Date: May 15 2017
Title: Air Freight Market Update Report for Week 20

Although the flow of export cargo out of Chinese gateways has eased, there remain some hot spots where space availability is tight and rates remain unchanged.  Gateways in India, Taiwan, Korea and Vietnam continue to report strong demand for space.

According to IATA, the pick-up in air freight since the middle of last year has coincided with a broader improvement in world trade conditions. Business surveys continue to indicate healthy export order books for global manufacturers. The new export orders component of the global purchasing managers’ index (PMI) remains close to a six-year high, and at current levels, is consistent with year-over-year FTK growth of around 7.5% in Q2 2017.

Following are highlights from around our Asian network.

Bangladesh: Demand for space eased last week making space bookings more accessible. In response, most carriers reduced rates 5 - 8%.

Shanghai: Market demand continues to drop following the Labor Day holiday. Airlines reduced rates to US gateways by approximately 10% and have resumed quoting spot rates.
Xiamen: There is no backlog or congestion at XMN; however, space from major transit hubs remain a bit tight and require advance booking to insure timely connections. 
Hong Kong: Unlike other air freight gateways in China, HKG is still experiencing strong demand for space and carriers have been able to maintain relatively high rates. 

Delhi: Space situation remains tight.  Rates are unchanged from last week and advance booking is required. Cargo is uplifting 2 - 3 days after booking and experiencing further delays of 2 – 3 days during onward transit to major gateways in the US, Europe & Far East.
Mumbai: Demand for cargo space is trending stronger and air carriers are anticipated to announce another round of rate increases. Advance booking is required and subject to onboard confirmation.  
Chennai: Available space continues to be tight and carriers are experiencing 3 – 4 days delays to US and European gateways. Cargo booked on Express rates is receiving uplift priority. 

Korea: ICN continues to experience strong transit cargo volumes to US gateways. In addition local demand for space from large electronics companies is building. Consequently indirect carriers such as AA and NH are requiring 3 – 4 days advance booking.  Despite the growth in demand air carriers have kept rates unchanged and are open to negotiating spot quotes on a case-by-case basis. 

Thailand: Demand for space to the US is down from last week although QF and CI are reporting tight space availability because of heavy cargo flows from China and strong passenger demand requiring the allocation of space to luggage. 

Taiwan: CI and BR are each reporting approximately 140 tons of backlogged cargo destined to US and European gateways.

Vietnam: Market demand has eased somewhat from a week ago although space is still tight and transit times are running 5 - 6 days to the US. Bookings can be reserved one week in advance.

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