What course of action is available to logistics operators when prevailing indices remain static, yet the intended route is poised to enter a zone of prospective risk? Conventional indices often exhibit delayed responsiveness, proving most beneficial only after an event has been priced into the market.
Contemporary logistics necessitates a distinct category of quantitative challenge, one that involves identifying the precise moment when market conditions have not definitively shifted, yet the underlying dynamics of movement have changed. This calls for a predictive — or forecasting — capability that surpasses the analytical tools currently available in transport analytics.
This necessity has led to the development of a novel index: the Transport Connectivity Risk Index. Its objective is straightforward in conception but demanding in execution: to calculate the probability of transport disruption before such disruption is reflected in a commercial invoice. In essence, it aims to perceive not the cost of consequences but the accumulation of causal factors, translating this observation into a measurable analytical framework. This endeavour does not seek to replace existing indices such as the BDI, SCFI, CCFI, Drewry WCI, Freightos Baltic Index, HARPEX, ERAI, GSCPI, LPI, LSCI, PLSCI, and CPPI, among others. All the achievements of modern freight arithmetic have been taken into account. The new index is designed to draw from the existing indices their strongest attributes and to apply them correctly for the common good.
For instance, from the LPI, the index should derive insights into national-level logistics efficiency. From the LSCI and PLSCI, it should capture the quantitative characterisation of maritime connectivity for nations and ports. From the CPPI, it should measure container terminal productivity. The BDI should inform the daily financial «temperature» of the dry bulk market. Through the SCFI and CCFI, it should gauge the pulse of the Chinese container hub within global logistics. From the Drewry WCI and Freightos Baltic Index, it should obtain pricing data on container movement across key global trade lanes. HARPEX should provide insights into the medium-term costs associated with containership tonnage. From the Baltic Air Freight Index and TAC Index, it should assess the urgent diversion of high-value cargo to air transport. ERAI should inform on the cost of the Eurasian rail Plan B, offering an alternative route to circumvent bottlenecks in global maritime logistics. The GSCPI should reflect macroeconomic pressures on global supply chains. Finally, the PMI Suppliers’ Delivery Times and Logistics Managers’ Index should measure production and warehousing delays.
The second component will incorporate data from the UKMTO, JMIC, and IMB regarding maritime incidents. It includes the assessments of the Joint War Committee concerning zones of military risk and considers war-risk insurance premiums for vulnerable waterways such as the Red Sea, the Strait of Hormuz, the Black Sea, the Eastern Mediterranean, the Taiwan Strait, and others. This component also encompasses data on port closures, cancellations of port calls, increased transit times through waterways, congestion at anchorage areas, loss of AIS signal, and alterations to standard routing patterns. Furthermore, it includes diversions around the Cape of Good Hope, sanctions compliance status of shipments, unscheduled inspections at borders — or directly at sea — and the legal robustness of contracts.
The third component of the index focuses on land-based substitutability. Maritime routes can close abruptly, necessitating viable rail and road diversions, contingent upon sufficient capacity. This component requires calculating the price of TEU and FEU units, assessing transit time and its variance, number of transhipments, availability of flat wagons, throughput capacity at border crossings, and terminal performance. It must also account for the availability of locomotive traction, port transhipment capacity, ferry service regularity, processing time for transport documentation, cargo insurance, and the risk of consignment detention.
