Date: Mar 20 2017
Title: Air Freight Market Update Report for Week 12


Demand for air freight space throughout the region remains very strong.  Air carriers have been steadily increasing rates in response to strong demand and transit hubs are experiencing congestion.  Last week there were some delays in transit times because of the Northeast snow storm and a volcanic eruption in Alaska. 

Following are highlights from around our Asian network.

China

Shanghai: Very strong demand for space has resulted in backlogs and rising rates.  Shipments to the US are backlogged 1 – 3 flights and European cargo is backlogged 1 – 2 flights. The situation has been exacerbated by the cancellation of flights by major carriers and the severe snowstorm which hit the US Northeast. Air freight rates to US and European gateways are up 10% to 15%.
Shenzhen & Guangzhou: Space to the US is tight because of strong demand combined with the impact of a volcanic eruption in Alaska and the Northeast snowstorm, both of which caused flight cancellations and delays.  Air freight rates have increased approximately 15% to 30%.
Hong Kong: Available cargo space remains tight as demand for space continues to build, especially to LAX and ORD. Strong demand has enabled air carriers to continuously raise rates which is expected to be the case through month end. 

India: The Northeast snowstorm played havoc with flight schedules to the US East Coast and resulted in very tight available space for cargo destined to that region. Major air freight gateways are reporting strong demand for space and rate increases in the range of 15% to 20%. Advance bookings are required and congestion at transit hubs may elongate normal transit times. Some carriers are only accepting cargo at Express rates.

Korea: Heavy volumes of transit cargo have sharply tightened available space. Consequently airlines raised freight rates last week and announced another round of increases before month end. Rates on OZ & KE were increased 7 - 9% to US gateways effective March 16th  and UA announced a 7% increase effective March 20th .

Taiwan: CI and BR are reporting backlogs of 160 tons to US and European gateways as of March 15th.

Thailand: Demand for space is slightly stronger than last week.  Transit times are running longer on some routings because of congestion at airline transit hubs. Advance bookings are required and airlines have stopped quoting spot rates until next month. 

Vietnam: There are still heavy backlogs in SGN and HAN to all destinations.  Airlines cannot keep up with demand and prime carriers have been offloading an average of 250 cbm’s of cargo in SGN and HAN. Low cost carriers (LCC’s) such as FD, VJ, BL are fully booked through the end of the month.

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