Ocean carriers CMA CGM of France and Hapag-Lloyd of Germany joined the first round of investments into the New York Shipping Exchange, a platform for so-called “enforceable” freight contracts, with additional investments from GE Ventures and Goldman Sachs.
The New York Shipping Exchange (NYSHEX) has finalized a $13 million Series A round of funding, the exchange said Monday, signaling a new phase of growth in the startup’s attempts to create new booking behavior in the liner shipping industry.
Ocean carriers CMA CGM of France and Hapag-Lloyd of Germany joined the investment round, along with additional investments from GE Ventures and Goldman Sachs. NYSHEX founder and Chief Executive Officer Gordon Downes called it “best practice” for users of an exchange to also be investors.
The NYSHEX is a digital exchange that allows shippers, freight forwarders and ocean carriers to engage in the consummation of forward freight contracts. The overall goal of the NYSHEX is to get both parties in a transaction to agree to mutually enforceable contracts that penalize either side for failing to live up to the terms of the contract, while still using the industry’s standard contract format.
Buyers pay liquidated damages for no-show containers, which enable carriers to improve vessel planning and utilization, while carriers pay liquidated damages when the contract is not operationally fulfilled, the NYSHEX explained.
In addition, rates are “all-in,” meaning there are no general rate increases or surcharges tacked onto offers on the NYSHEX.
Buyers of container shipping services, such as shippers and non-vessel-operating common carriers, use the NYSHEX at no cost, and just have to initially be pre-accredited with the exchange to get started, while ocean carriers pay a $5 per TEU transaction fee.
American Shipper detailed the NYSHEX model in its February 2017 cover story, “The times they are a-changin’.”
CMA CGM, Hapag-Lloyd, Mitsui O.S.K. Lines and Orient Overseas Container Line are currently working with the NYSHEX. Looking ahead, the NYSHEX said it “will continue to bring on additional carriers to grow its service offerings and pursue future funding to build a comprehensive global exchange.”
NYSHEX finalizes $13m Series A investment round
