Date: Dec 12 2016
Title: Air Freight Market Update Report for Week 50

Peak season demand for air freight to US gateways has eased although demand remains strong to European gateways.  Market demand should be in a temporary lull through the year end holidays before picking up around the middle of January prior to the Chinese New Year holidays (January 27th - February 2nd).

Following are highlights from around our Asian network.

Guangzhou and Shenzhen: Demand for space to the US has eased this week along with air freight rates. Space for cargo destined to European gateways remains tight and requires 3 - 4 days advance booking.

Shanghai: There is adequate space to meet demand to US gateways although OZ is fully booked to LAX and ORD through Tuesday. Space to European gateways is tight and rates remain at higher peak season levels.  EY reports that space to the Middle East is fully booked until December 21st.  

Xiamen: Space situation is unchanged from last week - no congestion and rates have eased somewhat. Demand for space to European gateways remains strong at transit hubs and carriers require advance booking of 2 - 3 days.

Hong Kong: Similar to other major Chinese air freight gateways, HKG reports that demand for space to Europe is strong and rates remain firm; whereas there is adequate space to meet demand to US gateways.

India: Major Indian air freight gateways report adequate space to meet demand although Bangalore is reporting that space availability is tight and there remain some delays at transit hubs. Last week Delhi reported that more than 100 flights were hit by inclement weather as dense fog engulfed the national capital. A total of more than 200 arrivals and departures of flights were affected on account of weather as well as "other reasons".

Korea: Despite strong volumes of transit cargo the overall congestion picture is improving because of a decline in demand for space from local shippers. There is adequate space to meet demand and air carriers have begun backing off from peak season rate levels. KE and OZ announced that FSC ex ICN will revert  to ZERO effective December 16th. 

Sri Lanka: There was a significant drop in demand for space last week which freed up space on the weekend freighter to NYC and CMH.  Paradoxically rates have gone up because of an increase in passenger loads and seasonal cargo. Market conditions should return to normal in January.

Thailand: Although demand for space to the US has eased, it is still strong enough that air carriers are not providing spot quotes. Airlines expect export volumes will increase towards the end of December, prior to Thailand’s long holiday period. Some factories will be closed from December 26th to January 3rd.

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