The Research Of Price Discovery Function In Container Freight Forward Agreement

International shipping has developed for hundreds of years. Since themid-20th century, container has been used in ocean shipping which hashelped developing the shipping industry, improving transport efficiency, andreducing shipping cost. Since the financial crisis, supply and demandrelations, economy and trade, political and natural environment factors allinfluence the container market; unusually the market has large pricefluctuations. In order to avoid the risk of container freight rate fluctuations,Shanghai launched long-term freight forward contracts of export containers.Container liner operators, shippers and agents, financial institutions can allparticipate in the container freight market.This paper uses econometric methods to study the price discoveryfunction in container freight forward agreements, typically European basicport forward freight rate agreements. We find that the forward price inEuropean basic port forward freight rate agreements has strong pricediscovery function which presents the originally closed container transportmarket new opportunities.