Old-economy giants plan cyber shipping exchange

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The oil giants BP Amoco and Royal Dutch/Shell said yesterday they had joined forces with Cargill, the commodity trader, and Clarksons, the world's largest shipbroker, to launch an internet-based exchange for the shipping industry.

The group said that the new company, which will be called LevelSeas.com, will revolutionise the multi-billion pound sector, offering a "life-of-the-voyage" solution for seaborne wet (oil products) and dry bulk commodity shipping.

It will provide freight management services, including market intelligence, online chartering, and risk management tools, including freight derivatives, they said.

The move is the latest venture by established old economy stocks to harness the power of the internet in a bid to cut costs and improve efficiency. Similar exchanges have been set up in the aerospace and supermarket industries.

LevelSeas is owned by the four backers but will function as a separate company. The sum invested in the venture, which will be launched in the autumn, was not disclosed.

The global bulk ocean transportation market has an annual turnover in excess of $100bn, (£62bn) according to consulting firm Booz Allen Hamilton.

The investors said that their participation would bring transactional volume and expertise to the electronic exchange, boosting its likelihood of industry-wide adoption.