THERE IS NO SINGLE “FREIGHT PRICE” WITHOUT STATING WHICH OBJECT IS BEING PRICED.
UNITS MATTER: USD/MT VS. USD/DAY Shipping and freight markets are quoted in multiple units. Voyage charters are often priced in USD/MT, while time charters are priced in USD/DAY. A voyage quote is all costs divided by cargo size. A time charter rate is the daily hire for renting a vessel – on top of that comes the costs for e.g. fuel, carbon, ports, etc.
Comparisons across contract types therefore require explicit conversions. Small differences in assumptions about speed, weather risk, port time, and bunker prices can change the implied time charter equivalent or voyage rate materially. Buying and selling freight is an over the counter bargaining process. Fixtures are private contracts with negotiated clauses, not screen traded standard products.
A voyage or time charter fixture includes multiple dimensions that can change the economics of the deal:
1. Market access: vessel position and next employment outlook
2. Route definition: load and discharge options.
3. Vessel specification: size, speed, consumption, draft, etc
4. Laycan timing: optionality and risk.
5. Cost: who pays what, and which delays are penalised.
This is the comparability problem. Two parties can both be right while quoting different economics. Many freight prices coexist. There is no single “freight price” without stating which object is being priced. Benchmark route assessments and indices are the institutional response. They define a standard reference
object so that market participants can talk about approximately the same thing, even when real fixtures remain bespoke.
FREIGHT BASIS VOLATILITY Basis is the gap between the price of a specific physical fixture and the benchmark used to value or hedge it, e.g. an Ultramax fixture versus an FFA that settles against a Baltic Exchange index. Basis mismatch is larger as in freight the reference is an index basket combining several standard routes into one number, so the hedge tracks an average exposure rather than the exact voyage being fixed. Basis volatility in freight is a signal that the reference object (Baltic Index) is not identical to the traded object (the fixture). Basis reflects real economic differences:
1. Route mismatch: when route names sound similar.
2. Timing mismatch: laycan and settlement averaging windows.
3. Clause mismatch: who bears costs, and which delays are penalised.
4. Operational constraints: draft, congestion, routing choices, and ballast.
5. Optionality: the value of flexibility embedded in the physical contract
This is also where false positives arise in benchmarking and comparisons. A trader might compute an implied freight by taking CFR minus FOB or compare against an informal broker indication. Internal experience with freight calculations shows that many disputes disappear once all details are aligned, and the remaining differences can be traced to specific assumptions such as premiums, terms, port costs, or draft.
28 | ADMISI - The Ghost In The Machine | Q1 Edition 2026
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