The history of BACA’s parent organisation – The Baltic Exchange – spans more than 250 years and traces its origins back to a humble coffee house (the traditional meeting place of merchants and sea captains) in the City of London. As sailing ships arrived in the Port of London, captains needed to get a good price for their incoming cargo, and seek a new load for their next outbound trip. The coffee houses were the favoured places for making these transactions, in the same way that Mr Lloyd’s coffee house was where London’s insurance market started.
In 1744 the Virginia and Maryland coffee house in Londons Threadneedle Street changed its name to Virginia and Baltick. This reflected the regions where the merchants and shipowners who regularly gathered there conducted their business.
By the early 1800s it was found necessary to lay down some rules and regulate what had become a rather unruly market, so a committee of senior coffee house regulars was formed. Procedures were established to regulate membership, and the formal Baltic trading processes were born.
The Baltic Company Limited was created in Threadneedle Street in 1857, but when the London Shipping Exchange was amalgamated in 1900 the combined organisation was formally retitled the Baltic Mercantile & Shipping Exchange. Soon afterwards the Exchange moved into new premises in nearby St Mary Axe, with its own administrative offices, a large trading floor, and a banqueting hall.
Air charters started to take place from 1929 and by the mid 1940s it was considered necessary to form an aviation division of the Baltic Exchange to regulate this activity. Initially known as the Air Freight Advisory Committee, this group became the Airbrokers Association in March 1949, and the Baltic Exchange was then able to add the accolade of being the world’s first air freight exchange to its long list of achievements.
The aim of the Airbrokers Association was to bring to aircraft chartering the same standards of integrity and professionalism for which the Baltic Exchange had long been known and respected. In 1976 membership was opened to include airlines and other non-members of the Exchange who could show that they operated their aviation businesses to the same high standards set by the original association. The name then changed to its present title of the Baltic Air Charter Association.
Later advances in communications resulted in a decline in air charter business actually taking place on the trading floor of the Exchange, but members continued to use the facilities offered for social functions and private meetings.
On 10 April 1992 an IRA terrorist bomb exploded in a van parked outside the Baltic Exchange building in St Mary Axe, completely destroying it and killing three people, including one Baltic Exchange staff member. The building was rendered unusable, and it was considered unrealistic to rebuild it according to the historic detail requirements imposed by English Heritage.
The maritime activities moved immediately to the premises of Lloyd’s of London, and the Baltic Air Charter Association was forced to conduct its activities at various other locations, including Trafalgar House near the Tower of London.
It was decided that the site of the old building would pass to a developer, and the Swiss Re Tower (widely known as the Gherkin) now stands on that site. Meanwhile the Baltic Exchange acquired the smaller building next door at 38 St Mary Axe in 1995, and this is now the home of the Exchange, and the Baltic Air Charter Association.
Membership of the Association grows year by year, and has nearly doubled in the last decade, reflecting the value that members draw from the benefits offered. These include the provision of support, advisory and consultation facilities when difficulties arise during the course of normal trading, and two splendid and very well-attended luncheons each year at prestigious historical venues in the City of London, which members use for networking and entertaining clients.
The Association also holds regular training seminars at the Baltic Exchange, which are becoming increasingly popular and valued. BACA also recommends an escrow service run by Shelby Financial Corporation, a company specializing in Escrow services, to provide a secure deposit for funds being paid in advance to operators. This facility enables clients monies to be held securely in cases where there is an extended period between the requirement to make a deposit to hold a booking slot, and the actual date of the flight. This period incurs an element of risk should the air charter operator run into difficulties after the deposit has been made, and the Shelby Escrow service, recommended by BACA, helps to remove this risk.
BACA continues to uphold high standards of trading ethics and honourable business practices, and does its best to ensure that members abide by the BACA Code of Conduct. Membership of the Association provides credibility and reassurance to the charter-buying client, and it is in order to maintain this high standard that BACA has adopted the same motto as its parent organisation, the Baltic Exchange My Word My Bond.
The Baltic Exchange gives BACA very generous support with administrative and social resources to BACA members, and the council recommends that members take full advantage of the benefits available. Located in the heart of the City of London, the Exchange gives members a central base where they can hold meetings, hire secretarial services, use the bar and restaurant, review their emails etc. Details are available at The Baltic Exchange’s own website.