A shipping swap is a financial derivative that allows parties to exchange fixed shipping rates for floating rates, providing hedging tools for maritime transportation costs. These swaps enable cargo owners, shipping companies, and traders to manage freight rate volatility without chartering physical vessels or handling logistics operations.

Shipping swaps reference various route benchmarks and vessel types, helping manage basis risk between different shipping markets. These instruments support freight rate price discovery and risk management in volatile shipping markets. Understanding shipping derivatives helps assess transportation cost risks and opportunities in global trade.

Real-world example: A grain exporter enters a shipping swap to pay fixed $25 per ton freight rates while receiving floating Baltic Dry Index rates for Panamax vessels, hedging against rising shipping costs for upcoming grain exports to Asia.