Date: Jan 16 2017
Title: Air Freight Market Update Report for Week 03


Demand for space continues to build across Asia in advance of Lunar New Year (January 27th). Air carriers began increasing rates and cargo backlogs have been reported in Korea and Taiwan. As cargo volumes continue to build  at transit hubs there may be some slight delays in transit times.

According to World ACD, a premier provider of worldwide air cargo market data, the air cargo peak season at the end of the year played out as one of the better ones in a long time: cargo yield increased at a much larger percentage than in previous years, and volume growth in November accelerated for the fourth month in a row. Worldwide cargo yield improved in November by 3.9% over the previous month and by 8.7% compared with August. Overall volume increased by 6.9% YoY. Characteristically, exports from China and Hong Kong played a major role in the positive end-of-year developments. In the main markets from Asia Pacific, between August and November the USD-yield to North America rose by 25% and to Europe by 30%.  Air cargo has not seen such seasonal yield improvements since 2009.

Following are highlights from around our Asian network.

Bangladesh: An upcoming Muslim Congregation called Bishwa Ijtema will be held from January 13 to 15 and a second phase from January 20 to 22 in the immediate vicinity of Hazrat Shahjalal International Airport (DAC).  The government expects worldwide attendance to be between three to four million visitors.  There will be serious traffic congestion associated with the Ijtema which will delay cargo transport to and from the airport. Airport operations will be normal and there have been no announcements of flight cancellations.

China

Shanghai: Last week airlines dropped rates to the US and Europe by approximately 10% to 20% in response to less demand for space. This week is anticipated to be a different story as factories begin pushing out product in advance of Lunar New Year.  Carriers are expected to increase rates in line with stronger demand for space.

Xiamen: There are no reports of backlogs and ample space to meet demand.  Spot rates are available for the large volume shipments.

Guangzhou & Shenzhen: Available space to the US and Europe began to tighten last week.  Air carriers are looking for 2 - 3 days advance booking and airfreight rates to the US and Europe have increased 3 - 5% compared to a week ago.

Hong Kong: Similar to other Chinese gateways, demand for space to the US and Europe began increasing along with freight charges.

India: All flights to US gateways are full and rates have trended upward accordingly; although air carriers are quoting spot rates for large volume shipments with confirmed booking. 

Korea: There are heavy cargo backlogs for shipments destined to ORD, JFK and LAX. Fueling the heavy demand for space are shipments out of Asia transiting via ICN. Demand for space is expected to peak this week before the long Lunar Holidays. Airfreight rates were stable last week, but may spike this week depending on the strength of transit shipments.

Sri Lanka: There is no significant change from last week.  Market demand remains soft.

Taiwan: There is a serious backlog of 120 tons of cargo to the US & Europe.

Thailand: The volume of export cargo from Thailand to the US and Europe continues to surge and space is quite tight. Airlines expect cargo demand to continue to growing up to the 4th week of January. Airlines require one week advance booking.

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