Mads Frank Markussen
Head of Freight Research and FFA
CM Navigator

As market conditions become more complex, firms that embrace digitalisation and advanced analytics will be best positioned to succeed. The future of grain and freight trading will be defined by the ability to process vast amounts of data quickly and accurately. CM Navigator is leading this transition, ensuring that traders have the tools they need to operate efficiently in an increasingly competitive marketplace.

Copenhagen Merchants is modernising its global grain brokerage through CM Navigator, making their in-house digital tools, financialisation strategies, and market intelligence available to their customers. By working closely with its shipowning arm, Navi Merchants, the company has developed a system that calculates Cost and Freight (CFR) prices for global markets. 

Commodity and freight markets function under derived demand, where freight rates fluctuate based on supply and demand for agricultural commodities. “The Law of One Price” suggests that, excluding transaction costs, grain prices should equalise across locations when adjusted for freight and quality differences. However, factors such as vessel availability, fuel prices, geopolitical risks, and shifting trade policies introduce inefficiencies. The ongoing Red Sea shipping disruptions highlight how regional instability can create volatility in freight pricing. CM Navigator incorporates these variables, offering real-time freight assessments that improve price discovery.  

THREE FORCES RESHAPING FREIGHT AND COMMODITY MARKETS  

Digitalisation is accelerating data-driven decision-making in grain and freight trading. Traditional grain brokerage relied on manual market discovery, requiring traders to aggregate information from shipowners, brokers, and market reports. This fragmented process led to inefficiencies and inconsistent price-setting. CM Navigator replaces this approach with automation, integrating trade flow analysis, freight derivatives modelling, and real-time cost assessments. By processing 250,000 calculations every 15 minutes, it enables commodity traders to evaluate multiple freight scenarios instantly, improving transparency and efficiency.  

Digital tools are not only improving how freight is priced but also changing how traders think about market efficiency. Freight markets have historically been opaque, with pricing knowledge concentrated among a handful of large brokers and shipowners. CM Navigator, by making pricing more transparent and immediate, reduces the reliance on traditional intermediaries. This shift is particularly valuable for firms that do not have large in-house freight teams, allowing them to access the same level of pricing intelligence as major trading houses.  

Financialisation has made freight a tradable asset rather than just a transportation service. The increasing use of freight derivatives (FFAs) and algorithmic price-setting has transformed the market, requiring more sophisticated tools to manage risk. Unlike traditional spot-market pricing, CM Navigator incorporates forward curves, bunker price trends, and historical premiums to provide predictive pricing models. Through direct access to market-clearing rates from its own shipping division, Copenhagen Merchants ensures that CFR pricing reflects actual executed transactions rather than indicative broker estimates. This approach allows traders to make informed freight decisions with reduced exposure to price volatility.  

The financialisation of freight markets also presents challenges. Freight rates, much like commodity prices, are now influenced by speculative capital, which can create price distortions. The rise of hedge funds trading FFAs means that short-term price movements may not always reflect physical supply and demand dynamics. CM Navigator helps mitigate this uncertainty by incorporating both physical and financial market data, ensuring that its price models remain grounded in real shipping economics.  

Capitalism has led to a concentration of market power, where scale, data access, and vertical integration determine competitive advantage. Larger players reduce costs through economies of scale, while smaller traders struggle with limited access to freight intelligence. As capital consolidates in fewer hands, those without extensive in-house resources must rely on data-driven solutions to remain competitive. CM Navigator provides this access, ensuring that both large and small firms can engage in the market on more equal footing.  

The consolidation of market power is particularly evident in the shipping industry. A handful of large shipowners and freight operators now control a significant share of global tonnage, making it harder for small and mid-sized traders to negotiate competitive freight rates. In this environment, the ability to accurately price freight costs in real-time is no longer just an advantage, it is a necessity. CM Navigator functions as an equalising force, giving market participants access to data that allows them to make informed trading decisions without relying on dominant freight providers.  

A MARKET-EFFICIENT FREIGHT MODEL  

CM Navigator bridges gaps in price discovery by offering automated routing and cost optimisation. The model continuously adjusts for vessel positioning, fuel price fluctuations, and routing constraints, ensuring that traders receive accurate freight cost assessments in real time. This ability to process and interpret complex variables is particularly valuable in volatile markets, where freight costs can shift rapidly due to geopolitical events or supply chain disruptions.  

A key advantage of CM Navigator is Copenhagen Merchants’ direct access to real shipping data. Many third-party freight data providers rely on estimated rates, whereas CM Navigator uses actual market-clearing rates, ensuring its CFR calculations reflect real-time shipping costs. This eliminates reliance on external freight brokers, giving traders more control over procurement decisions and improving overall cost efficiency.  

Another strength of CM Navigator is its ability to integrate with broader market intelligence tools. Commodity traders do not operate in isolation, freight costs are just one component of their decision-making process. By combining freight pricing with trade flow data and physical commodity price assessments, CM Navigator allows traders to evaluate total supply chain costs in a single platform. This level of integration is increasingly necessary in today’s interconnected global markets.  

IMPLICATIONS FOR GRAIN MARKETS  

By improving price transparency and reducing information asymmetry, CM Navigator enhances market efficiency for both grain exporters and importers. Large trading firms can integrate CM Navigator’s insights into broader supply chain strategies, while smaller players gain access to freight cost intelligence that was previously unavailable to them.  

For importers, the ability to track freight costs in real time improves procurement planning, allowing for better timing of purchases and more effective risk management. For exporters, understanding freight trends ensures that they can remain competitive in destination markets by adjusting their pricing strategies accordingly. This ability to respond dynamically to market conditions is crucial in an era of increased price volatility.  

As freight markets move towards algorithmic trading, tools like CM Navigator are no longer optional but essential. The industry is shifting towards faster, automated, and more precise price discovery, and companies that fail to adopt these technologies risk being left behind.  

The increasing importance of carbon pricing and sustainability in freight markets further underscores the need for data-driven decision-making. As regulatory frameworks evolve to include carbon emissions in freight costs, traders will need tools that can model these additional costs accurately. CM Navigator is already integrating carbon price data, allowing users to assess the full environmental and economic impact of their freight decisions.  

A DATA-DRIVEN FUTURE FOR GRAIN AND FREIGHT TRADING  

CM Navigator reflects broader shifts in the industry, driven by digitalisation, financialisation, and market consolidation. As freight and commodity markets become increasingly interconnected, leveraging data-driven decision-making is now a requirement for firms looking to remain competitive.  

The role of technology in commodity trading will continue to expand, making advanced modelling, algorithmic pricing, and seamless market integration crucial to success. Copenhagen Merchants, through CM Navigator, is positioning itself at the forefront of this transformation, ensuring that grain traders, freight buyers, and commodity firms are equipped to navigate the complexities of modern global trade.  

As market conditions become more complex, firms that embrace digitalisation and advanced analytics will be best positioned to succeed. The future of grain and freight trading will be defined by the ability to process vast amounts of data quickly and accurately. CM Navigator is leading this transition, ensuring that traders have the tools they need to operate efficiently in an increasingly competitive marketplace.