The Baltic Exchange has today (16 November) launched weekly air freight indices. It has partnered with established Hong Kong based air cargo pricing publisher TAC Index and the new indices include six outbound indices and 13 individual destination baskets. These products will be branded as the Baltic Air Freight Index (BAI) – powered by TAC data. They will come under the governance of Baltic Exchange Information Services Limited (BEISL), with TAC Index acting as the Calculating Agent.
Priced in US$/kg, the indices reflect transacted rates from key hubs: London, Frankfurt, Hong Kong, Chicago, Shanghai and Singapore to the main import regions globally.
Rates are provided to the Calculating Agent by leading international freight forwarders and published each Monday by the Baltic Exchange. The indices are available on www.balticexchange.com to subscribers to the BAI data – however, a headline BAI index is available to any current subscriber to the Baltic Exchange indices. A separate Air Freight Guide will be published.
The Baltic Exchange already provides benchmark assessments for the maritime markets which are used to settle billions of dollars-worth of derivatives and physical trades every year. The move follows a rigorous review of the TAC Index’s methodology to ensure that it is compliant with the principles set out by the International Organization of Securities Commissions (IOSCO).
“We’re delighted to be adding air freight assessments to our growing list of assessments, enabling freight risk management through trusted benchmarks,” said Baltic Exchange Chief Executive Mark Jackson.
“The Baltic Air Freight Index provides an independent, uncompromised view of the air freight market and our oversight will help ensure that the Index can become listed by financial clearing houses. This would provide the air cargo industry with new ways of managing its freight rate risk and potentially bring in new market participants.”
Originally launched in 2016, the TAC Index is widely referenced in the air cargo market and has established itself as a trusted and independent source for market freight rates.
The global air freight market is estimated to be worth US$100bn, with 65 million tonnes of general cargo moved by air annually. It is estimated that less than one percent of world trade by tonnage is carried by air, but because of the high value of these goods, they represent about 35 percent of the value of goods shipped globally.
BAI powered by TAC data (Baltic Air Freight Index)
BAI-FRA00 Frankfurt Outbound Index
BAI-HKG00 Hong Kong Outbound Index
BAI-LHR00 Heathrow Outbound Index
BAI-ORD00 O’Hare Int’l, Chicago Outbound Index
BAI-PVG00 Shanghai Pudong Outboard Index
BAI-SIN00 Singapore Outbound Index
BAI-FRA02 Frankfurt to North America
BAI-FRA03 Frankfurt to South East Asia
BAI-FRA04 Frankfurt to USA
BAI-FRA05 Frankfurt to China
BAI-HKG01 Hong Kong to Europe
BAI-HKG02 Hong Kong to North America
BAI-HKG03 Hong Kong to South East Asia
BAI-HKG04 Hong Kong to USA
BAI-LHR02 London Heathrow to North America
BAI-LHR03 London Heathrow to South East Asia
BAI-LHR04 London Heathrow to USA
BAI-ORD01 O’Hare Int’l, Chicago to Europe
BAI-ORD03 O’Hare Int’l, Chicago to South East Asia
BAI-PVG01 Shanghai Pudong to Europe
BAI-PVG02 Shanghai Pudong to North America
BAI-PVG04 Shanghai Pudong to USA
BAI-SIN03 Singapore to South East Asia