Aside from a company’s own internal processes to facilitate trading FFAs, they will need to onboard with a broking firm with an FFA desk.

The FFA market is voice-brokered and so the broker is fundamental to facilitating a trade. FFA brokers are usually attached to established physical shipbroking firms and specialise in freight

FFA brokers must comply with local monetary regulators (e.g. in the UK, the Financial Conduct Authority, UK FCA) and will have undertaken several regulatory examinations and police background checks before they are authorised to act by such bodies. As such, they have a mandatory KYC policy which companies must complete before they are eligible to use their services.

An FFA broker will provide colour on the FFA market and will advise the pricing they hold by either telephone call, instant messaging, or a dedicated client line (“squawk box”). All means of communication are recorded. All bids and offers are also kept anonymous so that when a trade occurs, neither party will know who their counterparty is.

A company will typically onboard with more than one broking shop with the aim to have a more comprehensive view of the market and pricing, but not so many as to be unmanageable.

FFA brokers charge a commission for their services, usually a set percentage of the notional value of the trade, but some markets charge a fixed amount, such as containers which is a price per box.

A list of Baltic FFA brokers can be found here: under “Forward Assessments” and “Options Assessments”.

Please reach out to them individually to find out more about how they can help you.