Shanghai Shipping Exchange plans to establish a container shipping derivates market by the end of 2010 as the city strives to challenge London as a global centre for shipping finance.

The forward freight agreements will be targeted at small and medium-sized shippers whose volumes are not large enough to warrant long-term shipping contracts, said Yao Weifu, a director at the shipping exchange. The plan is awaiting government approval.

Last year, the Shanghai Containerised Freight Index was launched to act as a benchmark for container shipping futures. The weekly index tracks spot rates for shipments on 15 routes, including ones to Europe, the Mediterranean and the US. The data, compiled from 15 shipping lines and 15 freight forwarders, reflects more than 60 per cent of global container shipping, according to Yao.