Freight

The Science

Our research focuses on the volatility of wet and dry freight markets, highlighting the economic, seasonal, and geopolitical factors driving these fluctuations.

Wet Freight Volatility

We have conducted extensive research to analyse the wet freight rate volatility of the Middle East to China (TD3C) market.

Dry Freight Volatility

Our analysis of the capesize (CPTM) and Panamax markets has identified the key drivers of dry freight volatility beyond fuel price alone.

Freight-Fuel Correlation

An in depth study has shown a delayed correlation between freight rates and fuel prices, highlighting the effectiveness of freight rate insurance to counteract the time lag.

The Problem

Elevated Uncertainty

Freight rate volatility is a critical risk to the maritime industry. Paratus policies reduce the adverse impact of freight rates, so that margins and earnings are protected. Unlike other types of freight insurance or traditional hedging products, such as freight forward agreements, Paratus policies offer flexibility for managing a key business input.

The Solution

Bankability

Paratus transfers risk via globally rated AA- or better financial institutions including Lloyd’s of London which enhances the financial security offered to clients.

Tax Benefits

The premium may be tax deductible subject to the tax jurisdiction.

Transparent Fixed Cost

Policies are priced transparently, in a simple to understand format. The insurance premium is fixed and paid at the start of the policy. Verified claims are paid automatically and within 10 days.

Rapid Onboarding

The policy is accessible to all, there is no credit bias. The onboarding process is straightforward and a policy can be written within two weeks. In addition, a Paratus freight rate policy pays within 10 days of a validated proof of loss.

Easy to Manage Solution

The policy is simple and scalable. Without the requirement for additional operational resource. It eliminates the need for forward freight agreements (FFAs), providing improved risk coverage with less exposure to mark-to-market volatility.

Navigating Regulation

The policy enables the shipping industry to protect revenue, allowing for greater capital allocation to meet regulatory requirements and sustainability goals.

Case Study

Managing Freight Rate Volatility

Freight rates are shaped by various factors including wars, natural disasters, geographical bottlenecks, and regulatory changes. With the frequency and intensity of these events increasing, volatility in freight rates has become a critical concern for shipowners and charterers.

Read More