News / Forwarders mitigate air cargo volatility with air freight forward agreement

© Engdao Wichitpunya

In what could be a significant shift in air freight, forwarders will be able to manage their exposure to the volatile market, and get better prices, from derivatives trading.  

Freight Investor Services (FIS) launched an Air Freight Forward Agreement (AFFA) market last month, and has seen several industry players use futures to hedge their forward exposure to price movements, using the TAC Index as the base. 

“The August contract has seen the China & Hong Kong to Europe basket trade at $2.50/kg against the TAC ...