News / 'Second coming' for FFAs as protection against ocean freight rate volatility

Largely ignored by container shipping industry since their inception over a decade ago, container freight derivatives are finally seeing increased use as shippers and forwarders seek tools to protect themselves against freight rate volatility.

Derivatives, alternatively known as forward freight agreements (FFAs), have long been an established part of the dry bulk and tanker markets, but for many years remained unused in container shipping.

However, that has begun to change, the extraordinary increase in rates the principal reason, according to freight forwarders.

“The ...