TAC Index for air cargo gets lift off

The new freight index, which has been under development since 2014, was initially modeled after the Shanghai Containerized Freight Index but with an exclusive focus on air cargo.    A new freight index that specializes in air cargo, referred to as the TAC Index, officially launched today.
   The TAC Index has an initial focus on the trade lanes between Hong Kong and the U.S. airports at Los Angeles, Chicago and JFK International in New York; as well as between Hong Kong and Frankfurt, Germany.
   The index, which is the brainchild of John Peyton Burnett, has been under development since early 2014. It was initially modeled after the Shanghai Containerized Freight Index but with an exclusive focus on air cargo.
   According to TAC Index executives, the top 20 forwarders control nearly 50 percent of the global air cargo market. The index primarily targets data from these forwarders, but the company invites other forwarders to join. “So far a handful of forwarders are supplying regular data,” the company said.
   The next phase will be to open the index to more country hubs and increase the number of forwarders delivering data so that weekly tonnage can be published along with the U.S. dollar-cost-per-kilo aggregated rate.
   Burnett said the subscriber-based index is aimed “primarily at shippers, but we will also target the financial services for structured products and exchanges.”
   “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,” said Robert Frei, former head of air freight at Panalpina and a member of the TAC Index development team. “The tenders provide only a look at the rate at any specific time and then you try to lock it in with the other party for three, six or 12 months, but it is still artificial. Our index provides weekly information.”
   “For the forwarders it is interesting for them 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,” Frei added.