Shipping’s next generation of risk management tools could allow owners and charterers to hedge directly against specific events rather than relying solely on traditional freight derivatives, according to Mark Jackson, chief executive of Baltic Exchange.

Jackson, who will join the dry bulk markets panel at the September Splash Singapore conference, said outcome markets could emerge alongside freight forward agreements and options as companies look for protection against a wider range of volatility. In a market where freight can be shaped by fleet movements, geopolitical shocks, weather disruptions and rapidly changing trade patterns, that broader toolkit could matter for day-to-day commercial planning as much as for risk transfer.

“Traditional instruments like FFAs and options will become more important than ever, but we may also see the emergence of new tools such as outcome markets where one can hedge against a fundamental event or factor directly,” Jackson said.

He added that such markets could also provide useful information for commercial decision-making by generating data that helps owners and charterers assess changing risks more accurately.

The need for better risk tools is becoming more urgent as freight markets are affected by fleet movements, geopolitical shocks, weather disruptions and rapidly changing trade patterns.

Jackson said volatility is likely to remain central to the dry bulk discussion in Singapore, despite a strong start to the year. Spot rates have traded near multiyear highs, supported by robust capesize demand and freight sentiment that has remained more resilient than expected amid difficult macroeconomic and geopolitical conditions.

The Baltic Dry Index has reflected that strength, reaching levels not seen since mid-2022. The index marked its 40th anniversary in October last year.

Jackson nevertheless cautioned against assuming the market’s recent momentum will continue without interruption.

“Volatility will continue to have an impact on the dry bulk freight market and on tonne-mile demand,” he said. “In times of uncertainty, transparent and independent market benchmarks become even more important.”

Technology will be another major theme throughout the day’s conference at the Fairmont Hotel, and Jackson said the Baltic Exchange has a clear view on the issue.

“Trusted data, transparent methodologies and independent market benchmarks will become increasingly important as companies seek to make informed commercial and regulatory decisions,” Jackson said.

For Jackson, Splash Singapore also provides an opportunity to connect different parts of the industry and test ideas against the experience of market participants.

“I am certain that this year’s event will bring together a rich tapestry of industry experts from across the dry bulk and wider shipping community, enabling us all to connect and exchange ideas in a forward-thinking manner,” he said.