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Not hedging is the risky behavior”: trucking freight futures at Transparency19

May 08, 2019 at 07:45 AM CST
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On Monday afternoon at Transparency19, Addison Armstrong, executive director of trucking freight futures at FreightWaves, moderated a conversation between Nodal Exchange, where freight futures are traded, DAT, whose rate indexes the futures contracts are settled against, and K-Ratio, a commodities trading advisor based in Chicago advising carriers and shippers on hedging strategies.

Danny Gomez, senior director of energy markets at Nodal Exchange, Don Thornton, senior vice president at DAT Solutions, and Pat Draut, principal at K-Ratio, participated in the discussion, which focused on hedging strategies and broadening access to the futures market.

Trucking freight futures contracts began trading on the Nodal Exchange in March. These futures contracts are designed to help shippers, carriers, and 3PLs hedge against spot market volatility. Market participants can buy or sell contracts representing 1,000 miles on seven individual lanes, three regional baskets, and a national average. As Gomez said, Nodal Exchange is the buyer to every seller and the seller to every buyer, vetting market participants and eliminating counter-party risk.