Theory and Practice of Shipping Freight Derivatives

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