Innovation of the year, Asia: Freight Investor Services

Energy Risk Asia Awards 2020: Pricing and analysis tool, FIS Live, breaks ground in dry bulk and freight markets

Fast and accurate real-time pricing for dry bulk commodities and freight has not typically been easy to come by. But the new application from London-based interdealer commodity derivatives broker Freight Investor Services (FIS), which has won Energy Risk’s Asia innovation of the year award, looks to have changed that.

Launched in May, FIS Live combines live pricing with news and technical analysis across the dry freight, iron ore, fuel oil, coking coal, steel/scrap and fertiliser markets – and has won high praise from clients.

Kerry Deal

“We did extensive market research, and we believe this is the first time anyone has put together live pricing of this complex of products in the same place,” says Kerry Deal, London-based head of business development at FIS. “It’s a linked complex that is frequently priced together.”

The app, accessible in both desktop and mobile format, has quickly gained traction. Already 460 of FIS’s daily trading clients have registered to use FIS Live – a majority of them – and it draws about 100 active users on a typical day, Deal says. The intention now is to begin releasing it to a wider audience, beyond the firm’s existing client base.

Europe and the US combined contribute about half of the users, with Asia – above all Singapore – accounting for most of the rest, he adds. But Greater China is the fastest growing section of the client base.

Hong Kong-based Caravel Group, a shipping and commodity trading conglomerate, is a very active user. Mary Li, head of Caravel’s fuel oil desk, says: “We are super-pleased with FIS Live. Our entire desk uses it on a daily basis to stay up to date.”

Uptake has been greatest among physical market participants, such as shipping firms or metals traders, says Deal. He suggests this may be because most of them do not have access to the Bloomberg or Reuters systems that financial traders may typically use.

“This may be the first time [physical traders] have been offered a tool like this – one that offers live pricing but also charting features as well as news and commentary,” agrees Tom Fox-Hughes, director of Asia at FIS.

We are super-pleased with FIS Live. Our entire desk uses it on a daily basis to stay up to date

Mary Li, Caravel Group

One user at a Singapore-based food and agri-business company that uses FIS Live two to four times a week, labelled it “fast and accurate” for pricing on bunker and oil movements.

Moreover, Anglo Swiss Maritime and Klaveness – British and Norwegian shipping companies, respectively – go to FIS Live as a vital point of reference for the latest prices before trading.

Financial participants find it helpful too. “Having real-time pricing for the FFA [forward freight agreement] markets is a real plus on FIS Live,” says one commodity and freight analyst at an algorithmic trading house. He also finds the different reports provided for specific commodities useful for following the markets on a daily basis.

FIS’s achievement is all the more impressive given that a team of just four people internally launched the app within nine months of deciding, in August last year, to start developing it.

Collecting and inputting the calendar-year 2019 historical price data was a mammoth task that required coordination across the various broking desks, adds Deal. It was made considerably harder by the pandemic.

“The process was very labour-intensive,” says Deal. “You simply don’t have access to many data points on some of the markets the app covers, like dry freight.”

It is easy to access live pricing for the iron ore and oil markets, for instance, adds Fox-Hughes. “But that is not the case for most of the other products we cover, without contacting a broker.”

Ultimately, FIS Live aims for a middle ground in terms of the level of information provided versus the cost of paying for a Bloomberg or Reuters terminal or a full data package from a specialist vendor, Deal says.

The underlying technology of FIS Live is proven rather than ground-breaking, but in terms of market usefulness and product coverage, it definitely breaks new ground.