Lecture 2: Introduction to Freight Markets Flashcards
What is a freight market?
A platform where shipping services are bought and sold, connecting cargo supply with vessel demand.
What happens in a charterer’s market?
More ships available → Lower freight rates → Charterers have bargaining power.
What happens in an owner’s market?
More cargo, fewer ships → Higher freight rates → Shipowners have bargaining power.
What does the Baltic Dry Index (BDI) track?
It tracks bulk freight rate trends (excludes tankers).
Name the vessel types in the dry bulk market.
Handysize, Supramax, Panamax, Capesize.
Which dry bulk vessel type does not have an index?
Handysize.
What are the key trade routes for the dry bulk market?
Australia-China (iron ore), US-Europe (grain).
What are the key factors influencing dry bulk freight rates?
Global events, commodity demand, port congestion, seasonal variations.
What is transported in the wet market?
Liquid cargoes like crude oil, petroleum products, and chemicals.
Name the vessel types for crude oil transport in increasing size.
Aframax, Suezmax, VLCC, ULCC.
What are the main vessel types for transporting refined oil products?
MR, LR1, LR2 (varies by voyage distance).
What index sets freight costs for oil tankers?
Worldscale Index.
What are the vessel types in the specialized market?
LNG/LPG carriers, Ro-Ro ships, heavy-lift/project cargo vessels.
What factors influence freight rates in the specialized market?
Port infrastructure, demand for niche cargo types, fleet availability.
Name three market players in freight markets.
Shipowners, Charterers, Brokers, and Operators.
What does the Baltic Exchange Capesize Index (BCI) track?
Freight rates for Capesize vessels (130,000–210,000 DWT).
What does the Baltic Exchange Supramax Index (BSI) track?
Freight rates for Supramax vessels (52,000–60,000 DWT).
How many holds does a Supramax vessel have?
Five holds.
How many holds does a Panamax vessel have?
Seven holds.
How many holds does a Capesize vessel have?
Nine holds.
What is the purpose of the Worldscale Index?
To standardize tanker freight rates for various oil routes.
Name three main types of chartering.
Voyage charter, time charter, bareboat charter.
What are the key steps in the chartering process?
Analyze cargo/vessel needs → Engage brokers → Negotiate terms → Sign Charter Party contract → Execute voyage → Settle post-voyage.
