Air freight: a new frontier for hedging?

Tightening fundamentals in the air cargo market are expected to drive air freight prices higher and increase volatility in the coming years. For the first time, brokers and information providers are looking to launch air cargo derivatives to manage price risk, but some end-users remain sceptical of their value.

“In the next two to five years, we expect to see the market tightening and prices rising, so having financial instruments [to manage risk] could benefit the market,” says Rogier Spoel