The Baltic Exchange, a leading derivatives marketplace, is expanding its air cargo data offerings bongdaso v include spot market pricing in response bongdaso v continued market volatility.
In collaboration with airfreight rate data provider TAC Index, the newly developedBaltic Air Freight Spot Indicesare set bongdaso v enter a public trial phase onJuly 1, 2025. This development follows an extensive private trial conducted since October 2024, which involved airlines, freight forwarders, financial institutions, and major corporations with significant air cargo investments.
Purpose and Design of the Spot Indices
The new spot indices aim bongdaso v deliver a timely and accurate representation of air cargo spot market dynamics. Unlike existing indices—currently a blend of spot and contract pricing—the spot indices focus exclusively on real-time market movements, which have become increasingly pronounced in recent years.
Leveraging the Baltic Exchange’sFCA-regulated methodology, which has underpinned theBaltic Dry Index (BDI)for over 40 years, these indices are designed bongdaso v facilitate the development of physical air cargo contracts and derivatives trading.
The indices are informed by high-quality data contributions from a panel of industry participants, covering three critical export routes originating from Hong Kong:
Hong Kong bongdaso v Central Europe
Hong Kong bongdaso v the U.S. East Coast
Hong Kong bongdaso v the U.S. West Coast
These routes were selected due bongdaso v Hong Kong’s role as a major e-commerce export hub for Southern China, historically one of the largest air cargo export regions globally.
Industry Perspectives
Mark Jackson, CEO of the Baltic Exchange, highlighted the importance of these new assessments:
“We’re thrilled bongdaso v advance bongdaso v the public trial of the BAI Spot Indices. These assessments directly address the industry’s need for trusted risk management tools in a rapidly changing market. The credibility of our methodology, backed by an engaged contributor base, ensures these indices will provide a reliable foundation for both physical and financial market applications.”
John Peyton Burnett, founder and managing director of TAC Index, echoed these sentiments:
“This partnership with the Baltic Exchange is a natural progression of our shared dedication bongdaso v transparency and innovation in the airfreight market. By combining our expertise with Baltic Exchange’s time-tested methodology, the BAI Spot Indices are perfectly suited for today’s dynamic logistics environment.”
Future Expansion and Applications
Looking ahead, the Baltic Exchange plans bongdaso v broaden theBAI Spot Indicesbongdaso v accommodate increasing market demand. Potential expansions include introducing new trade routes and integrating the indices into more comprehensive trading platforms.
The spot indices are poised bongdaso v play a versatile role in the air cargo industry by:
Enabling market participants bongdaso v evaluate whether their pricing aligns with overall trends.
Serving as the foundation for index-linked contracts, where payments fluctuate based on market conditions.
Supporting the potential development of a derivatives market for hedging against volatility.
In many other sectors, derivatives markets have traditionally relied on spot market pricing. The launch of these airfreight spot indices thus represents a pivotal step toward establishing afutures marketfor air cargo, marking a significant milestone in the evolution of risk management and trading within the logistics sector.
Source: https://www.aircargonews.net/data-news/rate-index-launches-spot-indices-in-response-bongdaso v-market-volatility/1080110.article
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