Baltic Exchange, in partnership with TAC Innovation, has expanded its suite of air freight spot indices to include three new routes originating out of Shanghai.

Shanghai has become the fourth global origin centre for the Baltic Air Freight Spot Indices (BAI Spot), with pricing now available for routes to Central Europe, the US West Coast and the US Mid-West.

These latest routes complement the current set of BAI Spot routes originating from Hong Kong, India and Korea. Plans are also underway to launch more routes, with origins ranging from Hanoi and Frankfurt, as well as North and South America within the next 12 months.

The launch of the new BAI Spot routes out of Shanghai comes as Baltic Exchange and TAC respond to market demand for more origins in key Asian export hubs, with air freight rate volatility increasing amid geopolitical disruption in the Middle East, heightened jet fuel costs, reduced belly-hold capacity and increased demand for time-sensitive goods.

The development is also designed to capture the growing trade in high-value electronics and semiconductors, as well as pharmaceuticals and e-commerce goods, from China to the United States.

BAI Spot is increasingly being recognised by airlines, freight forwarders and multinational shippers as the foundation for next-generation air freight risk management instruments. They are already being used to assess rate movements and benchmark contract negotiations, as well as forming the basis for hedging discussions and strategies.

With the increased and sudden volatility experienced by the air freight market in recent months, these hedging discussions are developing rapidly into demand for real and usable tools to manage price risk for air cargo. BAI Spot rates have increased by as much as 80% in the last two months, and hedging instruments are essential to navigate these price movements.

Mark Jackson, CEO of Baltic Exchange, said, “Baltic Exchange and TAC Innovation continue to closely collaborate to build a transparent and data-driven framework for the global air cargo market during a time of global volatility in air freight rates. With our proven track record of 40 years of developing risk management tools for ocean freight, we believe we are the right partner for the air cargo industry as hedging becomes more urgent and critical.”

John Peyton Burnett, Founder and Managing Director of TAC Innovation, said, “The extension of BAI Spot to include routes out of Shanghai will provide much-needed transparency to an air cargo market that is increasingly relies on data for developing routes out of key markets. The new BAI Spot routes ensure that market participants can navigate the current volatility with greater confidence and use these solutions to solve critical pain points.”

Built on Baltic Exchange’s 40-plus years of ocean freight benchmarking expertise and developed with input from leading airlines and freight forwarders, BAI Spot provides a daily, independent assessment of spot air cargo rates. The indices are designed for settling index-linked physical contracts (ILAs), price benchmarking, and risk management solutions (such as futures and derivatives), offering stakeholders a credible and consistent measure of market performance.