Date: Jun 05 2017
Title: Air Freight Market Update Report for Week 23

Demand for space out of Chinese gateways has abated following the Dragon Boat Festival holidays and the completion of Apple’s new product shipments. However, Korea, India and Southeast Asia gateways continue to report strong demand.

According to the Loadstar, a multimodal online news resource for the logistics industry, airlines say they are having the best May/June for five or six years, while forwarders are reporting that there are no more “soft” BSAs. Customers are already concerned about air freight rates and space in the fourth quarter peak.

Several airlines attempted to raise their rates in March, only to be refused by customers. But such is the demand that, according to one source, some of the largest forwarders are now only able to book ad hoc, subject to availability, with preferred carriers, after refusing to agree earlier to BSAs.

Following are highlights from around our Asian network.

China: All major gateways reported an easing of demand for space. In Shanghai, Apple appears to have completed the bulk of its new product shipments which had been a major consumer of air freight space. Other gateways reported some lingering congestion at transit hubs and are still encouraging advance bookings of 3 – 4 days. Rates appear to have held steady through last week.

Hong Kong: Compared to last week, market demand is down slightly and there is adequate space to meet demand.  Customers are still encouraged to book 2 – 3 days in advance. 

Delhi:  Space situation is normal, but advance booking is required and subject to onboard confirmation.  Airfreight rates are the same as last week.  Cargo is being uplifted after 24hours with onward delays of 1 - 2 Days to all US, European and Far East gateways. 
Kolkata: Leather and perishable exports have started to pick up. All airlines are experiencing 3 - 4 days additional transit time to US gateways.  Rates remain unchanged.
Bangalore: Space situation is tight and rates remain on the high side. Carriers are accepting cargo only against advance booking and subject to onboard confirmation.
Mumbai:  EDI problems at the airport are persisting.  Entry and exit bills take a long time to get processed causing heavy back logs at the airport. 
Chennai: Airport operations remain in a sorry state. Space is tight and bookings to US and European gateways are delayed. Rates remain high.

Korea: Available space is very tight because of the ongoing Hyundai Motors recall which is being compounded by GM/USA’s decision to recall its new Spark minicars because of problems with its airbag system. GM is expected to ship 200 tons of air freight per week from ICN until August. Although rates to the US West Coast remain unchanged, increases in the range of 7% - 8% have been imposed to the East Coast. Shippers should also expect at least 3 – 4 days waiting time after delivery of cargo to a carrier’s terminal.

Sri Lanka: Soft demand for export space is expected to persist through the middle of next month.

Taiwan: Carriers have increased airfreight rates and space is tight to US and European gateways.

Thailand: Strong demand for space to US and European gateways has made for tight space availability. Carriers are experiencing longer transit times because of lingering congestion at transit hubs.

Vietnam: Heavy backlogs of cargo continue to plague airport operations and transit hub congestion is contributing to longer than normal transit times. Bookings can be confirmed one week in advance. 

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