Index-linked contracts

Index-linked contracts allow ocean freight rates to adjust in line with a chosen market index. Instead of agreeing a fixed price that may quickly become outdated, both parties use a transparent, market-driven benchmark to keep the rate aligned with current conditions.

This approach reduces the need for repeated renegotiations, supports long-term supplier relationships, and helps avoid issues such as rolled cargo when the market moves.

Surcharges

Surcharges are cost components added to the base ocean rate. In index-linked contracts, Xeneta uses a fixed surcharge methodology that determines which charges are included in the indexed ocean rate and which must be handled separately.

This logic is not configurable. Surcharge inclusion follows a predetermined, platform-wide approach designed to keep index updates transparent, comparable, and reliable for all parties.

Only the surcharges defined within Xeneta’s standard inclusion methodology form part of the indexed ocean rate. Any surcharge outside that methodology remains a separate commercial agreement between shipper and supplier.

The same principles that guide THC treatment apply here: Xeneta applies consistent, regionally aware rules so that rate calculations remain stable and easy to understand.

To view the full list of surcharges that Xeneta includes and excludes in its rate calculations, you can download our surcharge reference overview here

THCs exception

Xeneta applies it’s own Terminal Handling Charges (THC) methodology where included charges are based on origin/destination. You can learn more about it here

THCs are usually not part of index-linked rate logic because THCs are floating port charges that can vary by terminal, operator, and local cost structure. Including them in an indexed rate would reduce the integrity of the index itself, since these charges do not move in line with ocean freight market dynamics and would introduce noise into the rate calculation.

However, there is one key exception:

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For North American port pairs, Origin Terminal Handling Charges (OTHC) values are not displayed separately because THCs are already included within the rates you see in our platform.

This same behaviour applies when viewing or operating index-linked contracts. THCs follow Xeneta’s regional methodology to ensure alignment between indexed rates and the rates visible across Market Analytics and IRM.

Simulator

The Index-Linked Contract Simulator lets you model how an indexed rate behaves over time. It uses the same principles that govern Xeneta’s market indices and surcharge methodologies, ensuring the simulation reflects real-world behaviour.

The simulator helps you:

• Compare indexed rates with traditional fixed-rate structures
• Test different adjustment frequencies, discounts or premiums, floors and ceilings
• Understand how the contract responds during volatile periods

More guidance on how to structure an index-linked contract can be found here

Index-linked Contract Manager

The Index-linked Contract Manager (ICM) applies your index-linked rules to an active contract. Rate updates are calculated automatically based on the chosen index, adjustment frequency and contract methodology.

ICM provides:

• Automated rate updates based on your contract rules
• Transparent calculation views so you can see exactly how each update was derived

Best-practice recommendations for indexed contracts can be found here