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Shippers can track key air freight rates with new index

A NEW air freight rate index for shippers, forwarders and financial analysts, aims to provide transparency on general cargo pricing on key city pairs.

The TAC Index is a weekly snapshot compiled on actual physical transactions for selected air cargo routes.

"Air Cargo is taking a step closer towards integrating with the global commodity markets," said TAC Index managing director Peyton Burnett.

The team behind the project, including Panalpina's former head of air freight Robert Frei said "airport-to-airport routes, initially out of the key air cargo hub Hong Kong to Los Angeles, Chicago, New York and Frankfurt, will soon be followed by more country hubs and routes."

"For shippers, there are no air freight benchmark rates out there in the market and the only way to find out price levels is to issue requests for tenders which are very expensive and cumbersome.

"For the forwarders it is interesting to know the volatility of the rates and how their internal procurement benchmarks against the entire market;. So this data is for them very valuable."

The product consists of anonymised, aggregated data which cannot be reverse engineered, London's Air Cargo News reported.

Mr Burnett of TAC Index said that the index uses algorithms to eliminate any statistical anomalies, such as minimum and express shipments, to give a "truer representation of the market".

Although there has been no marketing of the index so far, industry word of mouth has seen a number of shippers in the high tech, garments and perishables air freight sectors express an interest.

Later, the index may allow banks and investor analysts to have a better feel for the air cargo industry, while also providing the opportunity for the hedging of air freight rates, similar to those risk management instruments used for sea freight and fuel.