Forward Freight Agreements
FFAs are financial derivatives that settle against Baltic Exchange indices. They allow shipowners to lock in revenue and charterers to lock in costs — or traders to take speculative positions. FFAs trade OTC and on ICE. The market is primarily for Capesize and Panamax routes.
Key Concepts
Resources
- Baltic Exchange
Publisher of the BDI and all major freight indices. The pricing authority for dry bulk and tanker freight markets. Daily indices, route assessments, and market data.
DataFreeBaltic Exchange
- ICE FFA Trading Guide
ICE Futures' guide to trading Forward Freight Agreements. Covers contract specs, settlement, margining, and available routes for Capesize, Panamax, and Supramax FFAs.
ToolFreeICE
Learning Path
FFA Contract Structure and Route Mapping
FFAs settle against route indices, so exposure quality depends on accurately mapping physical books to cleared paper routes.
2 case studies →
Margining, Liquidity, and Stress Management
FFA programs are capital-intensive during volatility, making margin planning and liquidity buffers central to survivable risk frameworks.
2 case studies →
Cross-Commodity Hedge Links and Correlation Drift
Freight derivatives often hedge commodity books indirectly, so correlation drift and regime shifts must be treated as primary risks.
2 case studies →
Key Players
Trafigura
Geneva, Switzerland
The second-largest private commodity trader. Trafigura focuses on oil and petroleum products, metals, and bulk commodities. Known for aggressive trading strategy and significant infrastructure investments in ports and storage.
Revenue model
Physical commodity trading margins + logistics infrastructure. Structured finance (prepay deals with producers) as a competitive weapon. Owns Impala terminals and other port assets.
One of the largest oil traders; pioneered prepay finance deals with African state oil companies
WebsiteFinancial Snapshot
Private estimateFY
2024
Revenue
200-300bn
EBITDA
8-15bn
Net Income
2-7bn
Confidence: low · Source: Company disclosures and market estimates
Private company ranges, not audited public filings.
Glencore
Baar, Switzerland
The world's largest commodity trader by revenue and one of the largest mining companies. Glencore trades everything from coal and copper to oil and agricultural products. Founded by Marc Rich, now headquartered in Baar, Switzerland.
Revenue model
Margin on physical commodity trades + mining/production equity. Profit from information asymmetry, logistical edge, and balance sheet to hold inventory. Marketing (trading) and industrial (mining) segments.
Largest coal trader globally; controls ~10% of seaborne thermal coal trade
WebsiteMarket Snapshot
STALELSE:GLEN (GBP)
Price
N/A
Daily Change
N/A
Market Cap
N/A
P/E
N/A
As of 2026-03-21T00:00:00Z · Source: Pending first automated market snapshot run
Financial Snapshot
Public filing derivedFY
2024
Revenue
$217bn
EBITDA
$17.0bn
Net Income
$4.3bn
Confidence: medium · Source: Glencore annual reporting (rounded)
Rounded values for educational orientation.
Gunvor
Geneva, Switzerland
Originally an oil trading company with deep Russian ties, Gunvor has diversified into LNG, coal, and power. Now fully independent after divesting Russian assets. Known for trading speed and opportunistic positioning.
Revenue model
Physical commodity trading with a strong focus on risk-taking and arbitrage across energy markets.
Once the largest trader of Russian crude; successfully pivoted after 2022 sanctions
WebsiteFinancial Snapshot
Private estimateFY
2024
Revenue
100-170bn
EBITDA
3-8bn
Net Income
0.8-3.0bn
Confidence: low · Source: Company disclosures and market estimates
Private-company metrics normalized to USD ranges.