will not reliably offset your exposure. You may think you're hedged. You're not.
The Xeneta Shipping Index was chosen by Euronext because it meets the standard that a real futures market demands: timely, comprehensive, independently verified, and already trusted by the physical market it represents.
That's the foundation on which effective hedging is built.
Learn more about container freight futures powered by Xeneta
Xeneta is the leading ocean freight rate benchmarking and market analytics platform. The Xeneta Shipping Index underpins container freight futures on Euronext, launching across four key trade lanes.
