Date: Nov 07 2016
Title: Air Freight Market Update Report for Week 45


Strong demand for space out of Greater China and Southeast Asian origins is carrying forward into this week enabling air carriers to continue to impose rate increases. Air freight shipments moving via transit hubs located in these countries can expect to be impacted by higher rates and slower transit times. We continue to recommend booking air freight space three - to - four days in advance.

Following are highlights from around our Asian network.

China

Shanghai: Cargo remains backlogged at 1 – 2 flights and all freighter space is fully booked this week. Heavy volumes of electronic products are consuming a large proportion of available space.  Rates to the US East and West Coasts are up around 8%. Rates to European and Asian gateways are holding firm. Carriers will reevaluate rate levels on Monday based on advance bookings for the following week.
Xiamen: Limited available ocean capacity caused in part by the Hanjin bankruptcy is driving the conversion to air freight. In addition, electronics manufacturer AU Optronics is moving approximately 300 tons of air freight per week.  Most airlines are fully booked for the first Trans Pacific leg, and the second leg is fully booked through November 10th. Airlines require 4 - 5 days advance booking.  Airfreight rates have increased another 8 - 13% to US and European gateways. 
Hong Kong: Available air freight space remains very tight because of large volumes of mobile phone shipments by Apple, Samsung and LG; ongoing conversion of sea freight moving on Hanjin vessels to air; and a reduction in the number of charter flights in November associated with the implementation by the Civil Aviation Department of its new air traffic control system. Air freight rates are already up 40% above slack season levels and carriers are signaling another round of increases around the middle of the month.

Korea: Backlogs of cargo destined to the US persist.  Heavy volumes of transit cargo from China and Southeast Asia are adding to strong demand for space from Korean shippers.  UA / OZ / KE have announced another round of rate increase. Adding to base air freight rate increases, carriers have announced they will impose an FSC increase of $0.30/kg on November 15th.

Taiwan: As of Friday, November 4th, TPE is reporting approximately 120 tons of cargo backlogged to US and European gateways. BR and CI have announced 10% to 15% rate increases to US and European gateways effective November 8th.

Thailand: Demand for space to US gateways remains strong. Space is tight and some airlines such as CI and OZ are only accepting cargo booked on Express rates. Air carriers require advance booking and are not quoting spot rates

Vietnam: Strong demand has enabled airlines to impose another round of rate increases in the range of 5% to 10% to US and European gateways.

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