Recent approaches and opinions support that shipping companies must take precautionary measures against financial risks and design steadier steps for financial management. The key to developing, implementing, and managing a successful hedging strategy is to use effective forecasting systems and appropriate financial derivative products. The key objective of this study is to control risks from bunker cost fluctuations using financial derivative products. To do so, a time-series analysis is conducted using a dataset derived from a bunker index system. The artificial neural network method is used for time-series analysis with a mean absolute percentage error of 0.9182105. Next, progress predictions of bunker costs and hedging strategies are determined to use financial derivative products against their risks. Finally, this study concludes that forward agreements can serve as the perfect protection mechanism against bunker risks in tramp shipping.

Abstract
1. Introduction
2. Background
3. Dataset and Model
    3.1. Dataset
    3.2. Artificial Neural Network
4. Findings and Estimation Results
5. Conclusion
Reference

• Sercan EROL(Dept. of Maritime Transportation and Management, Karadeniz Technical University)