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A day in the life of a freight trader

Tom Ravenscroft’s day starts when his three children wake him up at about 5.30-6.00am. It means Ravenscroft, Head of Panamax in COFCO International’s Freight Division, can get ahead of the market. It's all part of a day in the life of a freight trader.

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Tom Ravenscroft’s day starts when his three children wake him up at about 5.30-6.00am.

It’s a shock, but also means Ravenscroft, who is Global Head of Panamax in COFCO International’s Freight Division, can get a head start to his working day.

“Geneva hasn’t quite woken up by then and it gives me a chance to get ahead of the market by analysing some overnight reports and talking to the team in Singapore. This means I am up to speed by the time I arrive in the office,” Ravenscroft says.

Ravenscroft manages a team of five people in Turkey, Singapore and Geneva, who are responsible for trading the internal fleet of Panamax vessels and providing competitive freight quotes to COFCO International’s commodity traders and external third parties alike. In essence, they sell “space” on board a vessel and this freight, based on a dollar price per metric ton, is combined with the cost of the commodity and used to provide a competitive cost and freight (CNF) price to the customer.

It is a busy job but one that he is clearly passionate about.

“There is no typical day. Some days I spend a lot of time at my desk following the market, dealing with potential operational issues and managing the overall position of the Panamax book. Other times I’m out of the office meeting brokers, ship owners and other clients. That’s how we can strengthen current and build new relationships, and also share opinions about the freight market,” he says.


Tom Ravenscroft, Head of Panamax, COFCO International

Fingers on the market pulse

Freight forms a substantial part of the overall cost of the commodity trading process, so Ravenscroft and his colleagues follow both the physical and derivatives market very closely. They might be required to provide freight for a commodity which needs to be shipped on a spot basis or a deferred freight value, where the commodity would only be shipped a year from now.

The freight team are continually updating the rates for COFCO International’s traders to work with, from very early in the morning to well after the market has ‘closed’. Quotes can vary from corn loading in Brazil and discharging in Italy to soybeans loading in the US and discharging in Thailand with each route requiring a very different methodology when calculating the final freight rate.

When asked to provide a freight rate, the team focuses on several factors. These include studying the freight derivatives market, known as the FFA market, understanding how the physical is trading on a deferred basis and discussing views with various shipbrokers. They also consider historical freight values and the overall future macro view with the freight research team to provide the most competitive rate to the traders.

The freight team has numerous internal meetings with the commodity traders on a weekly basis to discuss potential opportunities in the market and offer a general view for the future. There are also plenty of discussions with freight operations and legal teams to address operational issues and, more recently, the challenges relating to Covid-19 – such as outbreaks on board vessels, changing port regulations and closures.

“The commodity traders and external clients alike need a constant flow of information and updated freight rates, so they can keep their fingers on the pulse of what the freight market is doing. It is our job to make sure they have it,” he says. “Freight markets have been very challenging and especially during the course of 2021 where we have encountered some extreme volatility. Managing that risk for COFCO International is a tough task but one we rise to through the use of derivative tools and specific hedging measures.”

Time to run

With such a busy schedule, Ravenscroft feels it is important to take a step back on a regular basis.

“It’s very important that the team are happy both in their professional and personal lives and actually enjoy the job and working for COFCO International. I think the fact that you’re watching something move physically from A to B, rather than just watching numbers on a screen, makes this job very satisfying,” he says. “Hitting our monthly, quarterly and annual targets is very important as is keeping our biggest customer – the commodity traders in COFCO International – satisfied. We can only achieve that if we are working to our full potential.”

For Ravenscroft, that means taking 45 minutes to an hour out a few days a week and heading out for a run.

“We work long hours in shipping so finding that time to get out in the fresh air and clear my head is very important. Running helps me to compose my thoughts and get ready for the next challenge. That time is just for me to relax and unwind,” he explains.

The working day often concludes with conversations with colleagues in Brazil or Argentina to discuss the day’s market movements and strategy ahead. But often there’s still more to come.

“The whole dynamic of freight can change very quickly and the social aspect, meeting and greeting clients and brokers alike, is what makes the whole market tick along,” Ravenscroft says. “Social and particularly face to face interaction has always been and will continue to be at the epicentre of the shipping industry. Meeting a broker for a quick beer on a Thursday night or a ship owner for lunch on a Friday is very much the norm and underlines how important personal relationships are in this sector. In fact, it’s one of the key aspects of the whole job.”


The Freight Department of COFCO International is one of the leading dry bulk operators and freight trading desks


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