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16th November 2020

Baltic Exchange launches air freight indices

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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 17 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 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.

Headline Index
BAI powered by TAC data Baltic Air Freight Index

Outbound Indices
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

Destination Baskets
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

For further details please contact Bill Lines.
T: +44 (0)20 3326 8460

About the Baltic Exchange
The Baltic Exchange represents a global community of shipping interests. These include shipowners, charterers and shipbrokers who are collectively responsible for handling a large proportion of the world’s dry cargo and tanker fixtures, freight derivative trades as well as the sale and purchase of merchant vessels.
EU authorised benchmark administrator The Baltic Exchange is regulated by the UK’s Financial Conduct Authority (FCA) pursuant to the EU Benchmark Regulation. It is the trusted provider of data for the settlement of physical and derivative freight contracts, underpinning risk management tools for the shipping and transportation markets.
Founded in 1744, the Baltic Exchange is headquartered in London with regional offices in Singapore, Shanghai, Athens, Stamford and Houston.
In 2016 the Baltic Exchange was acquired by Singapore Exchange ("SGX").

Baltic Exchange services:
• Daily benchmarks for dry, wet, container and gas freight markets
• OPEX, S&P, ship recycling & forward assessments
• Air cargo assessments
• Escrow and dispute resolution support
• Executive training via the Baltic Academy
• Networking for shipping professionals

About TAC Index

The TAC Indices are the premier providers of accurate, timely, and independent reference price information for Air Cargo around the world. Focused on the major trade lanes and based on actual transaction data, we are a neutral and impartial organisation in accordance to antitrust requirements.

TAC specializes in the compilation of industry reference price data for clearly specified products, using rigorous, transparent processes and secure web-based technology. Our objective is to compile and publish reference prices (“Indices”) that are highly representative of physical market transaction prices for selected products. The Indices are based on price data submitted only by forwarding companies active in the relevant product markets. The approach is data driven and based on statistical analysis of pricing data.

TAC has no financial interest in the prices of the products for which it compiles Indices. All data providers are anonymous and actual transaction data remains completely confidential.

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