PROWRITER

  The daily fluctuations of shipping freight rates are of great importance to ship owners and charterers involved in the transportation of bulk commodities. The question is how the interested parties can manage the intense volatility and the freight risk to minimize the negative impact of fluctuations on the profitability of a vessel’s employment contract. The freight market is no different in its functionality from any other market like commodities or the stock exchange. The movement of freight rates is driven by the supply of vessels and seaborne demand. The supply and demand imbalances determine the evolution of freight rates along with other external factors, i.e. weather status, geopolitical issues, commodity prices. The oversupply of ships with decreased available cargoes results in lower levels of freight rates, while more cargo and fewer ships stimulate an upward direction. The equilibrium between vessels’ supply and demand-cargoes fuels a steady sentiment in freight rates wi