Air Freight Forward Agreement
„The August contract resulted in trade in baskets between China and Hong Kong and Europe at USD 2.50/kg against the TAC index, with the 10 largest carriers and commodity funds traded bilaterally,“ said Freight Investor Services. Due to a significant shift in air freight, road hauliers will be able to control their exposure to the volatile market and obtain better prices from derivatives trading. FIS advises clients in bulk goods, tankers and air cargo, steel, iron ore and fertilizer products, as well as physical services for goods and broking services. Freight Investor Services (FIS) launched a market for air cargo operators (AFFA) last month and several industry players used futures contracts to protect their exposures in advance from price fluctuations by using the TAC index as a basis. As noted above, the courier is involved in various aspects of the transportation process, through the transportation council and organization and the carrier that transports the goods, by supporting customs and regulatory requirements, and by planning the storage of goods. If you are a forwarder or are considering hiring a forwarder, a transit agreement defines the terms of the agreement, including the services the courier will provide, payment plans and what happens if something goes wrong in the import/export process. FFAs provide owners, charterers and traders with a way to protect themselves from the inherent volatility of the freight market. … More for a client, the definition of the services to be provided ensures that all the steps of the order are completed. For a carrier, a service clause is to manage expectations with the customer and make sure they know what they are paying to avoid disputes that arise on the line. Because the services provided by a carrier may vary, it is important to define precisely which services are provided. FIS has partnered with the Air Freight Index (TAC Index) to enable airlines, road hauliers and end-users to make flexible prices for air freight contracts and secure their commitment through forward financial contracts.
The integration of a carrier is not absolutely necessary for the transport of goods from one destination to another. However, because the import and export process is highly regulated and can be complex, many companies choose to use a forwarder to cope with the stress of transporting goods to the nearest destination. Fertilizer futures offer a risk management tool that can be negotiated independently or in combination with freight and other raw materials.