As an inherently volatile industry, shipping is characterised by a high risk-high return profile, making its rates and prices difficult to forecast, and as a consequence business projects less accurately budgeted. Thus, the identification and management of any such business risks is imperative. This can make the difference between success or failure when contending with the adverse price movements of the market, and the intense competition which exists in this global industry.
Freight rates and their fluctuation constitutes the most significant source of business risk. Its increasing recognition has brought with it a significant amount of derivative products, which have begun to offer more effective, flexible and cheaper ways to manage risk. This has become particularly pertinent following the global financial crisis. The book provides practical coverage of shipping freight rate derivatives, detailed by leading expert practitioners in the field, offering best practices from divergent and different points of view.
Chapters, among others, include:
. The Structure of the Freight Derivatives Markets
. Credit Risk and the Benefits of Clearing Services
. The Shipowner’s and Charterer’s View and Practice of Freight Derivatives
. The Bankers’ Perspective of Freight Derivatives
. Accounting and Tax, perspectives
. Setting up a Freight Rate Risk Management Department
- Book 9781906348489xy / EBook 9781908823335
- Publish date
- 1 Feb 2011
- 155mm x 235mm
Table of contents
1. Introduction to the Theory and Practice of Shipping Freight Derivatives
Prof. Manolis Kavussanos, Athens University of Economics and Business
Dr. Ilias Visvikis, ALBA Graduate Business School
2. The Structure of the Freight Derivatives Market
Alex Gray and Janet Sykes, Clarksons Securities Limited
3. The Role of the Baltic Exchange in the Freight Derivatives Market
Jeremy Penn, the Baltic Exchange
4. Credit Risk and the Benefits of Clearing Services in Freight Derivatives
Isabella Kurek-Smith, LCH.Clearnet
5. The Shipowner’s View of Shipping Freight Derivatives Trading
Demetris Nenes, OceanFreight Inc.
6. The Charterer’s View of Freight Derivatives
Stefan Albertijn, Baltic Exchange Freight Market Information Users Group
7. Forward Freight Agreements – The Brokers Perspective
Duncan Dunn, SSY Futures Ltd.
8. The Banker’s View in Freight Derivatives
Alex Orfanidis, ABN AMRO Bank N.V.
9. The use of Technical Analysis in FFA trading
Georgi Slavov, ICAP Plc.
10. Accounting and Tax Issues in Freight Derivatives
Vassos Vrachimis, PricewaterhouseCoopers LLP
11. Legal Framework of Freight Derivatives
Damian Honey and Andrew Johnston, Holman Fenwick Willan LLP
12. Electronic Trading Software Needs
Michael Lolk Larsen, Triple Point Technology
13. Setting up a Freight Derivatives Desk
Stephanos Pissis, Statoil ASA
“Bulk ocean shipping is often characterized as commodity-like with similar pricing patterns and trading dynamics. It is a fragmented industry where the collective daily decisions and actions taken by thousand of owners, charterers, cargo suppliers, receivers and bankers cumulatively effect and create its volatile nature. Once again the authors advance the understanding of this dynamic, challenging and fascinating industry.”
Michael E. McClure, Executive Vice President, Navios Maritime Holdings, Inc.
"In the highly volatile shipping market, where freight derivatives are of paramount importance, Professor Kavussanos and Dr. Visvikis are, once again, breaking new ground. This book combines, in an ideal way, the theory and the educational approach with practical guidelines.
Not only does it captivate the essence of hedging, but it also offers to the reader the experience of leading expert practitioners.
It will, definitely, contribute greatly to the better understanding, administering and implementation of shipping freight derivatives."
George Skrimizeas, General Manager, ALLSEAS MARINE S.A
"With the shipping freight derivatives industry having experienced significant development and extreme volatility since the days of Biffex, education is still of paramount importance both in the academic area and the industry as a whole. This book stands out, having leading practitioners sharing their experience and providing valuable insight into the fundamentals applied in the field. A recommended read for anyone seeking deeper understanding of the practical application of shipping freight derivatives!"
Ola Strand Andersen, Managing Director, Imarex Asia Pte Ltd