# Derivative Contracts Freight Risk Management

*Last updated: 2026-06-23*

> Unlike physical freight procurement, derivative contracts in freight risk management transfer price exposure between parties without any cargo changing hands.

Unlike physical freight procurement, derivative contracts in freight risk management transfer price exposure between parties without any cargo changing hands. The most common instruments are Forward Freight Agreements (FFAs) and freight futures, settled against Baltic Exchange indices and cleared through central counterparties. A shipper with large planned volumes can buy FFAs to cap the rates it pays; a shipowner can use swaps to transfer earnings volatility to capital-market investors. Both sides gain budget certainty, but doing so requires banking relationships, active margin management, and a sound grasp of counterparty credit risk. Freight derivatives have long been standard in dry bulk and tanker markets; the container FFA market has grown in depth but remains less liquid than those more established segments.

**Source:** [https://www.balticexchange.com/en/data/derivatives.html](https://www.balticexchange.com/en/data/derivatives.html)

## Quick Facts

| Property | Value |
|---|---|
| Term | Derivative Contracts Freight Risk Management |
| Language | EN |
| Word count | 120 |
| Last updated | 2026-06-23 |
| Source | https://www.balticexchange.com/en/data/derivatives.html |

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