Lakefront Futures launches Trucking Derivatives Group

Chicago-based Lakefront Futures & Options, LLC has launched a risk hedging group focused on the trucking and freight shipping sector, the firm said earlier this month.

Gary Saykaly will run the derivatives group, which will help shippers, trucking carriers, and third-party logistics firms (3PLs) manage volatility risk in trucking rates and fuel costs, the company said. Saykaly will open a Lakefront Futures branch office in Atlanta, handling the trucking and freight derivatives business for the company nationwide, he said.

The business will focus on helping participants navigate and mitigate price risk via the trucking freight forward and futures markets as well as the fuel derivative markets, Saykaly said. It comes on the heels of the launch of a freight futures market by logistics data and analytics provider FreightWaves, price reporting agency DAT, and derivatives exchange and clearing house Nodal Exchange, this past March. Lakefront's new venture will allow participants to trade trucking-related derivative contracts to hedge trucking rates and fuel costs in the futures and options market, Saykaly said.

"The trucking and freight sector is currently going through a paradigm shift with the digitization of the industry and the launching of both a trucking forward and futures market. We are now in a three-dimensional trucking market—spot, forward, and futures—and the optimal execution strategies for market participants might be engineered via a combination of solutions in all three markets," Saykaly said, adding that the FreightWaves/DAT/Nodal Exchange trucking freight futures product is one of the hedging tools the company will offer its clients. "We are focused on helping participants navigate the new market and develop engineered strategies for risk mitigation, trucking capacity procurement, and accessing load volume by a combination of solutions in all three markets."

Lakefront's trucking and freight derivatives group will host private one-on-one educational webinars with trucking carriers, shippers, and 3PLs about the applications of trucking freight futures and fuel derivatives to their company's risk exposure, the company also said.