The VV Indices, calculated daily

What are they?

These are synoptic indicators of vessel values. Much like the well-known global equities indices, such as the Dow Jones Industrial Average or the FTSE 100, their purpose is to give a general picture of the state of the Sale & Purchase market rather than specific information about any one vessel or vessel type.

What makes them different?

The VV Indices are measured in units which have a real economic meaning. Many indices, both in shipping and elsewhere, are simply set to an arbitrary value (usually 100 or 1,000) on a particular date. All subsequent values are then relative to the value on this date, which means that they reflect only market movements and not the absolute values of the underlying assets they represent. We were convinced it would be far more meaningful to our customers to offer indices denominated in US dollars per deadweight tonne, which is a true measure of the intrinsic value of cargo-carrying capacity.

How are they calculated?

For each vessel type (VLCC, Capesize, etc.) we value all the vessels in our global fleet database and calculate the value per deadweight tonne for each build year. These annual figures are then averaged to form an index for the type. Partitioning by build year ensures that the type index is not influenced by orderbook considerations, for example, it does not increase simply because a large number of new vessels have just been delivered.

The overall index is obtained by taking a weighted average of the type indices, where the weighting is proportional to the total value of the vessels in the type. This ensures that the economic importance of each vessel type is reflected appropriately in the index. Separate indices are produced for tankers and bulkers and each is displayed along with its daily change in absolute and percentage terms.

It is only by automating the vessel valuation process that sophisticated market indicators like these can be produced. Our hope is that they find a place among the most widely accepted barometers of asset values in the shipping industry.