How the FCPI measures freight cost pressure

Purpose and scope

The FCPI measures input cost pressure on freight transportation. It does not measure freight rates directly. Instead, it tracks the upstream signals (fuel prices, carrier capacity decisions, regulatory surcharges, and currency movements) that drive the variable portion of freight invoices.

The index is designed for C-level executives, procurement leaders, logistics managers, and finance teams. For CEOs and CFOs, freight is typically the second or third largest expense on the P&L: the FCPI provides forward visibility into how that line item is moving, and why. For procurement and operations teams, it provides the granularity needed to anticipate cost changes before they appear on invoices. The typical forward window is 1 to 3 months for fuel-driven changes and up to 12 months for capacity and regulatory shifts.

10 trade lanes

The FCPI covers 10 trade lanes selected to represent the major global freight corridors and the two largest domestic markets. Each lane has its own composite reading, reflecting the distinct cost drivers on that route.

Lane selection is based on trade volume (TEU and tonne-km), strategic chokepoint exposure, and data availability from public sources.

Five pressure layers

Each trade lane reading is a composite of five independent pressure layers. This decomposition allows users to see not just that costs are rising, but where the pressure originates.

Each layer is computed independently per lane and per modality, then combined into the headline composite. The decomposition is the key difference between the FCPI and single-number indices: when the FCPI moves, you can see which layer is responsible.

Data sources

The FCPI draws from a network of public and commercially licensed data sources spanning energy markets, currency exchanges, freight benchmarks, port and airport throughput, and geopolitical intelligence. No client-specific data is used in the computation. Every reading can be traced to its source.

Base period and reading

The FCPI uses January 2026 as its base period, set to 100. All subsequent readings are relative to this baseline.

• FCPI = 100: Cost pressure is at the same level as January 2026
• FCPI = 134: Input cost pressure is 34% above the January 2026 baseline
• FCPI = 92: Input cost pressure has decreased 8% from the baseline

The base period was selected to represent a period of relative market stability before the current crisis cycle. The baseline is fixed and is not rebased during periods of market stress. This ensures that readings remain comparable over time and that a CFO budgeting against the January baseline can directly read the deviation.

Three modalities

Each trade lane is decomposed into three transport modalities, each with its own cost pressure dynamics:

• Ocean: Driven by bunker fuel markets, container capacity cycles, and maritime chokepoint disruptions. Typically the most volatile during geopolitical crises.
• Air: Driven by aviation fuel markets, belly capacity on passenger flights, and seasonal demand patterns. Responds to energy shocks with a different lag than ocean.
• Road: Driven by regional diesel markets, trucking capacity, and domestic regulatory changes. Most localised of the three modalities.

The modal decomposition matters because different modalities respond to different signals at different speeds. A commodity price shock does not reach all three modes at the same time or with the same intensity. The FCPI captures these distinct transmission timings.

For each trade lane, the FCPI produces both a headline composite (blending all three modalities) and individual modal readings. The Pro report includes all three; the Free report shows only the composite.

Publication cadence

The FCPI is published on a weekly cycle:

• Friday: Official weekly readings for all 10 trade lanes, all three modalities. This is the reference publication.
• Intra-week updates: If any monitored lane moves more than 5% from the previous Friday reading during the week, an unscheduled update is published with the affected lane(s).
• Daily monitoring: Signals are captured daily (Monday through Friday) and compared against the previous official reading. This internal pulse check drives the 5% trigger mechanism.

All readings carry an ISO week number (e.g., W15 for the week of April 7, 2026) and a publication date. Historical readings are retained and versioned.

Variable vs fixed costs

Understanding what the FCPI does and does not measure requires understanding the structure of a freight invoice:

Fixed portion (not measured by FCPI)

• Base freight rate (contractually locked for the contract period)
• Terminal handling charges (typically fixed or reviewed annually)
• Documentation fees

Variable portion (measured by FCPI)

• Fuel surcharges (BAF, FSC, EFS) tied to fuel indices
• Currency adjustment factors (CAF) tied to FX pairs
• General rate increases (GRI) driven by capacity constraints
• War risk, piracy, and emergency surcharges tied to geopolitical events
• Congestion surcharges tied to port/terminal capacity

The variable portion typically represents 30 to 52% of total freight cost, depending on modality and trade lane. Ocean-heavy portfolios tend toward the higher end; road-heavy portfolios toward the lower end.

Forward scenarios

Beyond the current week's reading, the FCPI projects three scenario paths per trade lane over a 1 to 12 month horizon:

Each scenario carries a confidence label and is calibrated against five historical crisis precedents: the COVID-19 supply chain disruption (2020-2021), the Red Sea/Houthi diversion (2024), the Suez Ever Given blockage (2021), the Russia-Ukraine conflict impact (2022), and the Strait of Hormuz escalation (2025-2026).

Quality and auditability

The FCPI is built on three quality principles:

Source traceability

Every data point carries a provenance tag. When a reading changes, the source data that drove the change is identifiable and dated. There are no interpolated or estimated values without explicit labeling.

Versioning

Every weekly reading is permanently versioned. If a correction is needed (e.g., a source agency revises a data point), a new version is published with a changelog. Historical readings are never silently overwritten.

Self-correction

The FCPI includes a feedback mechanism that compares its forward projections against actual outcomes. When projections deviate from realized values, the model's parameters are adjusted. This creates a track record that can be audited: prediction accuracy, direction accuracy, and confidence band calibration are all measured and published.

Current track record: 87% directional accuracy across 652 predictions since January 2026.

Limitations

The FCPI is a useful tool, not a perfect one. Users should be aware of the following limitations:

• Spot market focus: The FCPI measures cost pressure on spot and variable-rate freight. For long-term contracted rates with fixed surcharge clauses, actual exposure may be lower than the FCPI reading suggests.
• Public data dependency: The FCPI relies on publicly available market data. If a source delays publication or changes methodology, affected readings are flagged but may carry lower confidence for that period.
• Aggregation: Each trade lane is a corridor average. Individual origin-destination pairs within a lane may experience different pressure depending on local conditions.
• Crisis non-linearity: In extreme events (full chokepoint closure, war escalation beyond precedent), the FCPI's historical calibration may understate actual outcomes. Scenario bands attempt to capture this, but black swan events by definition exceed model assumptions.
• No carrier-specific rates: The FCPI measures market-level input pressure. Individual carrier surcharge formulas, update cycles, and commercial practices vary. The index does not model individual carrier behaviour.

Comparison with other indices

The FCPI occupies a different position in the market intelligence landscape than existing freight indices:

These indices are complementary, not competitive. Drewry and SCFI tell you what the market charged last week. Xeneta tells you what others paid. The FCPI tells you where cost pressure is building next. Used together, they provide a complete picture: backward verification and forward anticipation.