The state of freight

The recent steep increase in activity in freight derivatives, or forward freight agreements (FFAs), is leading to more complex products being developed around the freight market.

Total reported trade volumes in the dry bulk FFA market increased by 34% in 2007 to reach 1,868,601 lots (a lot being a day's hire of a vessel or 1,000 tonnes of ocean transportation of cargo), according to the London-based Baltic Exchange.

In the tanker (wet) market, FFA volumes were estimated at 374,870,440 tonnes trade