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



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
Alfred C Toepfer International
AM Nomikos
Amarante Shipping
Anglo American
Aquila Maritime Management
Aramco Trading
ArcelorMittal Treasury
Archer Daniels Midland
Arista Shipping
Augustea Shipping Services
AWB Singapore
Bank of Ireland
Bank of Nova Scotia
BHP Billiton
BHP Billiton Marketing Asia Pte
Bibby Line
BNP Paribas
BP Shipping
Brave Maritime
Brunei Gas Carriers
Business Intelligence Group
Calyon Asia Shipfinance
Cape Tankers
Castalia Fund Management (UK)
CBH Group
CC Maritime
Chandris (Hellas)
Chevron Shipping
China Navigation Co
Chinese Maritime Transport
Clipper Bulk
Clipper Group A/S
Coal & Oil Company
ConocoPhillips International
Constellation Energy
Conti Reederei
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
Enel Trade
Energy Argus
Equinox Maritime
Ever Wealth Shipping
Excel Maritime Carriers
Financial Conduct Authority
FinnFleet Tankers
Fitch Risk
Fokus Bank
Freight Force
GE Transportation Finance
Gestion Maritime
Getax Ocean Trades
Global Harvest Trading
Glory Ship Management
Golden Ocean Management
Great Eastern Shipping Co
Harmony Shipping
Hartree Partners
HF Navigator
Hochu Petroleum
Holman Fenwick Willan Singapore
HSH Nordbank
Hua Dao Shipping (The East)
Iino Shipping
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
M2M Management
Maersk Tankers
Maritime 24
Maritime and Port Authority of Singapore
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
Nexus Management
Nidera Handelscompagnie
Nordic Bulk Carriers
North of England P&I Assoc
NorthEdge Risk Services
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
Qawareb Ship Management
Quadra Commodities
RAG Trading
Redpath Sugar
Rio Tinto
Rio Tinto Shipping (Asia)
Royal Bank of Scotland
San Miguel Corporation
Scottish Power
Seasure Shipping
Seatrek Trans
Sims Metal Management
Singapore Exchange
Siva Bulk Shipping
SK Corporation
SK Shipping Co. Ltd
Sociedad Naviera Ultragas
Solar Agency
Standard Chartered Bank
Summit Maritime
Tailwind Shipping
Taipan Shipbrokers
TBS Shipping Services
The Lion Group
Thoresen & Co. (Bangkok) Ltd.
Thurlestone Shipping
Torvald Klaveness
Total Gas & Power
Tradition Financial Services
Transcenden Global
Transglobal Chartering
United Arab Shipping Company
Veson Nautical Corporation
Wallem Commercial Services
Waterfront Chartering
West Asia Maritime
Western Bulk