Risk and Mitigation
Risk management is a key practice for every kind of business. At Global Commodity and Shipping Pty Ltd, all risks are thoroughly put into consideration for every procedure the company is involved in. It’s imperative to design the solutions to trim down the effect of risk pertaining to business as follows:
Financial & Operational Risk
We rely on advanced software solutions for chartering and operations, combined with our trusted expertise and market intelligence. This enables us to make accurate and real-time decisions. We also enter into FFAs on a limited basis, primarily as a method of hedging part of our forward freight exposure where a ship is not yet booked with a "physical" cargo contract or where a "physical" cargo contract is not yet covered by a vessel commitment.
Counterparty Risk
Global Commodity and Shipping Pty Ltd’s losses from uncollected freight and other receivables have amounted to ‘ZERO’ so far. We follow strict SOPs like the following during client selection: We only contract with large companies with a successful track record and reputation. Adopting and improving policies to assess the creditworthiness of clients to ensure their payment history.
Liquidity Risk
The company manages the risk and requirements by ensuring sufficient funds are at its disposal at all times to meet its financial commitments, including covenants. This is achieved through actively managing the company’s cash portfolio and ensuring sufficient borrowing facilities are available to meet existing and future commitments according to the policy and guidelines approved by the Management Board.
Foreign Exchange Risk
Global Commodity and Shipping Pty Ltd aims to manage or minimize the risk associated with fluctuations in foreign exchange rates through hedging its future foreign currency payments to the counterparties by entering into forward foreign exchange contracts with our relationship banks on terms that match the payment schedule of those contracts.
Incidents Related to Insurance
Arrangements are made with reputable underwriters for hull and machinery, war risk, P & I, freight demurrage and defense, bunker insurance, charterers' liability, purchaser interest, ship owner liability, cargo liability, etc., to minimize financial consequences in case of unforeseen circumstances. At Global Commodity and Shipping Pty Ltd, we believe that complete transparency and fast access to actionable information are the difference between sinking and swimming.