This innovative course is designed to raise market awareness of risks involved in shipping businesses and how various physical and derivatives instruments can be used to control such risks efficiently and effectively.
| Course Leaders | ||
Prof. Amir Alizadeh |
Centre for Shipping, Trade & Finance |
Bayes Business School (former Cass Business School) |
Prof. Nikos Nomikos |
Centre for Shipping, Trade & Finance |
Bayes Business School (former Cass Business School) |
Shipping markets are becoming increasingly risky as fluctuations in freight rates and ship prices have increased substantially in recent years. This calls for prudent control of freight rates, ship values, bunker price, credit, foreign exchange and interest rate risks, which are all part of the shipping investment and day to day operating activities.
The module is delivered over two days by experts in the areas of shipping and commodity risk management. Using a variety of real life examples, the course demonstrates how risk can affect cash flows from operating activities along with an in-depth analysis of theoretical and practical aspects of risk management instruments in shipping.
By attending this course participants will learn how to analyse and measure the impact of financial risks involved in shipping investment and operations, and how to select and execute effective strategies to minimise or eliminate such risks, stabilise their cash flow and maximise the return on investment more efficiently.
The course leaders, Prof. Amir Alizadeh and Prof. Nikos Nomikos of Bayes Business School (former Cass Business School), are both internationally recognised academics in the fields of shipping and commodity finance, and risk management. Their theoretical and applied research work has been published in leading academic and professional journals and they also provide consultancy services to the industry on different aspects of commodity and shipping risk management.
Please click here for our 2024 course brochure.
Course Overview
| Module Outlines | ||
Introduction to Shipping Risk
|
The Shipping Markets |
Global seaborne trade & fleet Market segmentation and sectoral differences Types of shipping contract Supply/demand and freight market economics Spot and TC freight rate formation |
Introduction to Shipping Risk |
Risk management concept and practice Risk assessment and estimation Comparison of risks across different shipping sectors and contracts |
|
Freight Market Information
A brief overview of risk in the shipping industry. We discuss types of shipping contracts; sources of risk; market segmentation and sectoral differences; and compare risk across different shipping markets.
|
Part 1: Dry Indices
|
Baltic Exchange index construction methodology Dry market information |
Part 2: Tanker and Gas Indices
|
Wet and gas market information Container index Operating costs assessments |
|
Freight Rate Risk Management Using FFAs
Freight market information; the practicalities of FFA trading; documentation and settlement; electronic trading; FFA and hedging examples for spot, time-charter, container and tanker routes.
|
Part 1: Risk Management Process |
Risk management process Why managing freight matters Key terminology FFAs: owner and charterer hedging examples |
Part 2: Credit Risk &Clearing
|
Market liquidity Credit risk and clearing |
|
Part 3: Hedging Examples |
Tanker voyage example Simple tanker hedge ration calculation Dry bulk TC example Tanker trend hedge Index linked contracts Shipping ETF |
|
Freight Rate Options
Option terminology; using freight options for hedging; option trading strategies; freight options pricing.
|
Part 1: Freight Rate Risk Management Using Options
|
Types of contract: European, American, Asian Freight options & payoff profiles Factors determining option value Freight options & trading activities |
Part 2: Freight Rate Options |
Using freight options for hedging Option hedging strategies Protective put, covered call, collar Freight options pricing Closed form solution, simulation |
|
Bunker Risk Management
Bunker market fundamentals; importance of bunker risk management in shipping; use of bunker derivatives; forward bunker contracts (hedging and trading); options on bunker prices.
|
Part 1 |
What is bunker (fuel oil)? World bunker market Bunker price risk in tramp shipping |
Part 2 |
Use of derivatives for bunker risk management Bunker futures contracts Forward bunker contracts Bunker swap contracts Examples of hedging with futures, forward and swap contracts |
|
Part 3 |
Bunker price options Caplet, Cap, Floorlet, Floor Hedging examples using caps and collars Other issues in bunker hedging |
|
Financial Risk Management in Shipping
Interest rate risk; financing examples and sources of interest rate risk; hedging interest rate risk using forwards and futures. |
Financial Risk Management in Shipping |
Interest rate risk in shipping loans Managing interest rate risk Forward Rate Agreements Interest Rate Swaps Interest Rate Options FOREX risk in shipping Currency Swaps |
Case Study on Shipping Risk Management
Integrating all aspects of shipping risk; presentation of the case; using spreadsheets to solve the case.
|
Case Study: Analysis of Hedging Cash Flows |
Purchase and operation of a capesize vessel |
Ship Price Risk Management
Portfolio theory; diversification and risk return optimisation; Baltic S&P, Recycling, OPEX assessments.
|
Part 1
|
Vessel valuation Ship price volatility estimation Comparison of ship risk across size, age and sector |
Part 2 |
Portfolio theory and diversification Baltic Sale & Purchase Assessments Development of derivatives on ship prices Cross hedging ship prices using FFAs |
|
Value at Risk (VaR) in Shipping
Estimating volatility (daily vs yearly); measuring and estimating VaR: single asset vs multi-asset portfolio; VaR methodologies; examples of estimating VaR of FFA portfolios. |
Value at Risk in Shipping Risk Management |
Risk management cycle VaR and Expected Shortfall VaR calculation for hull to debt ratio Portfolio VaR Backtesting and stress testing VaR models |
Credit Risk in Shipping
Probability of default vs loss given default; how to measure credit risk (qualitative vs quantitative methods); credit risk and credit ratings; credit risk management in shipping; credit derivatives and credit risk management in shipping.
|
Part 1: Credit Risk Assessment and Management |
What is credit risk? Sources of credit risk in shipping Credit risk assessment |
Part 2: Credit Risk Management |
Methods of credit risk management Collaterization Diversification Downgrade triggers Credit derivatives Credit default swap Total return swap Credit spread option Charterer default insurance |
|
Terms and Conditions
The Baltic Exchange must be in receipt of full payment before access to the course is granted.
For the e-learning course, each delegate is provided with 180 days access to the course. If you fail to complete the course in 180 days, then you may extend the course by paying a change fee (£50 + vat per 30 days). No course material may be copied or reused without the permission of the Baltic Exchange.
You must not allow any third party to use your account information and/or computing equipment to access the digital content or course that you have booked. You may only print off any course materials for your own personal use. You must not provide, offer to sell, license or transfer the course materials (whether in whole or in part in any manner or form or in or on any media) to any other person unless we have agreed to this in writing.
In the event that we are unable to deliver classroom learning due to events beyond our control, delegates will be offered the choice of a discounted online only option, refund, reschedule to a future date, or access to an additional online course.
Further Questions
Please contact:
Tel: +44 (0)20 3326 8465
Email: [email protected]
Previous Attendees
Run since 2005, this course has been attended by a huge range of shipowners, charterers, brokers and financial institutions with an exposure to the bulk shipping markets. These include:
A Bilbrough & Co
Aalborg Portland
ABN Amro Futures
Aegean Baltic Bank
AET Tankers
AgriService
Alfred C Toepfer International
AM Nomikos
Amarante Shipping
Ammagi
Anglo American
Aquila Maritime Management
Aramco Trading
ArcelorMittal Treasury
Archer Daniels Midland
Arista Shipping
Augustea Shipping Services
AWB Ltd
AWB Singapore
Bahri
Bank of Ireland
Bank of Nova Scotia
BHP Billiton
BHP Billiton Marketing Asia Pte
Bibby Line
BIMCO
BNP Paribas
BP
BP Shipping
Brave Maritime
Brunei Gas Carriers
Bulcom
Business Intelligence Group
Calyon Asia Shipfinance
Canpotex
Cape Tankers
Castalia Fund Management (UK)
CBH Group
CC Maritime
Chandris (Hellas)
Chevron Shipping
China Navigation Co
Chinese Maritime Transport
Clarksons
Clipper Bulk
Clipper Group A/S
Coal & Oil Company
Commodities
ConocoPhillips International
Constellation Energy
Conti Reederei
Copenship
Copersucar
Credit Suisse
CSAV Norasia Liner Services
CSL Asia Shipping
CSL International Inc.
D’Amico Dry
Dae Yang Shipping
Denholm Coates
Dome Chartering
Drax Power
DVB Bank
Dynacom Tankers
Eastport Maritime
Eastern Bulk Carriers
EDF Trading
Eitzen Bulk
Electric Power Development Co
Emarat Maritime
Emirates Ship Investment Co
Endesa
Enel Trade
Energy Argus
Equinox Maritime
Ever Wealth Shipping
Excel Maritime Carriers
Fednav
Femis
Financial Conduct Authority
FinnFleet Tankers
Fitch Risk
Fokus Bank
Foresight
Freight Force
GE Transportation Finance
Genco
Genshipping
Gestion Maritime
Getax Ocean Trades
GFI-ACM
Glencore
Global Harvest Trading
Glory Ship Management
Golden Ocean Management
Great Eastern Shipping Co
Grindrod
Harmony Shipping
Hartree Partners
Heidmar
HF Navigator
Hochu Petroleum
Holbud
Holman Fenwick Willan Singapore
HSBC
HSH Nordbank
Hua Dao Shipping (The East)
Iino Shipping
ING
Intermar
Ispat Industries
J. Lauritzen USA
Jera Global Markets
Jiaotong University
John F Dilon
Klaveness Asia Pte Ltd
Kredittbanken ASA (Osloavd)
Laskaridis Shipping
Lei Teng Shipping
Leros Management
Lykiardopulo
M2M Management
Maersk Tankers
Maritime 24
Maritime and Port Authority of Singapore
Masterbulk
McTaggart Shipping & Management
Mercator Lines (Singapore)
Merrill Lynch Commodities
Midship Marine
Mitsui OSK Bulk Shipping (Europe)
Mitsui & Co
Mitsubishi Corp
Mittal Shipping
Motia Compagnia di Navigazione
MT Maritime Management
MUR Shipping
Murmansk Shipping
National Bank of Fujairah
Navico International
Navitramp
Newlead
Nexus Management
NIBC Bank
Nidera Handelscompagnie
Norden
Nordic Bulk Carriers
North of England P&I Assoc
NorthEdge Risk Services
Nuon
NYK Bulkship (USA)
Ocean Tankers
Oceania Impex
Odin Marine
Olam International
Oldendorff Carriers
OSG Ship Management
OW Bunker
Pacific Basin
Pacific Rim Shipping
Petco Trading
Phoenix Bulk Carriers
Poten & Partners Inc
Prime Marine
PT BCA Tbk
Qawareb Ship Management
Quadra Commodities
RAG Trading
Redpath Sugar
Repsol
Reuters
Rio Tinto
Rio Tinto Shipping (Asia)
Royal Bank of Scotland
RWE
San Miguel Corporation
Scanmills
Scottish Power
Seasure Shipping
Seatrek Trans
SGX
Shell
Sims Metal Management
Singapore Exchange
Siva Bulk Shipping
SK Corporation
SK Shipping Co. Ltd
Sociedad Naviera Ultragas
Solar Agency
Standard Chartered Bank
Statoil
Suek
Summit Maritime
Tailwind Shipping
Taipan Shipbrokers
TBS Shipping Services
Teekay
The Lion Group
Thoresen & Co. (Bangkok) Ltd.
Thurlestone Shipping
Torm
Torvald Klaveness
Total Gas & Power
TOTSA
Tradition Financial Services
Trafigura
Transcenden Global
Transglobal Chartering
Triworld
United Arab Shipping Company
Veson Nautical Corporation
Viterra
Wallem Commercial Services
Waterfront Chartering
West Asia Maritime
Western Bulk
Worldscale
Zim