Date: Mar 06 2017
Title: Air Freight Market Update Report for Week 10


A surge in demand for air freight space last week was primarily driven by typical quarter end shipping patterns although a secondary driver was the rumored strike by East and Gulf Coast longshoremen. Many China based shippers accelerated order fulfilment in advance of the pending strike. Last Monday, however International Longshoremen's Association (ILA) President Harold Daggett urged East and Gulf Coast workers to abide by their contract and forego a strike.

Following are highlights from around our Asian network.

China

Shanghai: Demand for space to the US and Europe surged last week along with rates which increased 15% to European gateways and 40%+ to the US.  Available space with Primary air carriers is critical and many are reporting daily backlogs of new bookings.  Further exacerbating the situation, carriers are expected to cancel some flights in order to further boost rates. Demand for space to the US West Coast is particularly strong and prone to backlogs.
Shenzhen & Guangzhou: Strong advance bookings and concern about a potential East Coast port strike have contributed to tight market conditions.  Rates are expected to increase about 15% to 20% and transit times are ranging between 2 – 5 days to the West Coast and 3 – 7 days to the East Coast. Xiamen: In response to strong demand for space, carriers have increased rates 15% to 20% and require 5 to 6 days advance bookings. Demand for space is particularly strong to the US East Coast.  Transit times are taking an extra 2 - 3 days.
Hong Kong: Demand for space is hot as electronics shippers airfreight new products before the end of the first quarter and other manufacturers accelerate shipments in advance of a potential East Coast port strike. Air freight rates are expected to increase this week if demand for space is sustained.

India
Delhi: There is a slight spike in demand for cargo space to European and Far East gateways, whereas demand to US gateways is relatively soft. Rates remain unchanged from last week.
Kolkatta: There are no reports of backlogs and rates are stable.
Bangalore: Available space to the US and UK has gotten tighter primarily because of delays at transit hubs. 

Korea: There is adequate space to meet demand although transit cargo volumes out of China have been building. OZ announced that it will raise rates this week although KE most likely hold the line. 

Taiwan: There is a backlog of 180 tons destined to US and European gateways.

Vietnam: Very strong demand for space is expected to continue through the end of the month.  Airlines do not have sufficient space to meet demand and have been offloading approximately 250 cbm’s of cargo ex SGN and HAN.  Air freight rates have increased 40% since the end of January. 

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