OTC Freight

In September 2005 LCH.Clearnet Ltd with the support of the Freight Broking community launched a clearing service for the registration of OTC Freight Forward Agreements (FFA’s).

The service currently covers the most actively traded routes- nine dry and six wet routes. LCH.Clearnet is in close touch with developments in the market, ready to adapt existing contracts or add further contracts as necessary, in order to remain the Clearing House of choice for this growing market.

There are currently fifteen Clearing Members signed up to the OTC Freight clearing service, offering third party clearing services to the growing marketplace, which includes globally based chartering companies, ship owners and trading companies.

A number of Freight Brokers, all members of the FFABA (Forward Freight Agreement Brokers Association) are also active on the service. All these Brokers have open and equal access to the service, registering their OTC brokered trades with LCH.Clearnet for clearing.

Cleared FFA volumes saw steady growth in 2006, with a notional value of $1.5 billion. Volumes continue to flourish in 2007, with open interest growing month by month.