Guide To Market Benchmarks Ver2.1

Guide to Market Benchmarks
Version 2.1 - July 2015

Published by
Baltic Exchange Information Services Ltd
Preface to Version 2.1, published July 2015

This Guide is the successor to the Baltics Manual for Panellists. The original Manual
was published in 1999. It codified the principles underpinning the Baltics market
benchmarks which were initially produced in 1985.
The Baltics market assessments have a wide range of applications. They are used
by shipowners and charterers to assess market levels, and market trends, and they
may be used to settle physical market transactions. Some are used as settlement
mechanisms in the derivatives market. They are used in dispute settlement; by
economists; by journalists; and by market analysts and others who wish to monitor
trends in the shipping markets.
The new Guide has built on the Baltics 30 years of experience in the field of
benchmarking. It reflects recent developments in the markets and it ensures
compliance with the recently developed Principles for Financial Benchmarks, issued
by the International Organisation of Securities Commissions (IOSCO).
The Principles seek to ensure that any market benchmarks used for the purposes of
settling financial transactions are produced in accordance with rules which ensure
their quality, integrity, continuity and reliability. The Baltic has recognised the
importance of all these aims from the inception of its activity in this field.
IOSCO has set out recommended practices in respect of methodology, transparency
and governance arrangements. These broadly reflect the Baltics long standing
practices, but in some respects our governance arrangements have been overhauled
to ensure full compliance with the guidelines.
Importantly, the Principles recognise that, whilst they provide a framework of
standards, these can be met in different ways depending on the specificities of each
benchmark.
From inception the Baltic and its panellists have recognised that the world of
merchant shipping is extraordinarily complex, varied, and frequently very opaque.
This Guide has been developed with due regard to this knowledge and understanding
Shipping contracts are private transactions between two parties. Contract terms are
not standardised. The full terms, and the exact time and date of transactions are only
known, with certainty, to parties involved. Rates and prices may be agreed subject to
other conditions being fulfilled. Individual transactions are often of high value but may
be very infrequent. By the standards of financial markets, shipping markets are
illiquid. There is no obligatory reporting requirement for transactions and much
remains unreported. Yet markets are highly volatile and may move significantly in
very short periods of time.
In addition, ships exist in a very large number of different types and sizes. The value
of variances in design and performance of ships relative to a standardised benchmark
varies from trade to trade, and in relation to other key inputs such as bunker prices.
The quality of maintenance of ships and the creditworthiness and competence of
shipowners may be a factor in the value the market places on a particular ship.
The same class of ship may carry a range of cargoes on a great variety of routes.
Different ships, different trades, different cargo sizes, and a myriad of different
contract terms can all have a bearing on how individual transactions can be related to
standardised market benchmarks .Different market participants may well place
differing values on these variants.
This Guide recognises the principle that the rationale for its methodology has to be
consistent with the character of the shipping market.
It also recognises the principle that it is important to identify the potential limitations
of a benchmark. Many of these have long been recognised in our original Manual and
are also reflected in this Guide
The Guide makes it clear that a great deal of appropriate care is taken to ensure the
daily route assessments provide a fair valuation of the current market.
However the Baltic has always explained that reporting panels exist because,
ultimately, there is no independently verifiable right or wrong rate for index routes.
Therefore market levels at any particular time remain a matter of judgement.
CONTENTS
Page
No
Introduction
Governance Structure
Baltic Benchmarks: Independence of the Administration
Production Method
10
The role of the SFR
11
Selection of Benchmark Parameters
13
Calculation of the Benchmarks
15
Confidentiality and Transparency
17
Selection, Appointment, Responsibilities and Audit of

Panellists
18
10
Duties of Panellists
20
11
Guidance for Panellists
22
12
Operational Risks
27
13
Changes to Benchmarks
28
14
Code of Conduct
30
15
Audits and Quality Control
31
16
Complaints and Whistle-Blowing
33
APPENDIX 1
Current Index Route Definitions
35
APPENDIX 2
Details of Index Calculations
56
APPENDIX 3
Route Notes
69
APPENDIX 4
Time Charter Equivalents
73
APPENDIX 5
FFA Forward Curve Specifications
83
APPENDIX 6
Intraday Forward Curves
96
APPENDIX 7
Letter to Panellists Confirming Continuation of

Appointment Following an Audit by BEISL
98
APPENDIX 8
Delegation Process
99
APPENDIX 9
Business Continuity Procedure
100
1.
Introduction
The Baltic Exchange Ltd (BEL) is a limited liability private company with over
400 shareholders. It operates as a membership organisation within the
international shipping marketplace and currently has around 600 member
companies worldwide. Its revenues derive principally from membership
subscriptions and payments by members to its subsidiary company Baltic
Exchange Information Services Ltd (BEISL) for access to its freight market
information as well as from property and investments and from its Baltex
Multilateral Trading Facility (MTF). BEISL also derives revenues from
licences for access to its information from clearing houses operating in the
freight derivatives market and from information vendors and application
providers active in the financial markets.
1.1.
BEISL publishes a wide range of market reports, fixture lists and market rate
indicators on a daily and (in some cases) weekly basis. For this purpose
BEISL licences from BEL the rights to make use of its brand name in the
production and publication of the data. BEL is not directly involved in the
production, management or distribution of the data and it is BEISL which is
herein documenting its processes. Staff working in Singapore for the Baltic
Exchange (Asia) Pte Ltd are also responsible for the production of certain
Asia benchmarks which are specified within this document. Those
benchmarks follow the guidance in this document in all respects. For clarity
therefore references herein to the Baltic, or the Baltic Exchange are to Baltic
Exchange Information Services Ltd (BEISL), its staff and Board, unless
otherwise specifically stated. In some instances this will include staff and
resource from BEL which are provided under a service agreement.
References to the Chairman are to the Chairman of BEISL except where
stated otherwise.
1.2.
The Baltic publishes a series of rates which provide an assessment of the

prevailing market rate for a specified shipping route in the dry or wet bulk
market as well as for forward assessments of the Forward Freight
Agreement (FFA) market and associated options market. It also publishes
rates for specified ships in the Sale and Purchase and demolition markets.
The rates are published on a daily or weekly basis. Each individual rate
represents the combined (simple arithmetical average) view of Baltic
panellists (Submitters- see 4.2).[A single exception to this is described at 7.4
below]. Most of the individual route rates are used as component parts in the
formation of specific indices such as the Baltic Exchange Capesize Index (as
is more fully set out below). The Baltic is aware that certain of its benchmark
rates and indices are routinely used by members and non-members in the
shipping market and the wider financial community to settle freight
derivatives as well as physical market contracts (typically contracts of
affreightment and period hire contracts). However, the Baltic cannot have
any confidence it is aware of all of the uses to which its data is put.
1.3.
This document is concerned with the process for the definition, production and
management of BEISL benchmark rates.
1.4.
This Guide will be updated as required to reflect necessary changes to

practice.
2.
Governance Structure
2.1.
The overall responsibility for the administration of the benchmarks

belongs to the Board of BEISL. This board currently comprises a number of
Directors who also serve on the Board of BEL. Since BEL is the sole
shareholder in BEISL it has the exclusive right to appoint directors to the
board of BEISL.
2.2.
The BEISL Board meets at least once a quarter to review matters related
to the benchmarks and to make any necessary decisions, conduct reviews of
the accuracy and suitability of the benchmarks, and will review annually the
independent auditors' reports on compliance with the rules for index
production as set out in this Guide.
2.3.
The Board receives advice from staff of BEISL and BEL and invited
representatives from the marketplace. BEISL and BEL staff, together with the
market representatives, attend in an advisory role. At this time those
representatives are the Chairmen of the Freight Market Information Users
Group (FMIUG) (dry) and the FMIUG (wet) as well as the Chairman of the
Forward Freight Agreement Brokers Association (FFABA) for each of the dry
and wet markets and the Chairmen of the Panellist Working Group. These
groups are informally constituted bodies which seek to represent the views
and interests of market participants.
2.4.
Board minutes are produced for each meeting which reflect the discussion
and the decisions taken. Where necessary a second part of the meeting
deals with internal matters not of interest to the market representatives.
Minutes are typically recorded by a Baltic group staff member acting as
secretary to the meeting and are retained for a minimum of five years.
2.5.
The Senior Freight Market Reporter (SFR) is responsible with his staff for
the daily production activity and supervision of the benchmarks. He also
provides views and recommendations regarding the reporting of new routes,
problems with the reporting of existing routes and reviews the quality and
reliability of panellists. Throughout this document SFR is taken to include the
staff of the SFR to whom he/she delegates responsibilities when he/she is
absent.
2.6.
Certain benchmarks are produced in the Singapore office of the Baltic

Exchange which is a separate legal entity known as Baltic Exchange Asia
Ltd (BEAL). For the purposes of their benchmark production role the relevant
staff of BEAL form part of the SFR team and are subject to the SFRs
guidance and instructions.
3.
Baltic Benchmarks: Independence of the Administration
3.1
The independence of the production process is more fully set out in section 4
of this document. This section is mainly concerned with the independence of
the governance and management process.
3.2
Neither BEL nor any of its operating companies invests in or trades physical
or financial shipping assets or rates. It does invest in shipping market
infrastructure that directly or indirectly benefits its members. Its income
structure is not dependent on the level of the market. Therefore the Directors
consider BEL and its operating companies are effectively free from conflicts
of interest in relation to benchmark production.
3.3
Although the majority of Directors of BEL and BEISL are market participants,
conflicts of interest are minimised by the diversity of interests represented
and by the restrictions on shareholder voting rights enshrined in the statutes
of BEL.
3.4
Staff working for BEL and any of its subsidiaries are not permitted to invest in
or trade freight derivatives. They are also not permitted to invest in private
shipping market companies or indirect investment companies such as hedge
funds and private equity firms which specifically target the shipping market.
Investments managed at arms length by a third party are not restricted by
this clause. Should they be in any doubt as to the acceptability of an
investment then they are required to raise it with the Chief Executive of BEL
Group.
3.5
Investment by staff in the shares of listed shipping companies, either directly

or via collective investment vehicles (mutual funds) is acceptable as part of a
long term investment process. Day trading or short term investment is not
appropriate nor is the use of spread betting or similar products where they
relate to the shipping market.
3.6
All staff policies are contained within the BEL Group Staff Handbook, a copy of
which is provided to personnel when they start work. Amendments are also
distributed to staff as required.
3.7
BEISL Directors are not involved in the day to day index production process,
although Directors may sometimes represent panellist companies and could
be directly involved in the reporting of rates. The panellist representative is
likely to be in a similar position. The FFABA Chairman is likely to be from a
panellist company reporting the forward curve and may be directly involved
in the reporting of rates. All data received by the Baltic prior to its
amalgamation into published results is treated in the strictest confidence.
Access to this data by Directors is not permitted except on a historic basis for
forensic and audit purposes where in most circumstances it will be made
anonymous to protect all parties. This practice will be waived as reasonably
required to allow directors fully to investigate complaints or identified
problems with the benchmarks.
3.8
Although the Directors of BEISL will normally be shipping market

professionals, their range of backgrounds and interests should be sufficiently
diverse to protect the independence of the Baltic. This issue is considered
and documented by the Board of BEL each year.
3.9
The SFR reports to the Chief Executive of BEL and may in addition raise any
matters concerning the indices in confidence with the Chairman of BEISL or
the Chairman of BEL if he wishes.
3.10
Staff remuneration policies avoid any link between market levels and
remuneration.
10
4.
Production Method
4.1
The Baltic production process is based on the confidential provision of

assessments by panellists (known by the IOSCO as Submitters). The
assessments represent the professional judgement of the panellist at the
time of assessment of the prevailing open market level for the shipping route
or (in the case of the forward curve) the instrument concerned. In the case of
Sale and Purchase and Demolition assessments, the judgement is of the
current value of the defined vessel. (see Appendix 1 for assessment times
and reporting windows).
4.2
In reaching their rate assessments, panellists will take cognisance of the

totality of market information known to them at the time of reporting, making
any appropriate adjustment to accord with the Baltic's route definitions.
Where active markets exist, reports are expected to be informed by and thus
anchored in fixtures and current negotiations (transactional data). However,
the relatively limited liquidity of the shipping markets when compared to
some financial markets, together with their underlying volatility, mean that it
is essential panellists have discretion over the relative value they attribute to
transactional data, and to other data such as tonnage availability, order lists,
sentiment and news flow in reaching their assessments.
4.3
It is a characteristic of the global freight market that although a route may be

routinely fixed (traded) and therefore meet the criteria for assessment by the
Baltic when first adopted, there may subsequently be little or no activity for a
period of time. In these circumstances panellists cannot be guided by
transactions specific to the route and will therefore use their knowledge of
the wider market to provide an appropriate assessment.
4.4
The Baltic retains computer records of inputs and comments for a period of
at least five years.
11
5.
The role of the SFR
5.1
The Baltic considers it vital to the accuracy and reliability of its benchmarks
that it has in place an effective daily monitoring and supervision process
managed by the SFR. However, it is also essential that the role of the SFR
does not influence the outcome of the benchmark calculation.
5.2
The SFR is a senior shipbroker with a broad experience of the marketplace.

He/she will normally have experience as a principal or as a competitive
broker, usually in one of the larger shipbroking firms. The experience of the
SFR is supplemented by the SFR team as a whole which contains the
necessary mix of skills and experience. Taken together the team will have a
wide experience of the dry bulk and tanker markets, of principal activity and
of competitive shipbroking.
5.3
The Baltic production method requires that each panellist who has agreed to
provide an assessment of a specific route does so on every index reporting
day, so the primary responsibility of the SFR is to ensure that the report is
received from each panellist each day by the designated reporting time.
Panellists are exempted from reporting on local public holidays even when it
is an official reporting day for the relevant benchmark.
5.4
If for whatever reason a panellist exceptionally fails to report on a given day

for one or more routes for which they are on the panel, this must be
documented and as a minimum reported to the next Board meeting.
Persistent failure by a panellist to report will lead to suspension from the
panel. This approach ensures that the SFR can never cherry-pick rates to
form the averages.
5.5
It is an important part of the Baltic process that the SFR is familiar with the
activity in all relevant markets. The daily production of the dry bulk fixture list
and market reports are part of this process as are continuous discussions
with panel and non-panel brokers as well as with principals. The reporting of
fixtures to the Baltic, either for publication or on a private and confidential
basis is a considerable assistance to the SFR and helps to support the
accuracy of the benchmarks. All Baltic members are encouraged to disclose
fixture information to the Baltic.
5.6
If the SFR considers that a rate may contain an obvious error or be

significantly out of line with other inputs he contacts the panellist to consult.
5.7
The SFR is in regular contact with all panellists. It is not possible, necessary
or desirable to contact every panellist on every route every day. The SFR will
normally allocate resources according to the following priorities:
12
a.
Missing rates where the panellist has failed to report;
b.
Rates falling outside a predetermined tolerance range and therefore

highlighted by the Baltics computer system. This will vary from route to
route but is intended quickly to highlight what appear to be obvious
input errors.
c.
Routes which are currently relatively illiquid or for some other reason
difficult to assess and are therefore worthy of specific attention;
d.
Rates where the SFR is concerned the panellist may not be sufficiently
attentive to the task;
5.8
The panellist may advise that the rate is an error and offer to correct it.
Alternatively, the panellist and the SFR may hold a discussion about the
relevance of certain transactions and other relevant data to the Baltic defined
route. However, the Baltic will never require a panellist to change a rate or
impose such a change. There are other mechanisms (see especially 9.4 and
9.6) for dealing with panellists who are not considered able to report
professionally on a routine basis.
5.9
All contacts between BEISL and panellists are noted and briefly described in
a text field available on the computer system and are retained with all other
records (including individual panellist inputs) for five years.
5.10
A panellist may ask the SFR to make the correction to an input. Where the
SFR makes such an intervention this is recorded by the computer system
and the SFR is required to note the instruction from the panellist. The
panellist is encouraged to do the same.
5.11
The publication of assessments by the Baltic is authorised by the SFR when

satisfied that sufficient review of inputs has been carried out. When available
this will normally be authorised by the SFR personally. When he is not
available there will be a documented hierarchy of authority setting out who is
authorised to publish which rates instead of the SFR. This hierarchy will
recognise that some production takes place in Singapore and the decision to
publish in that case will be routinely delegated. The delegation process
currently in force is included here at Appendix 7.
13
6.
Selection of Benchmark Parameters
While the criteria set out below in 5.1 and 5.2 are applied at the outset of any
new route, markets may change over time such that the route no longer
meets the criteria. (See section 13).
6.1
The criteria for selecting routes are broadly as follows:

a. Trade Volume - A steady and significant volume of trade on index routes,
or on routes related to them, is important. Trades subject to seasonal
closures (such as for example the Great Lakes) are avoided;
b. Transparency - A reasonable volume of accurately reported fixtures
should be available. Where possible, trades dominated by a sole or
limited number of interests are avoided;
c. Standard Terms - Voyage routes where business is largely concluded on
standard terms are favoured;
6.2
Baskets and geographical balance

The Baltic provides calculations of composite rates which aim to reflect
movements in the global or regional shipping market for the vessel types
concerned. Weightings of routes used to create such a composite are not
intended necessarily to reflect accurately actual underlying trade flows nor
to be perfectly geographically balanced. The composition of these rates aims
to meet the needs of market participants, who are consulted on their design.
6.3
Vessels
In defining timecharter routes, the Baltic specifies the outline details of the
vessel to be assessed. The Baltic aims to base its description on a modern
vessel design which can act as an appropriate benchmark for its category.
6.4
Forward Assessment and volatility assessments

In order to support the shipping derivatives market and a mark to market or
fair value disclosure calculation by market participants, the Baltic provides
end of day and intra-day assessments of prices and/or volatilities for the FFA
and options market.
In establishing such reporting activity the Baltic applies rules which are
generally more flexible than those for the physical market benchmarks.
In starting reporting of a new contract it is guided by the recommendations of
the FFABA, the FMIUG and the clearing houses which serve the financial
14
shipping market. The key criteria in agreeing to report assessments for these
contracts will be:
-
the existence of a documented market expectation that an active

forward market for the contract and period concerned will develop
That the underlying spot physical route or basket is already being
reported on by BEISL
That sufficient panellists confirm they are able and willing to provide a
reasonably reliable forward price curve
Liquidity and open interest are kept under review and when no open interest
develops or such open interest as exists is closed or settled, the Baltic will
aim to cease reporting for the contract.
15
7.
Calculation of the Benchmarks
7.1
The Baltic rate which is published is an unweighted arithmetical average of

each of the panellist contributions received. A single exception to this rule is
described in 7.4 below. No rate is excluded.
7.2
The Baltic will not normally provide a rate for a physical market route where it
is unable to create a panel of at least five brokers who are considered to
meet the criteria for appointment.
7.3
In the case of the Baltic forward assessments, which aim to provide a

forward curve to the market for risk management purposes, more flexibility is
needed as there are at times as few as two brokers engaged in transactions
for specific contracts in the FFA market. In this case the assessment may be
produced with as few as two brokers providing rates. However, where this is
the case the Baltic will take steps to ensure the less reliable nature of the
data is drawn to the attention of the market. This will specifically include
statements on the Baltic website analysing the potential shortcomings of the
data.
7.4
The forward assessments provided for the dry bulk market are an average of
the rates input by each of the brokers. In the case of the wet bulk market the
rates represent an average which is weighted according to the market share
(based on data provided by the clearing houses) of each broker in the
preceding quarter. This is intended to enhance the accuracy of the curve in a
market where there are often few brokers involved and widely varying
expertise.
In addition to the end of day forward curve production described above, the
Baltic also produces intra-day forward curves which can be made available
to assist the main clearing houses in the FFA market in determining margin
requirements during the trading day. The data may also be used by others
for intra-day risk and profit analysis. The reporting and production process for
the intra-day assessments deviates somewhat from that for the end of day
assessments. The details of the process are set out in Appendix 6.
7.5
7.6
In the event that the Baltic publishes a rate which is subsequently found for
whatever reason to be an input or calculation error, the SFR will always
advise the Chief Executive. In addition to any other action which may be
taken, the Baltic will always publish the corrected data as soon as possible
and make a public announcement of the correction in a high profile position
on its website.
16
7.7
However, if, following publication of a route assessment, a panellist

submission is confirmed by a panellist to be erroneous, subject to the views
of the SFR and the Chief Executive, this will not normally give rise to a
change to the calculated rate, unless the error has been introduced by the
computer system or by Baltic staff. A different view may be taken if the error
is substantial and observed soon after initial publication has taken place. If
warranted the Chief Executive will consult with the Chairman of BEISL on the
matter.
7.8
All errors and the actions taken will be reported to the next Board meeting. If
necessary a special meeting will be convened.
7.9
The SFR will be vigilant in observing any unusual or suspicious pattern of

submissions from panellists and will report any concerns immediately to the
Chief Executive who will ensure that the matter is investigated and the
Chairman of BEISL is informed.
17
8.
Confidentiality and Transparency
8.1
Confidentiality is vital to the Baltic process and ensures that panellists are
free to provide their assessments without any threat of interference or
influence from the customers on whom they depend for income.
8.2
The Baltic will never disclose panellist inputs or comments except if required
by order of a court or a regulator exercising a statutory power. The Baltic
also keeps confidential the details of which panellists report on which specific
routes. The Baltic makes available general information regarding which firms
report.
8.3
Panellists may not disclose to any third party the assessments they have
provided to the Baltic except if required by order of a court or a regulator
exercising a statutory power. They should disclose to the Baltic any
inappropriate contact received from market participants which might
represent an attempt to influence rates or probe their inputs.
8.4
The Baltic publishes quantitative data on a monthly basis which are designed
to assist users of its benchmarks in understanding the current character of
each market and therefore the likely appropriateness of the benchmark as
reference for a financial instrument or contract for any given day or period.
8.5
Together these measures provide tangible and substantiated information

enabling users both to perform their own analysis and to be confident of the
benchmarks without risk of compromising the panel process.
18
9.
Selection, Appointment, Responsibilities and Audit of Panellists
9.1
The integrity of and respect for the Baltic indices are the result of the quality and
nature of the panel reporting companies and the reporting process itself. Above all is
the criterion that panellists must be competitive shipbrokers who do not invest in the
markets they report and are therefore free from conflicts of interest. On rare
occasions investment firms exist within the same group as panellist companies.
Where this is the case the Baltic must satisfy itself that the panellist is managing any
resulting conflict of interest appropriately.
9.2
Requirements for the number of panellists on each panel are set out in 7.2 and 7.3.
9.3
The Baltic Exchange appoints panel reporting companies in accordance with the
following criteria:
a.
The main business of panellists should be shipbroking. Principals

cannot be panellists;
b.
Panellists must be recognised as competent, professional firms,

actively engaged in the markets they report, with adequate personnel
to deemed qualified to perform the role of panellist;
c.
Panellists must be members of the Baltic Exchange, meeting all

relevant membership criteria;
d.
Panellists are bound by all of the relevant terms of this document. Each
year they are reminded in writing of the key parts;
e.
The Baltic aims to maintain a geographical spread of panellists;
f.
The Baltic will not appoint as panellists firms who are the exclusive
representatives of principals who are particularly influential in relevant
trades;
g.
The Baltic will not appoint as a panellist a firm which is dependent for
its business on a particularly small number of clients;
h.
The Baltic will generally not appoint as a panellist a firm which engages
in principal trading (as opposed to broking) in the freight derivatives
market.
19
9.4
No firm shall continue to be a panellist unless the firm:

-
Satisfies and, whenever required to do so, continues to satisfy the

Baltic as to the suitability and competence of the firm to report;
Is a member of the Baltic Exchange;
Having received notice of the responsibilities of a panellist, as

amended from time to time, performs the task of panellist diligently and
in accordance with this guide.
9.5
Panellists are appointed for an indefinite period of time. Their appointment is

formally reviewed each year, but can also be reviewed at any other time.
9.6
The appointment and removal of panellists is the responsibility of the Board,

which will be advised by the SFR. The decision to remove a panellist rests
with the Baltic alone and the Baltic is not obliged to provide reasons for the
removal or to enter into any correspondence on the matter.
20
10.
Duties of Panellists
10.1
On appointment to a panel the shipbroking firm commits to:
10.3
a.
Accept the index rules included in this guide.
b.
Continuing to satisfy the Baltic Exchange as to its competence and

suitability to report rates.
c.
Carry out a process of self-assessment at regular intervals during its

appointment having regard to relevant factors, such as the number of
shipbrokers in their employment with special knowledge and
experience on each route being reported.
d.
Appoint a manager and deputy to be the representative and who are

responsible to the Baltic Exchange for the performance of their firms
obligations as panellists. Such brokers shall have the expertise
acceptable to the Baltic Exchange and will be replaced if reasonably
required by the Baltic Exchange.
e.
Accept that all information provided by the panellist to the Baltic

Exchange remains confidential between the panellist and the Baltic.
f.
Hold an annual "audit" meeting with the SFR for the purpose of
reviewing submission quality and accuracy and compliance with this
guide.
g.
On request confirm to the Baltic index external auditor that the meeting
set out at 15.4 has taken place.
For the purposes of assessing suitability and competence of a firm to be a

panellist or to continue to be a panellist the Baltic Exchange requires the firm
to apply a process of self-assessment prior to consideration of the firm for
appointment, at regular intervals during an appointment and prior to an
appointment being renewed, having regard to a number of factors that may
be considered relevant, such as:
a.
Whether the firm has sufficient personnel who are acceptable to the
Baltic Exchange and who have adequate knowledge and shipbroking
experience to report on the agreed routes.
21
b.
The location of the firm and its ability to report at the times stated in
Appendix 1.
c.
The ability of the relevant panel reporters to converse using the

English language.
The ability of the panellist firm to meet these requirements forms a part of
the annual "audit" visit by the SFR, but the Baltic should be notified by the
panellist without prompting if at any time it considers it may fail to meet
these basic qualifications.
10.4
Responsibility for providing data for the voyage and timecharter routes should
be allocated to individual brokers in each panel company who have special
knowledge of the specific trade.
10.5
Even if the data is input by a junior member of staff, the route assessments
are always decided upon at a level of appropriate competence, and the Baltic
is notified of the identity of the responsible staff.
10.6
The representative of the panellist listed with the Baltic Exchange is to have
a nominated deputy in his absence. The principal or his deputy or nominee
named to the Baltic Exchange should oversee the daily report for errors
before it is sent to the Baltic Exchange. A nominee from each panellist
should always be available between the reporting time and the publication
time as set out in Appendix 1 for consultation with the SFR as required.
10.7
Panellists should retain any available substantiating information for at least

five years where such records exist in a suitable form. This would include,
where practical, day books, email records, telephone records and/or
messaging traffic.
22
11.
11.1
11.2
Guidance for Panellists
Panellists retain discretion to decide the respective importance of the factors

they have considered in reaching their assessment. However, the following
sections provide guidance to panellists as to the approach normally expected
when they consider certain factors. Section 4 of this document provides the
essential and overarching guidance to panellists since it sets out the key
principles followed by BEISL in the production of the benchmarks.
Panellists will take note of :
a.
Recently concluded fixtures, making their own judgements in respect of

the relevance of the information in the case of business fixed with
outstanding subjects, and any unusual contract terms;
b.
In reporting on timecharter routes panellists are expected to relate all

relevant aspects of reported transactions and market activity to the
benchmark ship. When considering speed and consumption this will
include the likely steaming speed and consumption of the Baltic
defined vessel in the prevailing environment for freight rates and
bunker costs.
c.
Current negotiations, bearing in mind they may frequently be a more

immediate reflection of the market than previously concluded business;
d.
The supply of ships balanced against cargo demand;
e.
Panellists will not normally be influenced or guided by:

i.
ii.
iii.
f.
Any assumption about the motivation behind a particular owners

or charterers decision to conclude a specific fixture.
Movement in the derivatives markets or period market, unrelated
to the positions being assessed.
How many days a ship has waited for a fixture.
In adjusting fixtures or negotiations which vary from route or vessel

definitions, panellists are expected to assess the relevance of any
deviation from the route definitions.
These include:
i. Specification of ships (timecharter routes). Panellists should
exercise their judgement as to the relevance or otherwise of any
deviation from the standard specification given in the route
definitions. This commonly includes deadweight, draft, cubic
23
capacity, age, LOA, speed and consumption.

ii. Laycan. Where ships are fixed either with laydays commencing
before, and/or cancelling dates later than the time specified in the
route definitions, panellists are expected to assess the extent to
which this is material.
iii. Delivery and redelivery positions (for timecharter routes).
Where delivery and/or redelivery positions fall outside the ranges
specified in the route definitions, but are nonetheless considered
relevant to the assessment, panellists should exercise their
judgement in respect of the appropriate premium or discount
which the market would apply on account of the difference. For
example, where a route definition states delivery
Antwerp/Hamburg for a round voyage redelivery Skaw/Gib and a
ship is fixed on these terms except with redelivery Passero,
panellists are expected to judge the market value of the
difference.
iv. Duration (for timecharter routes). Where fixtures are concluded
which, in the panellists judgement, fall outside the route
definition, panellists are expected to assess the significance of
any deviation. This is particularly important when ships are fixed
from strong areas to weak areas and vice versa, but may also be
relevant when business is fixed on a point to point basis, for
example trans Atlantic rounds or trans Pacific rounds, at a time
when the market structure reflects expectation of market
movement such as seasonal strength or weakness.
v. Commission. Route definitions state the commission at which
the business is expected to be quoted by usual channels to
active market participants. As such, panellists are expected to
make allowance for any variation in the rate of commission, for
example increased or reduced address commissions at which the
business is quoted in the market.
vi. Load/discharge terms (voyage charters). Where these differ
from the route descriptions, panellists should assess the value
the market places on any variation.
vii. Load/discharge ports (voyage charters). Where fixtures are
concluded from load or discharge ports which are outside the
route definitions, but deemed relevant to them, panellists must
assess the market significance of the difference. This will
normally reflect factors such as port costs, relevant drafts,
extra/reduced steaming, and the value or otherwise of
24
geographical position.
viii. Cargo size/type (voyage charters). Where cargoes are fixed for
quantities which fall outside the specified margins /specifications
of the route description, or for types of cargo which usually
command a premium or discounted rate, panellists are expected
to make an assessment of the market significance of the
variation. However, the critical criterion is always that, in the
opinion of the panellist, the fixture being considered remains of
direct relevance to the route being assessed. In assessing
voyage freight panellists should not modify reported rates to take
account of the actual quantity of cargo expected to be loaded,
provided it comes within the routes specification.
ix. Material deviation from normal charter terms. If the panellists
are aware of any charterparty term that is materially at variance
with the market norm, they are entitled to make an appropriate
adjustment.
x. Motives. Panellists are not expected to consider the motives
underlying any bona fide, properly reported market activity.
11.3
Age-related factors
a.
Definitions for all timecharter routes, and some voyage routes, stipulate
a maximum age.
In noting any timecharter market activity that is transacted by ships that
are older than the specified maximum, panellists are expected to use
their discretion in adjusting these rates to the route definitions.
11.4
b.
Where voyage routes stipulate a maximum age, panellists are

expected to make an allowance for any premium or discount applicable
as a result of the age of the vessel.
c.
Where the voyage route does not specify the maximum age, the
panellist is expected to adjust rates to reflect the rate for modern,
tonnage.
Assessing timecharter fixtures concluded on APS terms

a.
Route definitions make certain assumptions about delivery positions

which are not always reflected in the terms of fixtures concluded in the
market. For example, a route definition may call for a rate based on
delivery South Korea/Japan range for a Pacific round voyage with
25
redelivery South Korea/Japan, whereas in practice ships may be fixed

with delivery Arrival Pilot Station (APS) Australia (or North Pacific) at a
fixed rate of hire with or without a ballast bonus.
b.
Panellists take due account of all such market activity, exercising their
professional judgement in assessing the relevance of such information
to their daily returns.
c.
Panellists are entitled (and expected) to take a number of factors into

account including but not limited to:
i.
The timecharter equivalent (see following section) of a reported

fixture. In making this assessment, panellists exercise discretion in
determining applicable bunker prices, the duration of paid leg, and
appropriate allowances (such as a bad weather allowance) to the
ballast leg;
ii.
The extent to which a fixture is relevant to the route in question.

Factors to be considered include the incidence of such fixtures
relative to fixtures on such route definitions; where the ship
ballasted from and the probability of actually being able to
conclude business at the timecharter equivalent rate. Similar
principles apply when ships are fixed on APS terms with no ballast
bonuses. Typically the fixtures are concluded at apparently high
rates which need adjusting to take account of ballast time and
expenses incurred by owners.
In summary, such fixtures can be expected to form a persuasive but

not necessarily definitive element in route assessments.
Timecharter Equivalent Calculations
In assessing timecharter equivalent yields, net income less costs is divided
by total round voyage duration, where:
net income equals (net daily hire rate x days on hire) plus any ballast
bonus if any
cost is the cost of bunkers consumed plus any other relevant expenses
on ballast passage
total duration is the ballast time plus days on hire
The resulting net figure is then grossed up by the relevant commission to give the
applicable gross round voyage equivalent.
26
11.5
Extrapolation of implied timecharter rates from voyage fixtures

Occasions arise when there is a lack of underlying fixing on timecharter
terms in trades covered by timecharter route descriptions, even though
comparable trades are being fixed on voyage basis. On other occasions the
reverse will be true.
In these circumstances, panellists are encouraged to consider the
timecharter equivalent returns of the voyages being fixed, or alternatively the
implied voyage rate for a timecharter fixture, and to take this assessment into
account in deciding their returns.
Voyage calculations may also be appropriate to assist panellists in adjusting
fixtures to the equivalent of the Baltic vessel (in the case of timecharter) and
the Baltic load/discharge port, delivery, or redelivery area, and duration as
appropriate.
However, it is recognised that, just as voyage estimating varies amongst
principals, so too will it vary between panellists and, in addition, it is
recognised that such assessments will seldom be the only factors influencing
the panellists returns.
All physical market panellists are expected to be competent in voyage
estimating.
11.6
Forward Curve Reporting

All panellists providing data for the Baltic Forward Assessment are FFA
brokers who are members of the FFA Brokers' Association. Panellists are
asked to submit the mid price between the best bid and the best offer at the
time of the assessment.(see Appendix 1).
If at the time of assessment there is no firm two-way market, the panellist
will use his/her market expertise, being guided by market sentiment, other
vessel sizes and routes as well as last done transactions.
27
12.
Operational Risks
12.1
The index production and publication process is heavily dependent on a

computer system which integrates the panellist input pages (which are
password protected), the processes managed by the SFR (which are also
password protected) and the publication mechanism via the public website.
Within the public website there are a number of levels of access, also
controlled by password.
12.2
The software which provides the index production processes is a proprietary

system developed and maintained by Infx Systems of Hastings specifically for
the Baltic Exchange Ltd and its affiliates. The systems are housed in
specialised facilities provided by InFx. First line support in response to
technical problems is provided by Baltic staff, second line by InFx operations
staff and third line support is provided by the software development staff at
Infx. First and second line support is accessible at all times via a call-out
arrangement. Third level support is limited to UK office hours.
12.3
The Baltic Exchange Ltd and its affiliates maintain a disaster recovery plan
which is summarised in Appendix 8. This sets out how BEL will react and
recover from terrorist incidents, problems which render its premises
inaccessible, and major failures of infrastructure.
12.4
There is a certain level of risk to all computer systems from malicious attack.
Such attacks can be divided into three types. They may be specific attempts
to invade a certain computer system to disrupt or manipulate services, or they
may be more general hacking attacks where attempts are made to
penetrate randomly selected computer systems. The third type are the very
common denial of service attacks which seek to disable systems by
overwhelming them with requests rather than by penetrating them. The Baltic
employs third party specialists to test its systems annually to analyse the first
two risks. The third type of attack is defended against using sophisticated
infrastructure provided by CISCO Systems.
12.5
The Baltic ensures that staff levels among the SFR and technical staff are
sufficient to minimise risks brought about by unexpected staff absences. To
reduce risks from global epidemics, staff are discouraged from attending the
office when they are ill with contagious diseases such as (for example)
influenza.
12.6
It would be a cause of major disruption to the benchmark production process if

a critical number of panellists withdrew from the provision of rates. If the
number of panellists fell below the criterion set out in Section 7, the Baltic
28
might find itself unable to publish some or all of the benchmarks. Continuous
efforts are made to reduce the likelihood of this situation arising.
13.
Changes to Benchmarks
13.1
It is a characteristic of the shipping marketplace that trades change and

vessel types and sizes develop over time. This means that in order to meet
its own criterion of reporting only active trades, the Baltic must establish
mechanisms for allowing the evolution, change and cessation of its
benchmarks.
13.2
However the Baltic must also act responsibly and take account of the
outstanding open interest in the derivatives market as well as the usage
made of the route assessments and averages in the conclusion of long term
physical deals.
13.3
Minor changes which are unlikely to have an immediate material effect on

the rate reported but which are necessary to ensure clarity of reporting
arrangements, are approved by the Board and may be implemented at short
notice. There will be consultation in advance with the Users' Group, and if
considered necessary, meetings of the Users' Group may be arranged.
Meetings with the FFABA, or any other stakeholder group deemed relevant
by the Board, can be arranged. Panellists will always be included in the
consultation process.
13.4
Examples of minor changes include but are not limited to amendments to the
size of cargo lifted on a voyage route, usually because of ongoing changes
to vessel size and port maxima, as well as changes to laycan definitions
reflecting current market practice.
13.5
On occasions minor changes will be introduced in the form of guidance to

panellists which refines in some way the reporting requirement.
13.6
An emergency change may be introduced when there has been a

significant event in the market which renders the reporting of the current
route assessment impossible or meaningless. Examples which might give
rise to this situation include the outbreak of war, terrorism, civil unrest,
sanctions, and major accidents rendering ports inaccessible. However, these
examples should not in any way be taken as a prediction of the response of
the Baltic to any specific incident. An alternative to an emergency change will
always be simply to suspend the route. The Board has the final decision on
whether an emergency change is warranted, having taken such advice as it
considers necessary from the ex officio attendees and any others it
considers appropriate.
29
13.7
Scheduled changes are those which are considered necessary to ensure

benchmarks remain in line with the selection criteria set out in Section 5, and
which may have some level of impact on the absolute levels reported by
panellists, or where the impact is expected to be minor but is not certain.
This might include an adjustment to the vessel specification for a timecharter
route in response to the introduction of new regulations, or the suspension of
a route or index. The Baltic will introduce such changes with as much notice
as practical after consultation with the FFABA, FMIUG and panellists as
appropriate. However, the decision on the implementation of the change will
rest with the Baltic.
13.8
Major changes are acknowledged to have the potential to create serious

market disruption. These would include completely new vessel descriptions
or changes to routes where there is significant FFA and options open
interest.
13.9
It is the experience of the Baltic that major changes demand lengthy

consultation processes and detailed consideration of the impact on the open
interest in the derivatives market. Implementation plans are set out clearly in
advance so as to minimise market disruption. However, the Baltic will not
normally continue parallel reporting of a superseded vessel or route for a
period greater than two years. It will also restrict publication of new periods
for the forward curve beyond the two year threshold. This means that those
making use of the Baltic benchmarks in both physical and derivatives
markets must have mechanisms in place to ensure there is a smooth
transition from one benchmark to its replacement. Charter Parties covering
index-linked period business should provide for such transitions. Clearing
Houses making use of Baltic data for margining and settlement purposes
must also put in place suitable mechanisms to permit the management of
open interest at times of change to benchmarks.
30
14.
Code of Conduct
14.1
The duties of panellists and the Baltic are clearly set out in this document,
which constitutes a code of conduct for the production of Baltic benchmarks.
In addition all members of the Baltic Exchange are required to comply with
The Baltic Code which makes specific reference to Baltic panellists in the
section entitled The Baltic Code of Ethics and Market Practice as follows:
Brokers who act as Baltic panellists are required to pay careful attention to
the guidance offered by the Guide to Market Benchmarks. Impeccable
standards of honesty and integrity are critical to this role.
31
15.
Audits and Quality Control
15.1
The daily interaction between the SFR and the panellists is an important part
of the audit and quality control process.
15.2
In addition a major accounting firm conducts a review on a quarterly basis of

the calculation of the benchmarks by the Baltic computer system. It inputs
the raw data into a separate system and uses that to make the same
calculation. Such a review is also carried out whenever there is a change to
the index weightings or adjustment factors. This also serves to confirm that if
the Baltics systems were unavailable the accounting firm's computers could
be used to produce the results on an emergency basis. BEISL directors can
also request an ad hoc review when they feel such would be appropriate.
15.3
The accounting firm is required once a year to review this document to

ensure that is complies with the requirements of the IOSCO Principles for
Financial Benchmarks and to confirm that the Baltic is complying with the
processes and procedures set out in this document.
15.4
Finally each panellist is visited by the SFR each year and the following
review is conducted and documented.
a.
Market position. The Baltic will from time to time establish quantitative
criteria as a qualification for serving as a panellist. The criteria will
normally relate to the number of fixtures of the vessel type or route the
panellist has concluded in a preceding period. Alternatively the Baltic
may ask a panellist simply to provide information covering relevant
routes, such as how many fixtures have been concluded or
negotiations engaged in. In some cases it will suffice for the panellist to
confirm that their level of market activity exceeds a specific threshold
set by the SFR. The Baltic will treat all such information on a strictly
confidential basis. Any information provided to the Board will be in a
form which avoids any threat to the confidentiality of this data.
b.
Staff levels. Are there sufficient senior staff to ensure that the routes
agreed upon can be reported every index day?
c.
Has a senior staff member who is a Principal or Representative

member of the Baltic been nominated for each category of routes (eg
cape, panamax etc) as the responsible panellist?
d.
Confirm that no changes to the nature of the business have given rise
to new conflicts of interest and that the panellist company still meets all
32
the criteria for appointment.

e.
15.5
Confirm that the panellist has provided inputs on the agreed routes on
each index day and to note and explain any exception.
The accounting firm reviews the Baltic records each year to confirm that this
review process has been conducted with each panellist and the panellist has
been provided with a review letter, an example of which is shown at
Appendix 5.
33
16.
Complaints and Whistle-Blowing
16.1
Since the shipping market is an opaque market there are on any given day a
range of views of the value of each route assessed by the Baltic, which is
why the panel process is used. It is inevitable therefore that the process will
give rise to informal comment and, on occasions, more formal complaints.
a.
Informal comment
Informal comments will normally be received via email or telephone by
the SFR or the BEL Chief Executive. They will agree together how to
respond and whether any escalation of the comment is required. If they
feel the comment should be escalated then the chairman of BEISL
should be consulted and if deemed necessary, the comment and the
response can be reviewed at the next Board meeting.
If the informal comment is not resolved to the satisfaction of the
originator then they will be provided with information setting out how to
initiate a formal complaint if they wish. This procedure is set out below.
b.
Formal complaint
This should be addressed by email to complaint@balticexchange.com.
The email will automatically be copied on to both the BEL Chief
Executive and the Chairman. The Board will consider whether the
complaint has merit and what action if any should be taken. The
Chairman will send a response to the complainant outlining the position
of the Company and any action agreed upon. The complaint will be
treated in confidence, but must contain the full name and company
details of the originator as well as all available evidence to support the
complaint.
Any formal complaints received will be reported on to the Board at its
next meeting.
c.
"Whistle-Blowing"
The Baltic Exchange Ltd and its affiliates have been producing market
benchmarks since 1985 and although there has never been any
suggestion of serious irregularity, it is appropriate to ensure that
anyone with knowledge of such irregularity has the opportunity to
report it on a confidential basis at the highest possible level. The
primary recipient for any such whistle-blowing should be the BEL
Chief Executive. If the whistle-blower does not wish to make use of this
route then the Chairman of BEISL is an alternative. Failing him then
the Chairman of the Baltic Exchange Ltd is also able to receive such
34
information. For reasons of confidentiality and to ensure the approach

is not missed, the preferred way of approaching the matter is by
telephone.
All three of these individuals are aware of the need to deal promptly
and vigorously with such matters and to protect the interest and identity
of the complainant in all circumstances. They will record in writing
details of both the initial contact from the whistle-blower and any
subsequent contact. Any details of the whistle-blower and the nature of
the concern will be kept strictly confidential.
A whistle-blower may make a complaint on an anonymous basis.
However, it will always be easier to investigate the matter if the details
of the initiator are known.
35
APPENDIX 1
Assessment times and reporting windows
Data Group
Assessment Time
Reporting Window
Capesize
1030
1030-1045
Panamax
1230
1230-1245
Supramax
1230
1230-1245
Handysize
1230
1230-1245
Tanker routes
1530
1530-1545
BFA
1630
1630-1645
BES/BEP Asia
1230
1230-1245 (Singapore time)
BITRA Asia
1530
1530-1545 (Singapore time)
Sale and Purchase and Demolition assessments are assessed for the previous Friday
and reported to the Baltic by 1530 each Monday.
Current Index Route Definitions
The following definitions cover the timecharter and voyage routes and vessel
descriptions currently reported by the Baltic. It also sets out the basis for certain
calculated results provided by the Baltic, including indices, timecharter averages and
timecharter equivalents (TCE).
The Baltic Dry Index
The Baltic Dry Index (BDI) is the successor to the Baltic Freight Index (BFI) and came
into operation on 1 November 1999. Since 1 July 2009, the index is a composite of
the Capesize, Panamax, Supramax and Handysize Timecharter Averages.
The calculation until 30 June 2009 was based on an equally weighted average of the
BCI, BPI, BHSI and the BSI index. The BDI continues the established time series of
the BFI, introduced in 1985. However, users of the index should note that the
voyages and vessels covered by the index have changed a great deal so caution
should be exercised in assuming long term consistency of the data.
For the creation of BDI we now use the following formula:
((Capesize 2014 TCavg + PanamaxTCavg + SupramaxTCavg + HandysizeTCavg)/ 4) * 0.110345333)
Where TCavg = Time charter average.

The multiplier was first applied when the BDI replaced BFI, and has changed over the
years as the contributing indices and the methods of calculation have been modified.
The multiplier was last updated on 6 May 2014.
36
Baltic Exchange Capesize 2014 Index (BCI)

The Baltic capesize 2014 vessel is based on the following description:
180,000mt dwt on 18.2m SSW draft
Max age 10 yrs
LOA 290m, beam 45m, TPC 121
198,000cbm grain
14 knots laden/15 knots ballast on 62mt fuel oil (380cst), no diesel at sea
When considering the prevailing timecharter market rate for the Baltic capesize
vessel, panellists should assume that, if steaming at 12 knots laden or 13 knots
ballast, the vessel will consume 43mt fuel oil (380cst), no diesel at sea.
Routes
C2
Tubarao to Rotterdam. 160,000lt iron ore, 10% more or less in owners option, free
in and out. Laydays/cancelling 20/35 days from index date. 6 days, Sundays +
holidays included all purposes. 6 hrs turn time at loading port, 6 hrs turn time at
discharge port, 0.5% in lieu of weighing. Freight based on long tons. Age max 18
yrs. 3.75% total commission.
C3
Tubarao to Qingdao. 160,000mt or 170,000mt iron ore, 10% more or less in owners
option, free in and out. Laydays/cancelling 20/35 days from index date. Scale
load/30,000mt Sundays + holidays included discharge. 6 hrs turn time at loading
port, 24 hrs turn time at discharge port. Age max 18 yrs. 3.75% total commission.
C4
Richards Bay to Rotterdam. 150,000mt coal, 10% more or less in owners option,
free in and out, trimmed. Laydays/cancelling 25/40 days from index date. Scale
load/25,000mt Sundays + holidays included discharge. 18 hrs turn time at loading
port, 12 hrs turn time at discharge port. Age max 15 yrs. 3.75% total commission.
C5
West Australia to Qingdao. 160,000mt or 170,000mt iron ore, 10% more or less in
owners option, free in and out. Laydays/cancelling 10/20 days from index date.
Scale load/30,000mt Sundays + holidays included discharge. 6 hrs turn time at
loading port, 24 hrs turn time at discharge port. Age max 18 yrs. 3.75% total
commission.
37
C7
Bolivar to Rotterdam. 150,000mt coal, 10% more or less in owners option, free in
and out, trimmed. Laydays/cancelling 20/35 days from index date. 50,000mt
Sundays + holidays included load, 25,000mt Sundays + holidays included
discharge. 12 hrs turn time at loading port, 12 hrs turn time at discharge port. Age
max 15 yrs. 3.75% total commission.
C8_14
Delivery Gibraltar-Hamburg range, laydays/cancelling 3/10 days from index date,
transatlantic round voyage, redelivery Gibraltar-Hamburg range, duration 30-45
days. Basis the Baltic capesize 2014 vessel. 5% total commission.
C9_14
Delivery Amsterdam-Rotterdam-Antwerp range or passing Passero,
laydays/cancelling 3/10 days from index date, redelivery China-Japan range,
duration about 65 days. Basis the Baltic capesize 2014 vessel. 5% total
commission.
C10_14
Delivery China-Japan range, laydays/cancelling 3/10 days from index date,
redelivery China-Japan range, duration 30-40 days. Basis the Baltic capesize 2014
vessel. 5% total commission.
C14
Delivery Qingdao spot or retroactive up to a maximum 15 days after sailing
from Qingdao, round voyage via Brazil, redelivery China-Japan range, duration
80-90 days. Basis the Baltic capesize 2014 vessel. 5% total commission.
C15
Richards Bay to Fangcheng. 160,000mt coal, 10% more or less in owners
option, free in and out, trimmed, scale load / 30,000mt Sundays + holidays
included discharge. 18 hrs turn time at loading port, 24 hrs turn time at
discharge port. Laydays/cancelling 25/35 days from index date. Age max 15
yrs. 5% total commission.
C16
Delivery North China-South Japan range, 3-10 days from index date for a trip
via Australia or Indonesia or US west coast or South Africa or Brazil,
redelivery UK-Cont-Med within Skaw-Passero range, duration to be adjusted to
65 days. Basis the Baltic capesize 2014 vessel. 5% total commission.
C17
Saldanha Bay to Qingdao. 170,000mt iron ore 10% more or less in owners
option, free in and out trimmed. Laydays/cancelling 20/30 days from index
date. 90,000 Sundays + holidays included load / 30,000 Sundays + holidays
included discharge. 18 hrs turntime at loading port, 24 hrs turntime at
discharge port. Max age 18 yrs. 5 % total commission. (This route does not
contribute to the BCI.)
38
39
Applicable weightings for the calculation of the timecharter average value:

C8_14
25%
C9_14
12.5%
C10_14
25%
C14_14
25%
C16_14
12.5%
The data below shows the calculation of the superseded 4 Timecharter Average for
the 172,000 DWT Capesize ship which was the Baltic Standard until 2 May 2014.
Route definitions:
C8_03
Delivery Gibraltar-Hamburg range, laydays/cancelling 3/10 days from index date, transatlantic
round voyage, redelivery Gibraltar-Hamburg range, duration 30-45 days. Basis the Baltic
172,000dwt vessel. 3.75% total commission.
C9_03
Delivery Amsterdam-Rotterdam-Antwerp range or passing Passero, laydays/cancelling 3/10
days from index date, redelivery China-Japan range, duration about 65 days. Basis the Baltic
172,000dwt vessel. 3.75% total commission.
C10_03
Delivery China-Japan range, laydays/cancelling 3/10 days from index date, redelivery ChinaJapan range, duration 30-40 days. Basis the Baltic 172,000dwt vessel. 3.75% total
commission.
C11_03
Delivery China-Japan range, 3-10 days from index date for a trip with redelivery AmsterdamRotterdam-Antwerp range or passing Passero, duration about 65 days. Basis the Baltic
172,000 dwt vessel. 3.75% total commission.
BCI 172,000 dwt timecharter average value calculation

C8_03
25%
C9_03
25%
C10_03
25%
C11_03
25%
Baltic Exchange Panamax Index (BPI)
40
The Baltic panamax vessel is based on the following description:
Max age 12 yrs
LOA 225m, beam 32.2m
89,000cbm grain
14 knots on 32mt fuel oil (380cst) laden/28mt fuel oil (380cst) ballast, no
diesel at sea.
Routes
P1A_03
Delivery Skaw-Gibraltar range, loading 15-20 days from index date, transatlantic
round voyage, including east coast South America, redelivery Skaw-Gibraltar
range, duration 45-60 days. Basis the Baltic panamax vessel. Cargo basis grain,
ore, coal or similar bulk harmless cargo. 3.75% total commission.
P2A _03
Delivery Skaw-Gibraltar range, loading 15-20 days from index date, for a trip via
east coast South America, US Gulf or US east coast to Asia, redelivery TaiwanJapan range, duration 60-65 days. Basis the Baltic panamax vessel. Cargo basis
grain, ore, coal or similar bulk harmless cargo. 3.75% total commission.
P3A _03
Delivery Japan-South Korea range, loading 15-20 days from index date,
transpacific round voyage, either via Australia or Pacific (not including short
rounds such as Vostochny to Japan), redelivery Japan-South Korea range,
duration 35-50 days. Basis the Baltic panamax vessel. Cargo basis grain, ore, coal
or similar bulk harmless cargo. 3.75% total commission.
P4 _03
Delivery Japan-South Korea range, loading 15-20 days from index date, for a trip
via US west coast- British Columbia range or Australia, redelivery Skaw-Passero
range, duration 50-60 days. Basis the Baltic panamax vessel. Cargo basis grain,
petroleum coke, coal or similar bulk harmless cargo. 3.75% total commission..
Applicable weightings for the calculation of the timecharter average values:

P1A_03
25%
P2A_03
25%
P3A_03
P4A_03
25%
25%
Baltic Exchange Panamax (BEP) Asia
41
The Baltic panamax vessel is based on the following description:
Max age 12 yrs
LOA 225m, beam 32.2m
89,000cbm grain
14 knots on 32mt fuel oil (380cst) laden/28mt fuel oil (380cst) ballast, no
diesel at sea.
Routes
P5
Delivery South China (Fuzhou-Hong Kong range) or passing Taipei southbound,
laydays/cancelling 5/10 days from index date, for a trip via Indonesia, redelivery
South China (Fuzhou-Hong Kong range), duration 20-25 days. Basis the Baltic
panamax vessel. Cargo basis coal. 5% total commission.
42
Baltic Exchange Supramax Index (BSI)

The Baltic supramax vessel is based on a standard "Tess 52" type
vessel of the following description:
Max age 15 yrs
LOA 189.99m, beam 32.26m
67,756cbm grain, 65,600cbm bale
5 holds, 5 hatches
4 x 30mt cranes with 12cbm grabs
sea
14 knots laden/14.5 knots ballast on 30mt fuel oil (380cst), no diesel at
Routes
S1A
Delivery Antwerp-Skaw range, laydays/cancelling 5/10 days from
index date, redelivery Singapore-Japan range (including China),
duration 60-65 days. Basis the Baltic supramax vessel. 5% total
commission.
S1B
Delivery passing Canakkale, laydays/cancelling 5/10 days from index
date, redelivery Singapore-Japan range (including China), duration
50-55 days. Basis the Baltic supramax vessel. 5% total commission.
S2
Delivery South Korea-Japan range, laydays/cancelling 5/10 days from
index date, for an Australian or transpacific round voyage, redelivery
South Korea-Japan range, duration 35-40 days. Basis the Baltic
supramax vessel. 5% total commission.
S3
Delivery South Korea-Japan range, laydays/cancelling 5/10 days from
index date, redelivery Gibraltar-Skaw range, duration 60-65 days.
Basis the Baltic supramax vessel. 5% total commission.
S4A
Delivery US Gulf, laydays/cancelling 5/10 days from index date,
redelivery Skaw-Passero range, duration about 30 days. Basis the
43
Baltic supramax vessel. 5% total commission.
S4B
Delivery Skaw-Passero range, laydays/cancelling 5/10 days from
index date, redelivery US Gulf, duration about 30 days. Basis the
Baltic supramax vessel. 5% total commission.

S1A
12.5%
S1B
12.5%
S2
25%
S3
25%
S4A
12.5%
S4B
12.5%
S5
Delivery west Africa (Dakar-Douala range), laydays/cancelling 5/10 days from index date,
trip via east coast South America, redelivery north China (Shanghai-Dalian range), duration
60-65 days. Basis the Baltic supramax vessel. 5% total commission.
This route does not contribute to the BSI or TC average.
S9
Delivery west Africa (Dakar-Douala range), laydays/cancelling 5/10 days from index date,
trip via east coast South America, redelivery Skaw-Passero range, duration 45-50 days. Basis
the Baltic supramax vessel. 5% total commission.
This route does not contribute to the BSI or TC average.
44
Baltic Exchange Supramax (BES) Asia Index

The Baltic supramax vessel is based on a standard "Tess 52" type vessel of
the following description:
Max age 15 yrs
LOA 189.99m, beam 32.26m
5 holds, 5 hatches
4 x 30mt cranes with 12cbm grabs
14 knots laden/14.5 knots ballast on 30mt fuel oil (380cst), no diesel at sea
Routes
S8
Delivery South China (Fuzhou-Fangcheng range including Taiwan), laydays/cancelling 5/10
days from index date, trip via Indonesia, redelivery east coast India (Chennai-Paradip
range), duration 20-25 days. Basis the Baltic supramax vessel. Cargo basis coal. 5% total
commission.
S10
Delivery South China (Fuzhou-Fangcheng range including Taiwan), laydays/cancelling 5/10
days from index date, trip via Indonesia, redelivery South China (Fangcheng-Fuzhou
range), duration 20-25 days. Basis the Baltic supramax vessel. Cargo basis coal. 5% total
commission.
S11
Delivery China (Changjiangkou (CJK)-Ningde range), laydays/cancelling 5/10 days
from index date, for an Australian or transpacific round voyage, redelivery full
China, duration 35-50 days. Basis the Baltic supramax vessel. Cargo basis coal,
grain or similar bulk harmless cargo. 5% total commission.

S8
33.33%
S10
33.33%
45
S11
33.33%
46
Baltic Exchange Handysize Index (BHSI)

The Baltic Exchange handysize vessel is based on the following vessel
description:
Max age 15 yrs
LOA 169m, beam 27m
5 holds, 5 hatches
4 x 30mt cranes
14 knots average laden/ballast on 22mt fuel oil (380cst), no diesel at sea
Routes
HS1
Delivery Skaw-Passero range, laydays/cancelling 5/10 days from index date,
redelivery Recalada-Rio de Janeiro range, duration 35-45 days. Basis the Baltic
handysize vessel. 5% total commission.
HS2
Delivery Skaw-Passero range, laydays/cancelling 5/10 days from index date,
redelivery Boston-Galveston range. Duration 35-45 days. Basis the Baltic
HS3
Delivery Recalada-Rio de Janeiro range, laydays/cancelling 5/10 days from index
date, redelivery Skaw-Passero range, duration 35-45 days. Basis the Baltic
HS4
Delivery US Gulf, laydays/cancelling 5/10 days from index date, for a trip via US
Gulf or north coast South America, redelivery Skaw-Passero range, duration 35-45
days. Basis the Baltic handysize vessel. 5% total commission.
HS5
Delivery South East Asia, laydays/cancelling 5/10 days from index date, trip via
Australia, redelivery SingaporeJapan range including China, duration 25-30 days.
Basis the Baltic handysize vessel. 5% total commission.
47
HS6
Delivery South Korea-Japan range, laydays/cancelling 5/10 days from index date,
trip via North Pacific, redelivery Singapore-Japan range including China, duration
40-45 days. Basis the Baltic handysize vessel. 5% total commission.

HS1
12.5%
HS2
12.5%
HS3
12.5%
HS4
12.5%
HS5
25%
HS6
25%
48
Baltic Exchange Dirty Tanker Index (BDTI)

TD1
280,000mt. Middle East Gulf to US Gulf (Ras Tanura to Louisiana Offshore Oil
Port (LOOP)). Laydays/cancelling 20/30 days from index date. Age max 20 yrs.
2.5% total commission.
TD2
270,000mt. Middle East Gulf to Singapore (Ras Tanura to Singapore).
Laydays/cancelling 20/30 days from index date. Age max 20 yrs. 2.5% total
commission.
TD3
265,000mt. Middle East Gulf to Japan (Ras Tanura to Chiba).
commission.
TD4
260,000mt. West Africa to US Gulf. Bonny Offshore Terminal to (Louisiana
Offshore Oil Port (LOOP)). Laydays/cancelling 15/25 days from index date. Age
TD6
135,000mt. Black Sea to Mediterranean (Novorossiyk to Augusta).
commission.
TD7
80,000mt. North Sea to Continent (Sullom Voe to Wilhelmshaven).
commission.
TD8
80,000mt crude and/or DPP, heat 135F. Kuwait to Singapore (Mena al Ahmadi
to Singapore). Laydays/cancelling 20/25 days from index date. Double hull, age
TD9
70,000mt. Caribbean to US Gulf (Puerto La Cruz to Corpus Christi).
Laydays/cancelling 7/14 days from index date. Age max 20 yrs. Assessment
basis Oil Pollution Act premium paid. 2.5% total commission.
49
TD12
55,000mt fuel oil. Amsterdam-Rotterdam-Antwerp range to US Gulf (Antwerp to
Houston). Laydays/cancelling 15/20 days from index date. Double hull, age
TD14
80,000mt. South East Asia to east coast Australia (Seria to Sydney).
Laydays/cancelling 21/25 days from index date. Double hull, age max 15 yrs.
TD15
260,000mt. West Africa to China (Serpentina FPSO and Bonny Offshore
Terminal to Ningpo). Laydays/cancelling 20/30 days from index date. Double
hull, age max 20 yrs. 2.5% total commission.
TD17
100,000mt. Baltic to UK-Cont (Primorsk to Wilhelmshaven), Great Belt
laden/ballast. Laydays/cancelling 10/20 days from index date. Double hull, age
TD18
30,000mt fuel oil. Baltic to UK-Cont (Tallinn to Rotterdam). Laydays/cancelling
10/15 days from index date. Double hull, age max 15 yrs. 2.5% total
commission.
TD19
80,000mt. Cross Mediterranean (Ceyhan to Lavera). Laydays/cancelling 10/15
days from index date. Age max 20 yrs. 2.5% total commission.
TD20
130,000mt. West Africa to UK-Continent (offshore terminal Bony) to Rotterdam.
Laydays/cancelling 15-20 days from the index date. Age max 20 years.
82,000grt. 2.5% total commission.
TD21
50,000mt fuel oil, Caribbean to US Gulf (Mamonal to Houston),
laydays/cancelling 7/14 days from index date. Double hull, age max 20 yrs.
50
Time Charter Equivalents

Time Charter Equivalent (TCE) assessments for dirty tankers are made up of average
dollar pricing conversions for Very Large Crude Carriers (VLCCs), Suezmax and
Aframax tankers derived from a range of routes already reported on by the Baltic
Exchange and expressed in Worldscale. In addition, TCE assessments for individual
routes are also reported.
VLCC
The published VLCC time charter equivalent is an average of the rates derived from
TD1 and TD3.
Suezmax
The published Suezmax time charter equivalent is an average of the rates derived
from TD6 and TD20.
Aframax
The published Aframax time charter equivalent is an average of the rates derived
from TD7, TD8, TD9, TD14, TD17 and TD19.
Individual Routes
Time charter equivalent assessments are published for the following individual dirty
tanker routes:
TD1, TD3, TD6, TD7, TD8, TD9, TD11, TD14, TD17 and TD20
The TCEs are calculated using a variable feed of bunker prices supplied by
Bunkerworld. Variable exchange rates supplied under licence by XE.com are also
used for adjusting port costs. Port charges used in this calculation are provided under
licence by Cory Brothers.
51
Baltic Exchange Clean Tanker Index (BCTI)

TC1
75,000mt CPP/naphtha condensate. Middle East Gulf to Japan (Ras Tanura to
Yokohama). Laydays/cancelling 30/35 days from index date. Age max 12 yrs.
TC2_37
37,000mt CPP/UNL. Continent to US Atlantic coast (Rotterdam to New York).
commission.
TC5
55,000mt CPP/UNL naphtha condensate. Middle East Gulf to Japan (Ras
Tanura to Yokohama). Laydays cancelling 30/35 days from index date. Age
TC6
30,000mt CPP/UNL. Algeria to European Mediterranean (Skikda to Lavera).
Laydays cancelling 7/14 days from index date. Age max 15 yrs. 3.75% total
commission.
TC8
65,000mt CPP/UNL middle distillate. Middle East Gulf to UK-Cont (Jubail to
Rotterdam). Laydays/cancelling 20/30 days from index date. Double hull, age
max 15 yrs. This route to be reported as US$ per mt. 3.75% total commission.
TC9
22,000mt CPP/UNL/ULSD middle distillate. Baltic to UK-Cont (Primorsk to Le
Havre). Laydays/cancelling 5/10 days from index date. Double hull, age max 15
yrs. 3.75% total commission.
TC14
38,000mt CPP/UNL/diesel. US Gulf to Continent (Houston to Amsterdam).
commission.
Note: All vessels reported to have major oil company approval.
52
Time Charter Equivalent Calculations (TCEs)

Time Charter Equivalent (TCE) assessments for clean tankers are made up of
average dollar pricing conversions for Medium Range (MR) Product tankers derived
from a range of routes already reported on by the Baltic Exchange and expressed in
Worldscale. In addition, TCE assessments for individual routes are also reported.
TCE Calculations for clean tankers

MR Atlantic Triangulation
TC2_37 TCE in combination with TC14 TCE
Rotterdam to New York, ballast to Houston for voyage Houston to Amsterdam re
positioning at Rotterdam
Individual Routes
TCE equivalent assessments are published for the following individual clean tanker
routes:
TC1, TC2_37, , TC5 and TC14 with, TC4, TC7, TC10, TC11 (Asia reported), TC12
(Asia reported) and TC14.
The TCEs are calculated using a variable feed of bunker prices supplied by
Bunkerworld. Variable exchange rates supplied under licence by XE.com are also
used for adjusting port costs. Port charges used in this calculation are provided under
licence by Cory Brothers.
53
Baltic Exchange International Tanker Routes Asia

TC4
30,000mt CPP/UNL. Singapore to Japan (Singapore to Chiba).
commission.
TC7
30,000mt CPP. Singapore to east coast Australia (Singapore to Sydney).
Laydays/cancelling 17/23 days from index date. Double hull, age max 15 yrs.
TC10
40,000mt CPP/UNL. South Korea to west coast North Pacific (South Korea to
Vancouver Rosarito range). Laydays/cancelling 14/21 days from index date.
Double hull, age max 15 yrs. 3.75% total commission.
TC11
40,000mt CPP. South Korea to Singapore. Laydays/cancelling 10/17 days from
index date. Oil major approved, double hull, age max 15 yrs. 3.75% total
commission.
TC12
35,000mt naphtha condensate. West coast India to Japan (Sikka (Jamnagar) to
Chiba). Laydays/cancelling 7/14 days from index date. Oil major approved,
double hull, age max 15 yrs. 3.75% total commission.
Note: All vessels reported to have major oil company approval.
54
Time Charter Equivalent Calculations (TCE)
Individual Routes
Time charter equivalent assessments are published for the following individual BITRAsia tanker routes:
TC4, TC7, TC10, TC11 and TC12
MR Pacific Triangulation
TC12 TCE in combination with TC11 TCE
Sikka-Jamnagar to Chiba, ballast to Yeosu for voyage Yeosu to Singapore repositioning in Sikka.
We utilise our standard MR as on all our MR TCEs.

47,000mt dwt, double hull
27,500 grt
14.5 knots on 30mt IFO (380 CST) ballast
14.5 knots on 36mt IFO (380 CST) laden
In port consumption:
2 days loading 5mt IFO per day
2 days discharging 12mt IFO per day
1 days waiting at anchorage 5mt IFO per day.
55
Baltic Liquefied Petroleum Gas (BLPG)

44,000mt, 5% more or less in owners option, 1 to 2 grades, fully refrigerated
liquefied petroleum gas, Laydays/cancelling 10/40 days from index date.
Middle East Gulf to Japan (Ras Tanura to Chiba). Laytime 96 hrs total. Age
56
Baltic Exchange Sale and Purchase Assessments (BSPA)

The assessments on which the panellists report are:
1.
VLCC
305,000mt dwt double hull built in first class competitive yard, European
standard B&W main engine. LOA 332m, beam 58m, 15.5 knots service
speed laden on 90mt fuel oil. Non coated. Not ice classed. 5 years old.
Special survey passed. Delivery 2-3 months, charter free. 2% total
commission.
2.
Aframax
105,000mt dwt double hull built in first class competitive yard, European
standard B&W main engine. LOA 248m, beam 42m, 15.5 knots service
speed laden on 50mt fuel oil. Non-coated. Not ice classed. 5 years old.
Special survey passed. Delivery 2-3 months, charter free. 2% total
commission.
3.
MR Tanker
51,000mt dwt on 13.2m draft SSW. Double hull built in first class competitive
yard, European standard B&W main engine. LOA 183m, beam 32.2m, 13.5
knots service speed on 31/28mt fuel oil (laden/ballast). Coated, IMO 2/3,
deep well. Not ice classed. 5 years old. Special survey passed. Delivery 2-3
months, charter free. 2% total commission.
4.
Capesize
172,000mt dwt on 17.75m draft SSW built in first class competitive yard.
LOA 289m, beam 45m, 190,000cbm grain. 14.5 knots laden and 15 knots
ballast on 56mt fuel oil, no diesel at sea. Not ice classed. 5 years old. Special
survey passed. Delivery 2-3 months, charter free. 2% total commission.
5.
Panamax
74,000mt dwt on 13.95m draft SSW built in first class competitive yard.
LOA 225m, beam 32.2m, 89,000cbm grain. 14 knots on 32/28mt fuel oil
(laden/ballast) and no diesel at sea. Not ice classed. 5 years old. Special
survey passed. Delivery 2-3 months, charter free. 2% total commission.
6.
Mitsui 56 type Supramax

56,052mt dwt on 12.575m draft SSW built in first class competitive yard European standard B&W main engine. LOA 189.99m, beam 32.26m,
70,810cbm grain. 5 holds/hatches, 4 x 30mt cranes with 4 x 12cbm grabs.
Not ice classed. 5 years old. Special survey passed. Delivery 2-3 months,
charter free. 2% total commission.
57
Baltic Exchange Demolition Assessments (BDA)

The assessments on which the panellists report are:
1.
Dirty tanker, China. One light displacement long ton scrap between 15,000
and 25,000 light weight, gas free for man entry. Delivery China 15-30 days
from index date, as is, under own power, cash price. Total commission 2%.
2.
Dirty tanker, Pakistan-Bangladesh range. One light displacement long ton

scrap between 15,000 and 25,000 lightweight, gas free for man entry.
Delivery Pakistan-Bangladesh range 15-30 days from index date, as is,
under own power, cash price. Total commission 3%.
3.
Product tanker, China. One light displacement long ton between 6,000 and
10,000 light weight, gas free for man entry. Delivery China 15-30 days from
index date, as is, under own power, cash price. Total commission 2%.
4.
Product tanker, Pakistan-Bangladesh range. One light displacement long

ton scrap between 6,000 and 10,000 light weight, gas free for man entry.
Delivery Pakistan-Bangladesh range 15-30 days from index date, as is,
5.
Bulk carrier, China. One light displacement long ton scrap between 7,000
and 12,000 light weight. Delivery China 15-30 days from index date, as is,
6.
Bulk carrier, Pakistan-Bangladesh range. One light displacement long ton

scrap between 7,000 and 12,000 light weight. Delivery Pakistan-Bangladesh
range 15-30 days from index date, as is, under own power, cash price. Total
commission 3%.
58
APPENDIX 2
Details of Index Calculations
1.
Each route assessment (or sales & purchase and demolition assessment) is
created by calculating an average of ALL of the panellist inputs provided to
the Baltic.
2.
From the various route assessments provided the Baltic calculates and
publishes the following derived rates.
BCI 2014
The Capesize Index is calculated using a combination of the rates for each of the
reported routes and multipliers as follow. Full route descriptions are in Appendix 1
Route
Description
Weighting (on
10 April 2014)
C2
160,000 ore Tubarao/Rotterdam
5%
C3
160-170,000 ore Tubarao/Qingdao
15%
C4
150,000 coal Richards Bay/Rotterdam
5%
C5
160-170,000 W Aussie/Qingdao
15%
C7
150,000 coal Bolivar/Rotterdam
5%
C8_14
Trans Atlantic round voyage
5%
C9_14
ARA or Passero trip China-Japan (fronthaul)
7.5%
C10_14
Pacific round voyage
15%
C14
China / Brazil round voyage
15%
C15
160,000 coal , Richards Bay/China
5%
C16
Qingdao-Beilun trip UK-Cont-Med 65 days
7.5%
59
Capesize
2014
Calculation
detail
Route
Multiplier
Route value
Index contribution
C2
10.276695630
7.572000000
77.815139310
C3
14.474995240
19.118000000
276.732958998
C4
10.178191930
7.985000000
81.272862561
C5
34.242287860
7.450000000
255.105044557
C7
10.096625310
9.140000000
92.283155333
C15
6.567770448
12.955000000
85.085466154
C8_14
0.011232800
11430
128.390904000
C9_14
0.005011588
25955
130.075766540
C10_14
0.019386696
11468
222.326629728
C14
0.020572868
11668
240.044223824
C16
0.087405223
-1814
-158.553074522
Sum
1430.579076484
Index
1430.579076484
Rounded Index
Cape TC Avg
Cape TC
Rounded
1431
11659.125000000
$11,659
60
Panamax (BPI)
The Baltic Exchange Panamax Index is calculated using a combination of the rates
for each of the reported routes and multipliers as follow. Full descriptions of the routes
are shown in Appendix 1.
Route
Description
Weighting
P1A_03
Trans Atlantic round voyage
25%
P2A_03
Continent-Mediterranean trip to China-Japan
25%
P3A_03
Trans Pacific round voyage
25%
P4_03
China-Japan trip to Continent-Mediterranean
25%
In addition to the Panamax Time Charter Average an index figure basis 1000 in 1998
is also published.
Route
Multiplier
Route Value
Index Contribution
P1A_03
0.032280358
17308.000000000
558.708436264
P2A_03
0.031407559
24446.000000000
767.789187314
P3A_03
0.030123107
11303.000000000
340.481478421
P4_03
0.029755057
1923.000000000
57.218974611
1724.198076610
1724.198076610
1724
61
Panamax P3A-IV implied voyage calculation

The Baltic derives from the Panamax P3A TC route an implied voyage rate for use as
required in commercial transactions. This is defined and calculated as shown below.
Route
Delivery Japan/South Korea range (specifically Pusan used) laydays cancelling 15/20
days ahead in the loading area, for a time charter round trip of 35/50 days with a
cargo of coal.
Vessel
The standard "Baltic Type" panamax vessel
Implied voyage equivalent
72,000mt coal loading 1 safe berth Newcastle NSW and discharging 1 safe berth
Qingdao.
25,000mt Sundays + holidays included load and 15,000mt Sundays + holidays
included discharge 12 hours turn time both ends.
The calculation includes a 7% weather margin and bunkers based on Pusan.
Freight is net of commission and per metric tonne, free in and out and spout trimmed.
Implied P3A calculation process
The implied voyage equivalent is calculated as the US dollar amount per metric tonne
that results from adding the net amount of hire received for the total duration of the
voyage to the total voyage expenses divided by the cargo intake.
Voyage expenses
Ballast and laden days are calculated. The ballast days are derived by deducting a
weather factor (7%) off the ballast speed of 14.0 knots and dividing the result into the
distance Pusan to Newcastle (4,464 miles) and dividing that result by 24 hours.
The laden days are derived by deducting a weather factor (7%) off the laden speed of
14.0 knots and dividing the result into the distance Newcastle to Qingdao (4,733
miles) and dividing that result by 24 hours.
The next step is to establish the bunker costs
For the trip's IFO (Intermediate Fuel Oil) ballast consumption, the ballast days
(14.29) are multiplied by the daily IFO ballast consumption (28mt per day).
For the trip's IFO (Intermediate Fuel Oil) consumption while loading, the
loading port days (3.38 ) are multiplied by the daily IFO loading consumption
(3mt per day) and for the MDO (Marine Diesel Oil) consumption the loading
port days (3.38) are multiplied by the daily MDO consumption (0.1mt per day).
For the trip's IFO laden consumption, the laden days (15.15) are multiplied by
the daily IFO laden consumption (32mt per day). For the trip's IFO
62
consumption while discharging, the discharging port days (5.3) are multiplied
by the daily IFO discharging consumption (3mt per day), and for the MDO
(Marine Diesel Oil) consumption the discharging port days (5.3) are multiplied
by the daily MDO consumption (0.1mt per day).
Adding the results from the calculations described above generates the trip's
total IFO and MDO consumption. These figures are then multiplied by the IFO
and MDO market prices per mt (based on Pusan and supplied by
Bunkerworld), which produces the total IFO and MDO cost for the trip.
A further allowance of US $15,000 is added for miscellaneous

expenses/cleaning.
The voyage expenses are then calculated as the sum of the total IFO cost, the total
MDO cost and miscellaneous charges, the load port charges (Newcastle) and the
discharge port charges (Qingdao). These port figures are provided in US $. However,
when received in local currencies, the foreign exchange rates are sourced from
XE.com.
All port cost related information is provided by Cory Brothers Shipping. Qingdao
includes tonnage dues.
Distances are provided by Netpas.
Bunker prices provided by Bunkerworld.
63
Duration
The total voyage days are the sum of ballast (14.29) + loading (3.38) + laden (15.15)
+ discharging (5.3).
Total 38.11 (rounded) days.
Net hire
Taking the total estimated duration of the voyage (38.11 days) and multiplying it by
the time charter rate route assessment published on route P3A less 3.75%
commission.
Please note that the calculation takes place using seven decimal places and is only
rounded at the end.
Implied voyage rate
Dividing the product of the Net Hire and Total Voyage Expenses by the estimated
cargo intake of 72,000mt
Distances used in this calculation are provided by Netpas (www.netpas.net)
Bunker prices used in this calculation are provided under licence by Bunkerworld
(www.bunkerworld.com)
All port cost related information is provided by Cory Brothers Shipping
(www.cory.co.uk)
To view the implied route port cost rates go to: www.balticexchange.com/marketinformation/indices/bpi-documents/
64
Supramax (BSI)
The Baltic Exchange Supramax Timecharter Average is calculated as a weighted
average of the rates for each of the reported routes as follows. Full descriptions of the
routes are shown in Appendix 4 below.
Route
Description
Weighting
S1A
Continent trip Singapore-Japan inc China
12.5%
S1B
Black Sea trip Singapore-Japan inc China
12.5%
S2
Trans Pacific round voyage
25%
S3
South Korea-Japan trip Europe
25%
S4A
US Gulf trip Europe
12.5%
S4B
Europe trip US Gulf
12.5%
The following routes are not a component part for calculating the BSI or TC average.
S5
W Africa trip via ECSA to Singapore-Japan
0%
S9
W Africa trip via ECSA to Skaw-Passero
0%
In addition to the Supramax Time Charter Average, an index figure basis 1000 in
2005 is also published, which began at 1000 as the Baltic Handymax Index (BHI) on
7 January 1997. When the vessel size increased this was renamed the BHMI on 2
September 2000. It became the BSI on 1 July 2005. The index is calculated using a
combination of the rates for the reported routes and multipliers as follow. Routes S5
and S9 do not contribute.
65
Supramax Index
Multiplier
0.095637068
Route
Route Multiplier
Route Average
Index
Contribution
S1A
0.125000000
21529.000000000
2691.125000000
S1B
0.125000000
19667.000000000
2458.375000000
S2
0.250000000
7763.000000000
1940.750000000
S3
0.250000000
4458.000000000
1114.500000000
S4A
0.125000000
29688.000000000
3711.000000000
S4B
0.125000000
8306.000000000
1038.250000000
12954.000000000
1238.882578872
1239
Baltic Exchange Supramax Asia (BES Asia)

The Baltic Exchange Supramax Asia Timecharter Average is the average of the rates
for each of the reported routes as follows. Full descriptions of the routes are shown in
Appendix 1.
Route
Description
Weighting
S8
China/Indonesia trip to EC India
33.33%
S10
N.China/Indonesia round voyage
33.33%
S11
Mid-China/Australia or transpacific round voyage 33.33%
66
Handysize (BHSI)
The Baltic Exchange Handysize Index is calculated as a weighted average of the
rates for each of the reported routes as follows, with the weightings as shown. Full
descriptions of the routes are shown in Appendix 1.
Route
Description
Weighting
HS1
Europe trip east coast South America
12.5%
HS2
Europe trip east coast North America
12.5%
HS3
East coast South America trip Europe
12.5%
HS4
US Gulf trip Europe
12.5%
HS5
South East Asia, trip via Australia to Singapore/
25%
Japan inc China

HS6
South Korea/Japan trip via north Pacific to
25%
Singapore/Japan inc China
Route
Multiplier
Route value
Index
Contribution
HS1
0.011479686
9825.000000000
112.787914950
HS2
0.009901618
8000.000000000
79.212944000
HS3
0.006995497
15025.000000000
105.107342425
HS4
0.009772844
19936.000000000
194.831417984
HS5
0.015174507
8378.000000000
127.132019646
HS6
0.015899136
8256.000000000
131.263266816
750.334905821
750.334905821
750
67
Baltic Exchange Dirty Tanker Index (BDTI)

The BDTI is calculated from all of the currently reported dirty tanker routes as follows:
TD1
(280,000mt, Middle East Gulf to US Gulf)
TD2
(270,000mt, Middle East Gulf to Singapore)
TD3
(265,000mt, Middle East Gulf to Japan)
TD4
(260,000mt, West Africa to US Gulf)
TD6
(135,000mt, Black Sea/Mediterranean)
TD7
(80,000mt, North Sea to Continent)
TD8
(80,000mt, Crude and/or DPP Heat 135F, Kuwait to Singapore)
TD9
(70,000mt, Caribbean to US Gulf)
TD12
(55,000mt, fuel oil, Amsterdam-Rotterdam-Antwerp range to US Gulf)
TD14
(80,000mt, no heat crude, SE Asia to EC Australia)
TD15
(260,000mt, no heat crude, West Africa to China)
TD17
(100,000mt crude. Baltic to UK-Cont)
TD18
(30,000mt fuel oil Baltic to UK-Cont)
TD19
(80,000mt, cross Mediterranean)
TD20
(130,000mt W Africa to Rotterdam)
68
BDTI
Index Multiplier
8.645389324
Route
Multiplier
WS
TD1
32.88
33
TD2
63.45
63
TD3
61.6
62
TD4
75.31
75
TD6
100.65
101
TD7
104.17
104
TD8
148.67
149
TD9
156.5
157
TD12
149.17
149
TD14
172.44
172
TD15
64.22
64
TD17
84.44
84
TD18
173.57
174
TD19
109.89
110
TD20
91.94
92
Average
105.926666667
Average x multiplier
915.777273141
Rounded Index
916
Baltic Exchange Clean Tanker Index (BCTI)

The BCTI is calculated from the following currently reported clean tanker routes:
69
TC1
(75,000mt CPP/UNL Naphtha Middle East Gulf to Japan)
TC2_37
(37,000mt CPP/UNL Rotterdam to New York)
TC5
(55,000mt CPP/UNL Naphtha Ras Tanura to Yokohama)
TC6
(30,000mt CPP/UNL Euromed - Skikda to Lavera)
TC8
(65,000mt CPP/UNL/ULSD Middle East Gulf to UKCont)
TC9
(22,000mt CPP/UNL/ULSD Baltic to UKCont)
TC14
(38,000mt CPP/UNL/Diesel USG to Cont)
The index is the rounded average of the route rates multiplied by a factor which is
currently 4.667399883
BCTI
Index Multiplier
4.517980403
Route
WS Value
TC1
110.67
TC2_37
226.11
TC5
117.5
TC6
215.63
TC9
240.36
Average
182.0519841
Average x
multiplier
822.507296644
Rounded Index
823
70
The Baltic provides daily time charter equivalent (TCEs) calculations for different
vessel types as follows:
VLCC
The published VLCC time-charter equivalent is an average of the rates derived from
TD1 and TD3.
Suezmax
The published Suezmax time-charter equivalent is an average of the rates derived
from TD6 and TD20.
Aframax
The published Aframax time-charter equivalent is an average of the rates derived
from TD7, TD8, TD9, TD14, TD17 and TD19.
Revisions to index component and weightings

When a revision to an index is introduced the old and new indices are reported in full
and in parallel for one reporting day in order to establish the correct revision to the
multiplier needed to ensure a continuous time series of data. This is irrespective of
other much more elaborate measures needed to avoid disruption to the market as a
result of changes to routes and vessels, which is extensively discussed in Section
13.
71
APPENDIX 3
Route Notes
General
Panellists are reminded that the elected port or ports for load or discharge in the route
description must be the ones on which they base their assessments. This is
particularly important when for whatever reason freight premiums are obtained over
and above other ports in the area.
In the event of port closure, the Board would have to be convened at the earliest
opportunity to assess the situation.
1.
Baltic Exchange Capesize Index

All routes are as always afloat within International Navigation Limits (I.N.L)
and based on the Baltic capesize 2014 vessel description.
Route C3
Disbursements. Panellists should report on the basis of normal port
disbursements at load and discharge ports. This figure is subject to periodic
review by the Baltic and is usually guided by the underlying annual contracts
of affreightment (COAs) contracted by the shippers/receivers.
Route C5
Disbursements. See Route C3.
Route C9_14 and C9_03
Delivery position. Panellists should note that ships fixed with delivery west
of cape Passero up to, but not including, Antwerp have not delivered in
accordance with the route description. These positions are often more
favourable to charterers as they are closer to most load ports. Panellists are
expected to take this into account in adjusting fixtures to index terms.
Route C16_14 and C11_03
Redelivery position. Panellists should note that ships fixed with redelivery
west of cape Passero up to Antwerp have not redelivered in accordance with
the route description. These positions are often more favourable to owners
as they are closer to most subsequent load ports. Panellists are expected to
take this into account in adjusting fixtures to index terms.
72
2.
Baltic Exchange Panamax Index

All routes are as always afloat except where NAABSA is customary and
within I.N.L. and based on the Baltic Panamax vessel description.
Route 1A_03
Fixtures concluded on APS terms. Panellists attention is drawn to the
general note 11.4. (Assessing Time charter fixtures concluded on APS
terms).
In assessing the relevance of these fixtures, panellists will normally consider whether
the market structure assumes vessels will ballast into the US Gulf, or whether it
assumes vessels have carried cargo into the area, and may make rate adjustments
accordingly.
Delivery position. Panellists should note that ships fixed with delivery east of
Gibraltar have not delivered in accordance with the route description. Panellists are
expected to take this into account in adjusting fixtures to index terms
Redelivery position. Panellists should note that ships fixed with redelivery east of
Gibraltar have not redelivered in accordance with the route description. Panellists
are expected to take this into account in adjusting fixtures to index terms
Route 2A_03
Delivery position. Panellists should note that ships fixed with delivery east of
Gibraltar have not delivered in accordance with the route description. Panellists are
expected to take this into account in adjusting fixtures to index terms.
Route 3A_03
Delivery position. Panellists should note that ships fixed with delivery outside
Japan-south Korea range have not delivered in accordance with the route
description. Panellists are expected to take this into account in adjusting fixtures to
index terms
Redelivery position. Panellists should note that ships fixed with redelivery outside
Japan-south Korea range have not redelivered in accordance with the route
index terms
Route 4A_03
Delivery position. Panellists should note that ships fixed with delivery outside
Japan-south Korea range have not delivered in accordance with the route
index terms
73
3.
4.
5.
Baltic Exchange Supramax Index and Supramax Asia Index

a.
All routes are as always afloat within I.N.L. and based on the Baltic
supramax vessel description.
b.
Each route is based on laydays 5 days from index date, with cancelling
10 days from index date. The routes will not be limited by specific
cargo descriptions, except where stated (BES Asia S8,S10 & S11).
c.
Cargo and trading exclusions. Whilst no specific cargo and trading

exclusions are included in route descriptions, panellists will be aware of
market norms at any time. Where fixtures have been concluded at
rates which may appear to be particularly high (or low) because
exceptional flexibility has been given to charterers (or exceptions
restrictions imposed on them), panellists will use their judgement to
make appropriate adjustments.
Baltic Exchange Handysize Index

a.
All routes are as always afloat within I.N.L. and based on the Baltic
handysize vessel description.
b.
Each route is based on laydays 5 days from index date, with cancelling
10 days from index date. The routes will not be limited by specific
cargo descriptions.
c.
Cargo and trading exclusions. Whilst no specific cargo and trading

exclusions are included in route descriptions, panellists will be aware of
market norms at any time. Where fixtures have been concluded at
rates which may appear to be particularly high (or low) because
exceptional flexibility has been given to charterers (or exceptions
restrictions imposed on them), panellists will use their judgement to
make appropriate adjustments.
d.
Route HS1/HS2 - With a delivery of Skaw-Passero this covers both

Mediterranean and Continent markets. There will inevitably be
fluctuations in the relative strengths between these areas and when
this occurs panellists are expected to average their returns to reflect
the overall value within the delivery range.
Baltic Exchange Dirty Tanker Index, Baltic Exchange Clean Tanker

Index and Baltic International Tanker Routes Asia.
a.
Rate assessments are quoted in Worldscale rates (Copyright

Worldscale Association) or dollar per day (for TCEs) or in certain
74
cases in $/mt. The Baltic Exchange does not take responsibility for
the conversion of Worldscale rates into monetary values.
b.
End of year Worldscale change. Panellists are required to report their

assessments according to the current Worldscale rates prevailing up
to the last reporting day of the year. Thereafter the next year's
Worldscale rates will apply.
c.
Panellists are reminded that the elected port or ports for load or
discharge in the route description must be the ones on which they
base their assessments. This is particularly important when for
whatever reason freight premiums are obtained over and above other
ports in the area.
In the event of port closure, the FIFC would have to be convened at the
earliest opportunity to assess the situation.
75
APPENDIX 4
The time charter equivalent (TCE) calculation, which is always represented by a final
nett figure is calculated per the process outlined below. For this example we are
basing on BDTI route TD3 (Ras Tanura to Chiba).
TD3 TCE Calculation Process

The nett time charter equivalent (TCE) is calculated as the income received less the
total expenses and that result is then divided by the total number of days of the
voyage duration.
Expenses
Initially laden and ballast days are calculated.

The laden days are derived by adding a weather factor (5%) to the laden miles
(6,655) and dividing the result by the daily speed (13.0 knots per hour multiplied by 24
hours). The ballast days are calculated in the same manner, with the ballast miles
(6,655) basis a speed 12.5 knots being used. (often the laden mileage and ballast
mileage are the same).
The next step is establishing the bunker costs.
For the trip's IFO (Intermediate Fuel Oil) consumption while loading, the loading days
(2 days) are multiplied by the daily IFO loading consumption (20 mt per day).
For the trip's IFO laden consumption, the laden days (22.39) are multiplied by the
daily IFO laden consumption (70 mt per day).
For the trip's IFO ballast consumption, the ballast days (23.29) are multiplied by the
daily IFO ballast consumption (53 mt per day).
For the trip's IFO consumption while discharging, the discharging days (2 days) are
multiplied by the daily IFO discharging consumption (110 mt per day).
Finally for the trip's IFO consumption while waiting, the waiting days (1 day) are
multiplied by the daily IFO waiting consumption (10 mt per day).
Adding the results from the calculations described above generates the trip's total IFO
consumption. This figure is then multiplied by the IFO market price per mt (based on
Singapore 380 CST and supplied by Bunkerworld), which produces the total IFO
cost for the trip.
The trip's Total Expenses are calculated as the sum of the total IFO cost, the load
port charges (Ras Tanura) and the discharge port charges (Chiba This figure is
divided by the USD/Yen rate as this port's charges are provided in Yen). Foreign
76
exchange rates (including SDRs) are sourced from XE.com. All port cost related
information is provided by Cory Brothers Shipping.
77
Income
The Gross Freight of the voyage is calculated by multiplying the cargo quantity
(265,000 mt) by the Worldscale flat rate and by the Baltic daily Worldscale route
assessment for TD3, divided by 100 (as market levels of freight are expressed as a
percentage of the nominal freight rate).
Please note that the Gross freight allows for the Keiyo Sea Berth Worldscale
differential.
- Discounting the gross freight by the broker commission (2.5%) produces the Nett
Freight.
Duration
The total voyage days are the sum of loading (2), laden (22.39), ballast (23.29),
discharging (2), waiting (1) days.
TD3 TCE
- Deducting the total expenses from the nett freight produces the Nett Income
- Dividing the nett income by the total voyage days (50.68) gives us the Timecharter
Equivalent (TCE) rate for TD3.
78
VLCC
VLCC
SUEZMAX
SUEZMAX
TD1
TD3
TD6
TD20
Ballast speed (knots)
12.50
12.50
12.50
12.50
Laden speed (knots)
13.00
13.00
13.00
13.00
IFO Ballast cons
53.00
53.00
44.00
44.00
IFO Laden cons
70.00
70.00
53.00
53.00
IFO cons at load
20.00
20.00
12.00
12.00
IFO cons at disch
110.00
110.00
68.00
68.00
IFO cons at Anchorage
10.00
10.00
10.00
10.00
Novo
Off' Bonny
Load Port
Ras Tanura
Ras Tanura
Disch Port
Loop
Chiba
Augusta
Rotterdam
Ballast Miles
9,631
6,655
1,269
4,475
Laden Miles
12,338
6,655
1,269
4,474
Cargo Quantity (mt)
280,000
265,000
135,000
130,000
Commission %
2.50
2.50
2.50
2.50
Port Costs Load
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Port Costs Disch
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Canal Dues
Cory Bros
n/a
Cory Bros
Cory Bros
n/a
n/a
n/a
n/a
refer WS
refer WS
refer WS
refer WS
Spore
Spore
Rtdm
Rtdm
Ballast IFO cons
1839.55
1234.32
283.43
689.15
Laden IFO cons
2906.55
1567.53
226.17
798.01
Loading IFO cons
40
40
24
24
Disch IFO cons
220
220
136
136
Waiting IFO cons
15
10
10
10
5006.10
3061.85
669.59
1647.16
5%
5%
5%
5%
WS Differential
WorldScale Flat Rate
IFO price used
Total Voyage IFO cons

Weather Factor
79
Days Ballast
33.71
23.29
4.44
15.66
Days Laden
41.52
22.39
4.27
15.06
Days Loading
Days Disch
1.5
n/a
n/a
81.73
50.68
15.71
35.72
Days Waiting
Days Canal
Total Voyage Days
80
AFRAMAX
AFRAMAX
AFRAMAX
AFRAMAX
AFRAMAX
AFRAMAX
TD7
TD8
TD9
TD14
TD17
TD19
Ballast speed
(knots)
12.50
12.50
12.50
12.50
12.50
12.50
Laden speed
(knots)
13.00
13.00
13.00
13.00
13.00
13.00
IFO
Ballast
cons
36.00
36.00
36.00
36.00
36.00
36.00
IFO Laden cons
43.00
43.00
43.00
43.00
43.00
43.00
IFO cons at load
10.00
10.00
10.00
10.00
10.00
10.00
IFO cons at disch
55.00
55.00
55.00
55.00
55.00
55.00
IFO cons at
Anchorage
5.00
5.00
5.00
5.00
5.00
5.00
Load Port
Sullom
Voe
Mina Al
Ahmadi
P L Cruz
Seria
Primorsk
Ceyhan
Disch Port
W'haven
Spore
C Christi
Sydney
W'haven
Lavera
Ballast Miles
600
3,860
2,162
4,188
1,306
1,718
Laden Miles
600
3,860
2,162
4,188
1,306
1,718
Cargo Quantity
(mt)
80,000
80,000
70,000
80,000
100,000
80,000
Commission %
2.50
2.50
2.50
2.50
2.50
2.50
Port Costs Load
Cory
Bros
Cory
Bros
Cory
Bros
Cory
Bros
Cory
Bros
Cory
Bros
Port Costs Disch
Cory
Bros
Cory
Bros
Cory
Bros
Cory
Bros
Cory
Bros
Cory
Bros
n/a
n/a
n/a
n/a
n/a
n/a
WS Differential
refer WS
n/a
n/a
n/a
refer WS
n/a
Worldscale Flat
Rate
refer WS
refer WS
refer WS
refer WS
refer WS
refer WS
Spore
Rtdm
Spore
Canal Dues
IFO price used

Rtdm
Rtdm
Rtdm
81
LSMGO
LSMGO
Ballast IFO cons
75.35
486.49
272.29
528.57
164.43
216.72
Laden IFO cons
86.39
558.73
312.58
606.92
188.85
248.76
Loading IFO
cons
20
20
20
20
20
20
Disch IFO
cons
110
110
110
110
110
110
Waiting IFO
cons
2.5
2.5
2.5
2.5
2.5
2.5
291.74
1175.22
714.86
1265.49
483.28
595.48.23
Weather Factor
5%
5%
5%
5%
5%
5%
Days Ballast
2.09
13.51
7.56
14.68
4.57
6.0218
Days Laden
2.01
12.99
7.27
14.11
4.39
5.7918
Days Loading
Days Disch
Days Waiting
0.5
0.5
0.5
0.5
0.5
0.5
Days Canal
n/a
n/a
n/a
n/a
n/a
n/a
Total Voyage
Days
8.60
31.00
19.33
33.29
13.46
16.317
Total Voyage
IFO cons
82
LR1
MR
PANAMAX
MR
TC1
TC2_37
TC5
TC14
12.50
12.50
12.50
12.50
Laden speed (knots)
13.00
13.00
13.00
13.00
IFO Ballast cons
36.00
22.50
28.00
22.50
IFO Laden cons
43.00
28.00
33.00
28.00
IFO cons at load
10.00
5.00
5.00
5.00
IFO cons at disch
42.50
25.00
32.00
25.00
5.00
5.00
5.00
5.00
Load Port
Ras
Tanura
Rtdm
Ras
Tanura
Houston
Disch Port
Yokohama
New York
Yokohama
Amsterdam
Ballast Miles
6,638
3,347
6,638
5,142
Laden Miles
6,638
3,347
6,638
5,141
Cargo Quantity (mt)
75,000
37,000
55,000
38,000
Commission %
3.75
3.75
3.75
2.5
Port Costs Load
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Port Costs Disch
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Canal Dues
n/a
n/a
n/a
n/a
WS Differential
n/a
refer WS
n/a
n/a
refer WS
refer WS
refer WS
refer WS
IFO price used
Spore
Rtdm
Spore
Rtdm
Ballast IFO cons
836.39
263.73
650.52
404.85
Laden IFO cons
960.45
315.48
737.09
484.44
Loading IFO cons
20
10
10
10
Disch IFO cons
85
50
64
50
Waiting IFO cons
2.5
1901.84
639.22
1461.61
949.29
WorldScale Flat Rate
83
Weather Factor
5%
5%
5%
5%
Days Ballast
23.23
11.72
23.23
17.99
Days Laden
22.34
11.27
22.34
17.30
Days Loading
Days Disch
Days Waiting
0.5
Days Canal
n/a
n/a
n/a
n/a
50.07
27.99
50.57
40.29
Total Voyage Days
84
HANDY
HANDY
MR
MR
MR
TC4
TC7
TC10
TC11
TC12
12.50
12.50
12.50
12.50
12.50
Laden speed (knots)
13.00
13.00
13.00
13.00
13.00
IFO Ballast cons
22.50
22.50
22.50
22.50
22.50
IFO Laden cons
28.00
28.00
28.00
28.00
28.00
IFO cons at load
5.00
5.00
5.00
5.00
5.00
IFO cons at disch
25.00
25.00
25.00
25.00
25.00
5.00
5.00
5.00
5.00
5.00
Spore
Spore
Yeosu
Yeosu
Jamnagar
Spore
Chiba
Load Port
Disch Port
Chiba
Sydney
Los
Angeles
Ballast Miles
2,926
4,471
5,325
2,480
5,717
Laden Miles
2,926
4,471
5,325
2,480
5,716
Cargo Quantity (mt)
30,000
30,000
40,000
40,000
35,000
Commission %
3.75
3.75
3.75
3.75
3.75
Port Costs Load
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Port Costs Disch
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Cory Bros
Canal Dues
n/a
n/a
n/a
n/a
n/a
WS Differential
n/a
n/a
n/a
n/a
refer WS
refer WS
refer WS
refer WS
refer WS
refer WS
IFO price used
Spore
Spore
Spore
Spore
Spore
Ballast IFO cons
230.34
352.09
423.28
195.30
450.21
Laden IFO cons
275.53
421.31
506.49
233.69
538.62
Loading IFO cons
10
10
10
10
10
Disch IFO cons
50
50
50
50
50
Waiting IFO cons
Worldscale Flat Rate
85
565.87
833.40
989.77
488.99
1048.84
5%
5%
5%
5%
5%
Days Ballast
10.24
15.65
18.81
8.68
20.01
Days Laden
9.84
15.05
18.09
8.35
19.24
Days Loading
Days Disch
Days Waiting
n/a
n/a
n/a
n/a
n/a
25.08
35.70
41.90
22.03
44.25
Weather Factor
Days Canal
Total Voyage Days
86
APPENDIX 5
FFA Forward Curve Specifications
The following section sets out details of the data included in the Baltic Forward
Assessment for the FFA market. This is also known as the forward curve. It can
change rapidly as contracts trade less or for shorter periods or trade more and for
more distant tenors. New contracts are added frequently in response to market
demand.
Dry Bulk Settlement Periods

Routes P1A, P2A, P3A are reported based on both entire month and last seven day
settlement while C3, C4, C5, C7, C9_03 and all TCs are reported on an entire month
settlement basis.
Rollover
Reporting months will change on the last working day of each month.
Eg For April 2014, the rollover date is 31 March 2014.
The Cape and Panamax Time Charter Curves go out to+4M, +6Q and +7Cal.
C4, C7, C3 & C5

For the voyage routes, C4 & C7, the individual months reported will range from a
minimum of current month plus five months, to a maximum of current month plus
seven months. This will enable full coverage of the months not reported between the
monthly and quarterly periods, whilst avoiding duplication of data.
The text below outlines how these periods operate:
In practice, a NR value will be reported when the forward month is covered by a
forward quarter. For example, for routes C4 and C7 if the current month is the first
month of a quarter (eg April) then monthly values will be produced for April, May,
June, July, August and September (current month +5 months).
When we are in the first month of a quarter, four full quarters will be reported on all
the timecharters. For example, on 12 January, the reported quarters would be Q1 (as
cur. Quarter), Q2, Q3, Q4. The +4Q reporting period, will be Not Reported.
When the current month is the second month of the quarter (eg May), monthly values
for the current month up to plus seven months will be reported, as the next quarterly
assessment will commence in January. In this example, monthly values will be
produced for May, June, July, August, September, October, November and
December (current month +7).
87
When the current month is the third month of the quarter (eg June), monthly values
for the current month up to plus six months will be reported, but the current month
plus seven months will be a NR value. For example, if the current month is June,
then monthly values will be produced for June, July, August, September, October,
November and December.
The same concept applies to the individual months reported for the voyage routes C3
& C5, except that for these routes the range will be from current month plus two
months, to current month plus five months. As such current month plus three months
and current month plus four months will be reported as a NR when the current month
is the first month of the quarter (eg April).
When the current month is the second month of the quarter (eg May), values will be
reported for the current month up to plus five months and there will be no NR values.
Finally, when the current month is the third month of the quarter (eg June), a NR
value will be reported for current month plus five months.
88
89
+4Q
+5Q
+6Q
+1 CalY
+2 CalY
+3 CalY
+4 CalY
+5 CalY
+6 CalY
+7 CalY
Cur mth
+1mth
+2mth
+3mth
+4mth
Cur Q
+1Q
+2Q
+3Q
+4Q
+1 CalY
+2 CalY
+3 CalY
+4 CalY
+5 CalY
+6 CalY
+7 CalY
BHSI T/C
average
+1mth
+2mth
+3mth
+4mth
Cur Q
+1Q
+2Q
+3Q
+4Q
+1CalY
+2CalY
+3CalY
+4CalY
+5CalY
+6CalY
+7CalY
BPI T/C
average
+3Q
+2Q
+1Q
Route P3A
EM
+3mth
+4mth
Cur Q
+3
CalY
+2
CalY
+1
CalY
+2Q
+3Q
+1Q
+5mt
h
Cur
Q
+2mt
h
+3mt
h
+4mt
h
Route P3A
7D
+3
CalY
+2
CalY
+1
CalY
+2Q
+3Q
+1Q
Cur Q
+5mth
+3
CalY
+2
CalY
+1
CalY
+2Q
+3Q
+3 CalY
+2 CalY
+1 CalY
+2Q
+3Q
+1Q
Cur Q
Cur Q
+1Q
+5mth
+4mth
+3mth
+2mth
+1mth
+5mth
+4mth
+3mth
+3mth
+4mth
+2mth
+1mth
+2mth
+1mth
Route P2A
EM
+1mt
h
Route P2A
7D
+1mth
+2mth
Route P1A
EM
+3 CalY
+2 CalY
+1 CalY
+2Q
+3Q
+1Q
Cur Q
+5mth
+4mth
+3mth
+2mth
+1mth
+3CalY
+2 CalY
+1 CalY
+2Q
+3Q
+1Q
Cur Q
+5mth
+4mth
+3mth
+2mth
+1mth
Cur mth
Route P1A
7D
Cur mth
+4 CalY
+5 CalY
+6 CalY
+7CalY
+3 CalY
+2
CalY
+4Q
+5Q
+6Q
+1CalY
+3Q
+2Q
+1Q
+3mth
+4mth
Cur Q
+1mth
+2mth
Cur mth
BCI T/C
average(5TC)
Cur mth
+2CalY
+1 CalY
+4Q
+3Q
+2Q
+3 CalY
+4 CalY
+5 CalY
+1CalY
+2 CalY
+1 CalY
+4Q
+3Q
+2Q
CUR Q
+1Q
+2Q
+3Q
+4Q
+1Q
Cur Q
+5mth
+4mth
+3mth
+2mth
+1mth
Cur mth
+7mth
+6mth
+5mth
Cur Q
+1Q
+4mth
+3mth
+2mth
+1mth
Cur mth
+4mth
+3mth
+2mth
+1mth
Cur mth
Route C9_03
Cur
mth
Route C7
Cur mth
Route C5
Cur
mth
+3 CalY
+4 CalY
+5 CalY
+1CalY
+2CalY
+3Q
+4Q
CUR Q
+1Q
+2Q
+7mth
+6mth
+5mth
+4mth
+3mth
+2mth
+1mth
Cur mth
Route C4
Cur mth
BSI T/C
average
Cur mth
+3CalY
+2CalY
+1CalY
+4Q
+3Q
+2Q
Q
+1Q
Cur
mth
+5
+4mth
+3mth
+2mth
+1mth
Cur mth
Route C3
90
Tankers
Tanker Settlement Periods
All Tankers are reported on an entire month settlement basis.
Dirty routes :
TD3 265000mt Middle East Gulf to Japan. Ras Tanura to Chiba with
laydays/cancelling 30/40 days in advance. Maximum age 15 years. 2.5% total
commission.
TD7 80000mt North Sea to Continent. Sullom Voe to Wilhelmshaven, with

commission.
TD8 80000mt Kuwait to Singapore. Mena al Ahmadi to Singapore with

commission.
TD9 70000mt Caribbean to US Gulf. Puerto La Cruz (Jose Platform TAECJ) to

Corpus Christi with laydays/cancelling 7/14 days in adavnce. Maximum 20
years. 2.5% total commission.
TD17 100000mt Baltic to UK-Cont. Primorsk to Wilhelmshaven (belt/belt) with

laydays/cancelling 10/20 days in advance. Maximum 15 years of age. 2.5% total
commission.
TD19 80000mt Cross Mediterranean. Ceyhan to Lavera with

commission.
TD20 - 130,000mt. West Africa to UK-Continent (offshore terminal Bony) to

Rotterdam. Laydays/cancelling 15-20 days from the index date. Age max 20
years. 82,000grt. 2.5% total commission.
Clean routes :
TC2_37 37000mt CPP/UNL Continent to USAC. Rotterdam to New York

with laydays/cancelling 10/14 days in advance. Maximum age 15 years.
TC5 55,000mt, CPP/UNL naphtha condensate, Middle East/Japan. Ras

Tanura to Yokohama with laydays cancelling 30/35 days in advance.
Maximum age 15 years. 3.75% total commission.
TC6 30000mt CPP/UNL Algeria/Euromed Skikda/Lavera with laydays

cancelling 7/14 days in advance. Maximum age 15 years3.75% total
commission.
91
TC12 35000mt Naptha (WCI) to Japan. Sikka (Jamnagar) to Chiba with

commission.
TC14 38000mt CPP/UNL U.S.Gulf to Continent. Houston to Amsterdam with

laydays cancelling 6/12 days in advance. Maximum age 15 years. 3.75% total
commission.
Reporting periods for US$/tonne curves:
TD3
Cur mth +1m
+2m
+3m
+4m
+5m
TD7
Cur mth +1m
+2m
+3m
+4m
+5m
TD8
Cur mth +1m
+2m
+3m
+4m
+5m
TD9
Cur mth +1m
+2m
+3m
+4m
+5m
TD17
Cur mth +1m
+2m
+3m
+4m
+5m
TD19
Cur mth +1m
+2m
+3m
+4m
+5m
TD20
Cur mth +1m
+2m
+3m
+4m
+5m
TC2
Cur mth +1m
+2m
+3m
+4m
+5m
TC5
Cur mth +1m
+2m
+3m
+4m
+5m
TC6
Cur mth +1m
+2m
+3m
+4m
+5m
TC7
Cur mth +1m
+2m
+3m
+4m
+5m
TC12
Cur mth +1m
+2m
+3m
+4m
+5m
TC14
Cur mth +1m
+2m
+3m
+4m
+5m
Cur
Quarter
Cur
Quarter
Cur
Quarter
Cur
Quarter
+1
Q
+1
Q
+1
Q
+1
Q
+2
Q
+2
Q
+2
Q
+2
Q
+3
Q
+3
Q
+3
Q
+3
Q
+4
Q
+4
Q
+4
Q
+4
Q
+5
Q
+5
Q
+5
Q
+5
Q
+1 CalY +2
Cur
Quarter
Cur
Quarter
Cur
Quarter
Cur
Quarter
+1
Q
+1
Q
+1
Q
+1
Q
+2
Q
+2
Q
+2
Q
+2
Q
+3
Q
+3
Q
+3
Q
+3
Q
+4
Q
+4
Q
+4
Q
+4
Q
+5
Q
+5
Q
+5
Q
+5
Q
+1 CalY +2
Cur
Quarter
Cur
Quarter
Cur
Quarter
Cur
Quarter
Cur
Quarter
+1
Q
+1
Q
+1
Q
+1
Q
+1
Q
+2
Q
+2
Q
+2
Q
+2
Q
+2
Q
+3
Q
+3
Q
+3
Q
+3
Q
+3
Q
+4
Q
+4
Q
+4
Q
+4
Q
+4
Q
+5
Q
+5
Q
+5
Q
+5
Q
+5
Q
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
+1 CalY +2
**PLEASE NOTE THAT WORLDSCALE CURVES WILL ONLY DISPLAY

CURRENT YEAR PERIODS
Rollover
92
Reporting months will change on the last working day of each month.
Eg For April 2014, the rollover date is 31 March 2014.
When we are in the first month of a quarter, there five full quarters reported on all the
tanker routes.
For example, on 12 January (12), the reported quarters would be Q1 (12) (as cur.
Quarter), Q2 (12), Q3 (12), Q4 (12) & Q1 (13).
The +5Q reporting period, will be Not Reported. When we are in the second or the
third month of the quarter, current quarter will be the remaining of that quarter, and
four full quarters ahead will also be reported on all tanker routes.
For example, on 17 February 12, current quarter would be Feb/Mar, and then we
would be reporting on Q2, Q3, Q4, Q1 & Q2 (10).
Mathematically Derived Periods
1.
Dry Timecharter quarterly reporting

When current month is the third month of a quarter, (eg CURMON = March),
current quarter is the same (March). Therefore, for the third month of the
quarter the system automatically copies the CURMON value to CUR Q and
reporting to CUR Q is blocked from panellists.
2.
Dry Timecharter and Tanker yearly reporting

When Q1, Q2, Q3 and Q4 of the same year are reported, (this only happens
when current month is November or December) the entry for calendar year
+1 is automatically calculated as the average of Q1+Q2+Q3+Q4 and
reporting is blocked from panellists.
3.
Tankers quarterly reporting

All formula examples are based using TC4 TC5 but the principle holds for all
tanker routes.
a.
When the current month is the first month of a quarter [eg April]
The reported months are April (TC4CURMONTC5CURMON), May
(TC5+1_M), June (TC5+2_M), July (TC5+3_M), August (TC5+4_M)
and September (TC5+5_M)
The Current Quarter (TC5CURQ which is Q2) and Current Quarter +1
(TC5+1Q which is Q3) is derived mathematically using the monthly
reported data in the following manner.
The current quarter is calculated as
TC5CURQ = (TC5CURMON + TC5+1_M + TC5+2_M) / 3
93
And TC5CURQ is blocked from reporting panellists.

Current Quarter +1 is calculated as
TC5+1Q = (TC5+3_M + TC5+4_M + TC5+5_M) / 3
And TC5+1Q is blocked from reporting panellists.
b.
When the current month is the second month of a quarter [eg May]
The reported months are May (TC5CURMON), June (TC5+1_M), July
(TC5+2_M), August (TC5+3_M), September (TC5+4_M) and October
(TC5+5_M)
The Current Quarter (TC5CURQ which is May/June) and Current
Quarter +1 (TC5+1Q which is Q3) is derived mathematically using the
monthly reported data in the following manner.
TC5CURQ = (TC5CURMON + TC5+1_M) / 2
And TC5CURQ is blocked from reporting panellists.
TC5+1Q = (TC5+2_M + TC5+3_M + TC5+4_M) / 3
c.
When the current month is the third month of a quarter [eg June]
The reported months are June (TC5CURMON), July (TC5+1_M),
August (TC5+2_M), September (TC5+3_M), October (TC5+4_M) and
November (TC5+5_M)
The Current Quarter (TC5CURQ which is June) and Current Quarter
+1 (TC5+1Q which is Q3) is derived mathematically using the monthly
reported data in the following manner.
TC5CURQ = (TC5CURMON)
And TC5CURQ is blocked from reporting panellists online.

TC5+1Q = (TC5+1_M + TC5+2_M + TC5+3_M) / 3
94
The remaining forward quarters are reported by the FFA broker panel.
95
APPENDIX 6
INTRADAY CURVE PRODUCTION
1. Background
The Baltic Exchange is to provide intraday curves for dry FFAs each day in order to allow clearing
houses to carry out variation margining of open positions or market participants to mark their
books to market. Three factors which apply to the production of the intraday curves are:
a) Time constraints: the intraday curves need to be provided in a timely manner by 12:30 each
day but the process of creating them cannot begin until a reasonable interval after the
publication of the Cape index at 11:00.
b) Consistency: the intraday curves need to be consistent with the previous days closing prices
taking into account actual market movements but avoiding excessive variance caused by
factors such as numbers being provided by different or fewer panellists and panellist errors,
unless a large intraday market move genuinely occurs.
c) Discretionary power for SFR Team: whereas the Baltics normal process for calculation of the
Baltic forward assessments (the closing prices) requires that they are simply an average of
rates input by each of the panellists, the calculation of the intraday curves, by virtue of being
able to draw on real time trade data on Baltex and because of the need for consistency with
the closing prices, may require discretionary intervention by the SFR Team as set out below.
2. Timings
a) 10:45 - 11:00 send out reminder email to intraday contributors at contributing panellists with
follow up telephone calls where needed.
b) 11:20 - 11:40 panellists submit their numbers and relevant trades processed through Baltex
are captured.
c) 11:20 - 12:00 intraday team prepares spreadsheet from template.
d) 12:00 - 12:30 intraday team creates intraday curves and saves file
e) 12:30 intraday team places CSV file on FTP server (ftp2014.balticexchange.org) for
collection
3. Preparation of spreadsheet
a) Enter previous days (or most recent) Baltic closing prices for reference.
b) Enter panellists intraday numbers.
c) Enter recent (after 10:00) Baltex trade prices taking care to distinguish combo and spread
prices.
d) Spreadsheet calculates averages of panellists numbers.
e) Where applicable, spreadsheet derives Quarters from constituent months and Calendars from
constituent Quarters.
f) Spreadsheet calculates difference (percentage and absolute) between average of panellists
numbers and previous closing prices.
4. Methodology for creating intraday curves
96
a) Each instrument (e.g. Capesize 5T/C) is reviewed in turn, firstly by looking for any anomalous
large differences (percentage or absolute) in a particular period between the average of the
panellists numbers and the previous sessions closing prices.
b) The numbers provided by the panellists for each period of the instrument are compared with
each other to look for any anomalies (say, 5% or more from the others). Such anomalies could
arise either from input errors by the panellists or due to differing views of the market,
particularly in illiquid periods or instruments.
c) Where there is an anomaly, the average number produced is (i) compared with any Baltex
trade prices in the period and (ii) the change between the average and the previous days
close is compared with the equivalent changes in adjacent periods. Where the average is
significantly out of line with a Baltex trade price or the change from the close in the period is
significantly different (say 5% or more) from the equivalent changes in adjacent periods a
decision whether to ignore the anomalous panellist number shall be made and documented
by the SFR team.
d) If it is determined that, in the circumstances, the perceived anomalous panellist number
should be disregarded, the average of the remaining broker numbers is recalculated and this
new average is used for the intraday curve, except that where the perceived anomalous
panellist number which is to be disregarded was the only panellist number provided for a
given period, then the intraday curve will use the previous closing price for that period unless
the adjacent periods in that instrument have moved significantly (more than 5%) in which
case the previous days closing price will be adjusted by a percentage amount which is the
average of the changes in the adjacent periods (one on each side) and this number is then
used for the intraday curve price.
e) For instruments where there is little or no open interest or trading activity the intraday
curves, with the exception of the current month, are taken directly from the previous closing
prices except where there is a large move in the market as demonstrated by panellist returns
or trades logged through Baltex.
f) Any panellist number which is considered to be anomalous is checked with the panellist that
provided the number. Due to time constraints this will normally take place after the
production of the intraday curve except where it is considered absolutely necessary to have
this information beforehand.
g) The data produced in the spreadsheet used to perform the above calculations feeds
automatically into a second spreadsheet in the format needed for publication. A copy of the
second spreadsheet is then saved as a CSV file and is made available to the clearing house via
the FTP server.
5. Review
Before publication the rates are reviewed by the SFR or his delegate to confirm that the process
has been correctly followed and the rates may be published.
6. Record keeping
Electronic records of all spreadsheets used to generate the intraday curves and any relevant
email correspondence with panellists and clearing houses will be retained as per the stipulations
of this Guide to Market Benchmarks.
97
APPENDIX 7
DRAFT: Letter to panellists confirming continuation of appointment following
an audit by BEISL
Dear
Thank you for allowing the time for my/our visit to your office on xxxxxxx. It was a
pleasure to see you. This letter follows the successful completion of the annual review
process we went through together and confirms the continuation of your appointment
as a Baltic panellist. The appointment is always subject to your continued willingness
to serve and our conviction that you continue to meet the necessary criteria.
You are currently reporting on the following routes. [insert routes].
During the audit process we confirmed together that you have sufficient business in
the routes you are reporting to justify your position as a panellist. We also reviewed
your staffing levels to ensure that you are able to report even when staff are on
vacation or otherwise out of the office. We discussed the importance of providing
reports on each route on every reporting day within the time windows permitted. We
also discussed the record of your performance on this point in the last year.
Your attention is drawn to the important information contained in the Baltic's Guide to
Market Benchmarks which sets out the responsibilities of panellists. It is particularly
important that you and your staff are familiar with sections 4, 9, 10, 11 and 14 as well
as with the relevant route specification contained in the various appendices.
I look forward to continuing to work with you and to our next review in 12 months.
98
APPENDIX 8
Delegation Process
Staff members to whom authority to compile and transmit the route averages and
indices is delegated are currently as follow.
Capesize
1. Patricia Jones
2. Patrick Swayne
Panamax
1. Patricia Jones
2. Barrie Wooderson
Supramax
1. Patrick Swayne
2. Barrie Wooderson
Handysize
1. Barrie Wooderson
2. Patrick Swayne
Tankers
1. David Williams
2. Patrick Swayne
LPG
1. David Williams
2. Patrick Swayne
S&P
1. Patrick Swayne
2. David Williams
Demo
1. Patrick Swayne
2. David Williams
BFA
1. Michael Ackerman
Options
1. Michael Ackerman
Singapore generated
routes
1. Chris Jones
2. Shi Yanjie
99
APPENDIX 9
Baltic Exchange Information Services Ltd
Summary of backup and business continuity plans
Office systems
The Baltic Exchange primary office systems run on MS Server 2007 and are housed
in a computer room locally. Data is mirrored in real time to a back up system running
at a remote data centres in Maidenhead which is run by C4L Ltd and provided to the
Baltic by Ridgewall Ltd.
There is no automatic switching to the remote centre, and in the event of a
catastrophic failure of the main site or a disaster rendering the location inaccessible,
uninhabitable or devoid of power for any significant period, company systems (email,
file systems etc) can be accessed using Terminal Services to the remote site.
In addition to the real-time mirroring of data to the remote centre, data is continuously
backup up on site to a Network Attached Storage (NAS) device. Data from the NAS is
also backed up daily to "cloud" storage, providing off-site storage of the backups. In
the worst case the fallback data will be 24 hours old.
Assuming the main Baltic location is inaccessible it is expected that staff will work
from home until an alternative location can be established. All critical staff have
access to fast broadband connections at home.
Index production system
The index data is collected from panellists, reviewed, managed and indices calculated
and distributed using a world wide web based system. The system is developed and
maintained by a third party (InFx Solutions Ltd).
The main website is hosted for InFx by hosting provider M247 using three machines
in a cluster, 2 in London and one in Manchester. Each machine is a mirror of the
other so the loss of a machine or an entire data centre will not bring the system down.
Daily system backups are also transferred to separate storage at the InFx premises in
Hastings.
Access to this system would be unaffected by any local failure at the Baltic offices
and staff would be able to access it from home or new premises without interruption.
To cover for the possibility of catastrophic and unrecoverable failure of the system
software, the Baltic maintains Excel spreadsheets which are available on its in-house
100
systems and which can be used to record contributions provided by panellists on the
telephone. The SFR maintains the master spreadsheets and ensures that they are up
to date in relation to contributing panellists, routes, multipliers and calculations.
These spreadsheets are backed up and recoverable via the processes set out above.
Process
In the event of the web based system becoming unavailable the members of the
Baltic freight office will contact the contributing panellists directly by phone or email as
appropriate and record their contributing returns on the master sheets.
These sheets automatically update as the information is entered. Once the freight
market team are content with the returns, the results of the calculations can be
approved.
The information will be distributed to the market participants using stored emails
distribution lists. This data will be sent as a report to members and also as a comma
delimited file (CSV) to our quote vendor network to allow its importation into their
systems.
Security
All in house and web systems are protected using firewall technology and penetration
testing of in-house systems is carried out once per annum with any significant
deficiencies being remedied.
For the exchange systems live scanning for viruses and trojans is carried out using
Sophos technology which is updated on a 15 minute cycle.
The web servers as all Linux based and also run active anti-virus software with
signature updates twice a day.
All exchange systems, internal DR and web systems are also protected by Intrusion
Prevention Systems which scan inbound requests for known malicious signatures.
Any such requests matched will result in the sender being added to the real time
blacklist blocking tables.
In addition the web hosting has robust precautions in place to withstand denial of
service attacks
Physical security of in-house systems is protected by their location in a locked room
inside the Baltic Exchange building which has 24 hour security arrangements
including video surveillance.
The physical web servers are hosts in secured hosted data centres with 24 hour
access controls limited to the employees of the hosting company. Any visit to the
hosting centre would be security cleared in advance and visitor would be
accompanied at all times.
101
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Guide To Market Benchmarks Ver2.1

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Guide to Market Benchmarks

Version 2.1 - July 2015

Preface to Version 2.1, published July 2015

Baltic Benchmarks: Independence of the Administration

The role of the SFR

Selection of Benchmark Parameters

Calculation of the Benchmarks

Confidentiality and Transparency

Selection, Appointment, Responsibilities and Audit of

Guidance for Panellists

Audits and Quality Control

Complaints and Whistle-Blowing

Current Index Route Definitions

Details of Index Calculations

Time Charter Equivalents

FFA Forward Curve Specifications

Intraday Forward Curves

Letter to Panellists Confirming Continuation of

Business Continuity Procedure

The Baltic publishes a series of rates which provide an assessment of the

This Guide will be updated as required to reflect necessary changes to

The overall responsibility for the administration of the benchmarks

Certain benchmarks are produced in the Singapore office of the Baltic

Baltic Benchmarks: Independence of the Administration

Investment by staff in the shares of listed shipping companies, either directly

Although the Directors of BEISL will normally be shipping market

The Baltic production process is based on the confidential provision of

In reaching their rate assessments, panellists will take cognisance of the

It is a characteristic of the global freight market that although a route may be

The role of the SFR

The SFR is a senior shipbroker with a broad experience of the marketplace.

If for whatever reason a panellist exceptionally fails to report on a given day

If the SFR considers that a rate may contain an obvious error or be

Missing rates where the panellist has failed to report;

Rates falling outside a predetermined tolerance range and therefore

The publication of assessments by the Baltic is authorised by the SFR when

Selection of Benchmark Parameters

The criteria for selecting routes are broadly as follows:

Baskets and geographical balance

Forward Assessment and volatility assessments

the existence of a documented market expectation that an active

Calculation of the Benchmarks

The Baltic rate which is published is an unweighted arithmetical average of

In the case of the Baltic forward assessments, which aim to provide a

However, if, following publication of a route assessment, a panellist

The SFR will be vigilant in observing any unusual or suspicious pattern of

Confidentiality and Transparency

Together these measures provide tangible and substantiated information

Selection, Appointment, Responsibilities and Audit of Panellists

The main business of panellists should be shipbroking. Principals

Panellists must be recognised as competent, professional firms,

Panellists must be members of the Baltic Exchange, meeting all

The Baltic aims to maintain a geographical spread of panellists;

No firm shall continue to be a panellist unless the firm:

Satisfies and, whenever required to do so, continues to satisfy the

Is a member of the Baltic Exchange;

Having received notice of the responsibilities of a panellist, as

Panellists are appointed for an indefinite period of time. Their appointment is

The appointment and removal of panellists is the responsibility of the Board,

On appointment to a panel the shipbroking firm commits to:

Accept the index rules included in this guide.

Continuing to satisfy the Baltic Exchange as to its competence and

Carry out a process of self-assessment at regular intervals during its