FORWARD FREIGHT AGREEMENT
\fˈɔːwəd fɹˈe͡ɪt ɐɡɹˈiːmənt], \fˈɔːwəd fɹˈeɪt ɐɡɹˈiːmənt], \f_ˈɔː_w_ə_d f_ɹ_ˈeɪ_t ɐ_ɡ_ɹ_ˈiː_m_ə_n_t]\
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It is a principal-to-principal contract for betting on the price of a particular freight-route on a particular date. Shippers and ship owners use it as a hedge against a volatile ocean freight market. Based on Baltic exchange option contracts on freight rates.
By Henry Campbell Black
