The flock of black swans has landed – and the risk management models that shipping built its strategies around are no longer fit for purpose. That was the consensus from Geneva Dry’s Risk Management in Dry Bulk panel last week, which brought together shipowners, operators, energy traders and market clearers for one of the conference’s most candid sessions. Moderator Jason Martinet of Triton Bulk opened with a show of hands, revealing that roughly a third of the room was sitting on live freight exposure – time charters, cargo books, ship equity or bunker positions. He then rattled off the crises that have reshaped risk thinking since 2008: Brumadinho, covid, Panama Canal drought restrictions, Houthi attacks on Suez traffic, USTR measures, and now the closure of the Strait of Hormuz. “What used to be black swans are really now a flock of swans,” he said. “A pattern that happens quite often.” Torbjørn Gjervik, CEO of Western Bulk, was direct about how his company has responded. “We have to make a choice – do we want to stay in a market? Do we want to stay in a trade? Or do we opt not to participate?” Western Bulk has deliberately reduced its operated fleet from around 140-150 vessels to 110-115. “The volume is down, but I would say the margin per trade is up. More cautious, a bit more selective, basically trying to find where we think the risk-reward is good enough to participate.” Vincenzo Romeo, CEO of Nova Marine Carriers, described how the company had built a natural hedge by evolving from pure shipowning into operating. “The more it grows our operating arm, the more ships we can buy as owners,” he said. With a vessel currently stuck on the wrong side of Hormuz, Romeo credited the company’s diversification across vessel sizes – from 4,500 dwt coasters to kamsarmaxes – with providing resilience. Costas Delaportas, CEO of Drydel Shipping, offered a similar account, describing a vessel trapped in the Persian Gulf for two months. Beyond crew welfare – which he described as a daily priority – Delaportas said Drydel had given its charterer the flexibility to use the stranded vessel as floating storage. “We gave them this flexibility, which is very important during these difficult times.” He also made an unsolicited call for the IMO to mandate slow steaming across the global fleet given the bunker shortage. “Imagine how much fuel we can save if all owners in this world go slow steaming during this difficult period.” Gus Majed, group CEO of Paratus, brought the energy trading perspective and delivered some of the session’s surprising analysis. His firm calculates that by year-end, global oil stocks will have drawn down by approximately 1.2bn barrels, with the physical procurement crunch only beginning to bite in the next two months. “It is not so much what is the price – it is the availability,” he warned. On risk models, Majed was unsparing. “Not only do they no longer work – they are completely and fundamentally obsolete.” The old assumption of log-normal distributions and mean reversion has been overtaken by a world of fat tails and correlated extremes. “All these risks are no longer independent. They are cross-correlated and there’s a sequence between them – a knock-on effect.” When asked whether traders are simply too poorly capitalised to hold positions long enough to be proved right, Majed was unequivocal. “100%. Up to the point where you are a fundamental expert and you know your market. The very best traders in the world got it comple