As physical freight prices soar due to longer ton miles and an aging fleet, the trading of freight derivatives has become essential to manage freight volatility and costs. This shift has created a high demand for skilled freight derivatives traders and analysts, leading to a talent shortage in the industry. HC Group reports a strong need for freight analytics talent, driven by the influx of hedge funds and banks into the market.
Companies are now seeking innovative hiring solutions to bridge the talent gap and capitalize on this growing sector, presenting new career opportunities and promotional paths for professionals in freight trading and analytics.
Financial risk and opportunity
North American oil output has reshaped traditional voyage flows against the backdrop of elevated geopolitical tensions. This heightened financial risk and opportunity means today’s freight traders are spending more time identifying value from disrupted markets.
As longer ton miles and an aging fleet have driven up physical freight prices, trading freight derivatives has become a necessary tool to mitigate freight volatility and manage physical freight costs.
These factors have created a new need – and talent shortage – of accomplished freight derivatives traders and analysts who can read and help navigate these changing trends and capitalize on its opportunities.
Talent in demand
HC Group is seeing strong demand for freight analytics talent, with companies hiring both externally and moving people internally to satisfy this need. The arrival of more hedge funds and banks into the freight derivatives space, attracted by high volatility and increased liquidity, has intensified competition for both fundamentals-focused discretionary traders and quantitative analysts.
As a result of rising demand, professionals in freight derivatives trading and analytics now have an ever-widening promotional ladder. Traditional routes to freight trading can now diverge to roles including freight analytics manager and forward freight agreement (FFA) traders.
Challenges for organisations
The surging in demand for freight analytics and FFA trader roles has resulted in a talent gap that many organisations are struggling to fill. In-house staff often lack the existing training needed to quickly make the transition from various adjacent functions. Additionally, as more companies enter the space there is growing uncertainty around salary benchmarks for these roles. We are seeing this trend across regions and for base and bonus remunerations structures.
Solutions for hiring managers
Solutions that can increase talent options amid these competitive markets include widening traditional hiring pools. This can include considering freight analysts from brokerages and service providers as well as FFA brokers making the step up to trading, or physical freight traders moving into freight derivative activities.
To take one example, commercial analysts who already look at ship tracking and fleet movements can be well placed to develop coding skills and amalgamate data sets. This can make it easier for them to make the jump to freight analyst roles, and potentially FFA trading. Other prime talent sources include traditional trade houses and owner operators, who often have best-in-class physical trading talent with a strong grasp of fundamentals.
Taking this broader approach to recruitment can have the added benefit of providing greater opportunities to a younger cohort of promising analysts and FFA traders, helping to strengthen the talent pipeline of companies for the future.