Dry Bulk Freight Rate Forecast

Optimize operational, financial and freight strategies through an analytics-driven forecast

S&P Global Freight Rate Forecast provides clients with an analytics-driven and unbiased view of the freight market, helping clients to find clarity in a volatile environment. Built in agreement with the Baltic Exchange, our model uses over 3,000 drivers from across S&P Global, utilizing our unique breadth and depth of knowledge to draw links between macroeconomic factors and the freight rates. With the use of machine learning and advanced analytics, the forecast is able to provide an unbiased market view that enables clients to unravel the complexities of the shipping market with ease. Our forecast provides weekly and monthly freight rate updates for up to three years, providing clients with the analytical rationale they need to make timely and efficient decisions.

The Freight Rate Forecast offers a valuable solution that helps you:

Capitalize on arbitrage opportunities by identifying trade signals
Gain valuable insights on the capesize, panamax and supramax market dynamics
Make smarter decisions based on an analytical rationale
Optimize operational efficiency with data–driven insights
Understand market conditions to mitigate risk to price exposure
Gain a granular understanding of market behavior and trends

Gain valuable insight into market trends

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Watch Stuart Strachan's comments on Freight Rate Forecast

Key Features:

Access to a web-based interface with dynamic dashboards displaying models’ results
- In-depth exploratory data analysis of main drivers per route/model, including model parameters
- Weekly Freight Insights highlighting relevant market events and trends
- Comprehensive monthly reports with in-depth analysis of future freight rate
Ad hoc analysis on industry related matters (ex: COVID-19 impact, Trade war, IMO2020)
Global monthly economic reports containing critical intelligence on key economies
Access to Dry Bulk Trade Flows & Forecast (+50 commodities)
Dedicated analyst team for continual qualitative support

S&P Global Freight Rate Forecast July 20 Update

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Methodology

S&P Global uses the most advanced modelling and statistical techniques to train its models in understanding historical relationships between industry related drivers (>3,000) and Baltic’s indices.

Using various combinations of drivers and modelling techniques, a number of forecast models are built to simulate freight dynamics under different market conditions.

These models results are assessed to ensure consistency of model parameters and out of sample accuracy (target >80%). Finally, the best performing modelling frameworks are selected and updated on a monthly basis.

The table below provides an overview of some key drivers used for the Freight Rate Modelling. The drivers contain data and trends from over 40 countries and approximately 50 commodities prices and spreads.

Demand Drivers	Supply Drivers
GDP Fixed Investment Industrial Production Production Price Index Consumer Price Index Retail Prices Bond Yields Interest Rates Exchange Rates Commodities Prices & Spreads Trade Volume of various commodities Freight Price & Spread	Ship Availability per region (AIS) Speed and Congestion Factor (AIS) Slow Steaming Ratio (AIS) Bunker Price of various regions Fleet Capacity (start/end year) Delivery Deletion Fleet Growth

See how the Freight Rate Forecast could help you:

The Freight Rate Forecast provides valuable data-driven insights to help organizations gain tighter control of all areas of their business.

Enhance Trading Strategy (FFA)

Benchmark S&P Global Freight Rate Forecast against Forward Freight Agreement (FFA) curve to identify trade signals and arbitrage opportunities
Mitigate price exposure in an increasing volatile market
Assess financial impacts ahead of market shifts

Optimize Operational and Commercial Strategy

Gain insight into short and long term market trends and shifts
Assess optimum portfolio and fleet mix: Understand what vessel types and routes/basins hold future profitability
Improve contractual and pricing strategy: Evaluate accurate time to enter or exit a contract, define contract length (Spot vs Period) and best pricing strategy (Fixed vs Index linked)

Improve risk management

Identify the risks arising from unexpected changes in freight rates
Simulate risk exposure under different market scenarios
Estimate future earnings of vessels to support financial decision
Assess risks of covenant breaches and repayment defaults

Utilize Analytics - Driven Information to Support Decision Making on Freight Market

Benchmark conventional in-house freight analysis against our data-driven model to help:

Research and consulting functions
- Evaluate alternative freight scenarios
- Understand influential macro drivers not covered within internal research
- Provide valuable insights on freight market dynamics backed by drivers exploratory data analysis

Financial and investment areas:
- Make decision related to budget process and revenue prevision
- Cash flow, return of investment and risk management
- Asset acquisition

Partnership

About The Baltic Exchange - The Baltic Exchange is the world’s only independent source of maritime market information for the trading and settlement of physical and derivative shipping contracts. The company has an international community of over 600 member firms, which encompasses the majority of world shipping interests, and commits to a code of business conduct encapsulated in the motto ‘Our Word, Our Bond’. Baltic Exchange information is used by shipbrokers, owners & operators, traders, financiers and charterers as a reliable and independent view of the dry and tanker markets.

Visit the Baltic Exchange Website.

Experts

Phoebus Kaloudis

Phoebus leads the S&P Global Market Intelligence Freight Rate Forecast team bringing expertise from both the financial and maritime industries. Having spent many years implementing Systematic and Algorithmic Arbitrage Trading and Risk Management techniques within the shipping industry his focus is now on ensuring the best in class delivery of Freight Rate Forecast.Phoebus spent ten years in the City of London working as a Risk Manager on most types of derivatives for many of the top ten investment banks. He has held Risk and Project Management positions at Deutsche Bank, UBS, Barclays, ING Barings and HSBC. He has also served as Global Head of Fixed Income Valuations for Commerzbank while he was the founder of a London consultancy firm offering services to the likes of JP Morgan as well as energy companies and refineries. The last 12 years from the post of Risk Officer he helped develop AMN Bulk Carriers. He has been hands on developing system and process solutions to accommodate the FFA Physical Arbitrage Risk trade, including a subsequent spin-off company called Freightmetrics which offered its services to Freight Traders and Shipping Operators in Asia and Europe.Over the years Phoebus has presented in various conferences and was asked to present FFA masterclass lectures by the Institute Of Chartered Shipbrokers and the Baltic Exchange.

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Daejin Lee

Daejin has participated in several maritime consulting projects such as freight and asset price forecast modelling, AIS analytics for fleet and commodities, shipbuilding market analysis, and global ports traffic analysis.He played a major role to build both (a) 'Freight Rate Forecast (FRF)', data driven freight forecasting models for dry bulk market, and (b) 'Bulkers at Sea' module of Commodities at Sea, global commodity and freight analytics tool based on historical regional fleet and AIS information including position, cargo, ballast/laden ratio, anchored/moored status, speed, employment etc.Daejin is a regular speaker about shipping and commodities markets at global events and seminars, including SGX iron ore forum in Singapore, Djakarta Mining Club coal conference in Jakarta, and Baltic Exchange Freight Forum in Copenhagen and Singapore, Maritime market seminar in Geneva, Tokyo, and Beijing, and Korean Congress' maritime forum in Seoul.He was recently invited to lecture at Institute of Chartered Shipbrokers and Baltic Exchange annual webinar on 'Shipping Market Cycles and Forecasting' with nearly 1,000 registered for the sessions in Europe and Asia in November 2020.Before joining S&P Global, Daejin spent several years at Hanjin Shipping as a FFA trader and shipping analyst where he gave regular presentations to key trading houses and several energy companies about freight and commodity markets. He was also responsible for freight market risk management by providing timely market information, trading freight derivatives and giving expert guidance on long-term and short-term fleet chartering and acquiring or selling ships.Since he started his career at dry bulk chartering team in 2008, he has valuable experience in shipping and commodities markets, which provided him with a deeper understanding of what internal and external audiences or clients really need in their daily business.Daejin studied English Literature both in Seoul (KU) and London (RHUL) and graduated as a Bachelor of Arts from Korea University.

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Rahul Kapoor

Rahul leads an integrated commodity analytics product management, data science and research team. As a business head, he is responsible for driving new product growth for our analytics products Commodities at Sea and Freight Analytics. A subject matter expert in the maritime industry and financial markets, Rahul is a thought leader with proven credentials in market analysis forecasting, shipping economics and commodity market developments. He is a regular speaker at major conferences and client events globally, and is frequently interviewed by both print and visual media. Most recently, he was at Bloomberg Intelligence and earlier headed Drewry Financial Research Services Ltd. He has also worked as senior equities analyst at RS Platou Markets and Nomura.Rahul holds a Bachelor of Science in Marine Engineering from BITS, Pilani and a Postgraduate in Management from IMI, New Delhi, India.

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Pranay Shukla

Pranay, research and analysis associate director within the Maritime, Trade & Supply Chain team at S&P Global Market Intelligence, focuses on dry bulk commodities and freight. His responsibilities include coordination of global bulk commodities market analysis deliverables such as building a global as well as regional supply and demand balance, short to medium-term forecasts, cost projections, and asset ownership league tables. He also assists with scenario analysis and provides support for Multiclient Studies.Before joining S&P Global Market Intelligence, Pranay worked for Mercuria Energy Trading as a senior analyst covering dry bulk commodities and freight, and for Drewry Shipping Consultants, where he analyzed global LNG and LPG markets.Pranay is a Postgraduate in Management and is a Member of the Institute of Chartered Shipbrokers, Singapore branch.

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Fotios Katsoulas

Fotios focuses on the seaborne trade of crude oil and its impacts on the shipping cycles and investors' decisions, drawing from his experience in commercial shipping sectors such as crude oil and oil product tankers, LNG and LPG carriers, MODU and OSV. Previously, he gained experience in using the latest technology to provide better insights more quickly and more frequently to the shipping industry and to associated finance and insurance providers. As head of research for Affinity Shipping LLP and as shipping analyst for Maritime Strategies International Ltd., he managed big shipping data, developed shipping cycle econometric models, and assisted with advisory projects and valuations for major international shipping banks and financial providers. Fotios regularly attends international shipping industry conferences and has professional experience in operational research and corporate presentations.He holds a Master of Science in shipping, trade and finance from Cass Business School, City University London, United Kingdom.

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Dry Bulk Freight Rate Forecast

Optimize operational, financial and freight strategies through an analytics-driven forecast

Watch Stuart Strachan's comments on Freight Rate Forecast

Key Features:

Methodology

See how the Freight Rate Forecast could help you:

Partnership

Experts

Phoebus Kaloudis

Daejin Lee

Rahul Kapoor

Pranay Shukla

Fotios Katsoulas