What Is a Forward Freight Agreement?
A forward freight agreement is a commodity forward agreement.
Forward Freight Agreement
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A forward freight agreement is a commodity forward agreement.
FFA is the abbreviation of "Forward Freight Agreements", and the forward freight agreement is based on the freight index issued by the Baltic Exchange (hereinafter referred to as the BSE). The agreement stipulates specific routes, prices, quantities and other factors, and the two parties agree to settle the cash balance at a specific future point in time based on the spot freight index issued by the BoCom. In essence, FFA is a freight risk management tool with hedging (avoiding risk) and price discovery functions.
- Name
- Forward Freight Agreement
- Name
- FFA (Forward Freight Agreements)
The forward freight agreement is a commodity forward agreement that plays an important hedging role in the maritime market.
