DNB Markets, a leading provider of equity research in the maritime industry, creates consensus-beating forecasts using Xeneta’s data

The Challenge

DNB Markets’ Shipping Team publish regular equity research reports on major shipping lines, including Maersk. Reports contain buy or sell recommendations
based on their view of each line’s likely future earnings. DNB looks to create models of future earnings to support their recommendations, by using data sources available to them. Other data sources in the market could not accurately forecast shipping lines’ earnings as they were either inaccurate or only had limited coverage (both geographically and by type of contract). DNB needed to find a better data source to be able to include accurate forecasts in their reports. 

Solution | Outcome

DNB subscribed to Xeneta, the world’s largest database of contracted ocean freight rates. Xeneta’s data covers all global trade lanes and includes both short and long-term rates. Xeneta’s data allows DNB to understand the global market and see changes in rates which will affect carriers earnings.

DNB built a model based on Xeneta’s data, which accurately (R2 = 0.93) predicted Maersk’s earnings historically. DNB can now use this model to forecast Maersk’s earnings before they are released to the public, allowing them to provide better guidance in their research reports.

Xeneta’s data allows DNB to estimate Maersk’s average container rates across all their global corridors. Their model weights these averages by Maersk’s global volumes to produce an average container rate. Changes in this average can then predict changes in Maersk’s reported actual container rates, predicting changes in revenue, profit, and ultimately share price.