Date: Jul 03 2017
Title: Air Freight Market Update Report for Week 27


As anticipated, air freight volumes remained heavy last week and major gateways are reporting strong advance bookings for the coming week. There was some positive developments at the TPE and ICN transit hubs; however, backlogged cargo at these hubs remain and waiting times for onforwarding are adding two to seven extra days. We expect to see demand ease now that the second quarter has ended although it will take time to completely work down existing cargo backlogs. Booking cargo in advance continues to be a necessity at just about every major gateway in the region.

Following are highlights from around our Asian network.

Bangladesh: A backlog of cargo built up last week in advance of the Muslim EID holiday which began on June 25th and lasts through July 1st. Airlines are requiring 4 – 5 days advance booking. 

China
Shanghai: Demand for space is exceeding capacity. The situation has been exacerbated by a series of volcanic eruptions on Alaska’s Bogoslof Island which triggered an ash cloud that caused several airlines to adjust their transpacific operations. Flights to gateways in Canada and Latin America have been seriously impacted and are experiencing delays of three and two flights, respectively.  Air carriers are requesting 3 - 4 days advance booking. 
Hong Kong: The market situation is similar to last week – strong demand and static capacity making for challenging space planning. Clients are advised to book cargo 2 – 3 days in advance of desired uplift.

India:
Delhi: The Custom’s EDI system was back to normal operations last week and air freight rates decreased approximately 5%. Advance booking is still required and subject to onboard confirmation and transit times are running longer than normal primarily because of transit hub congestion.
Kolkatta: Available space is tight and rates remain on the high side. Airlines will only accept cargo against advance booking and is subject to onboard confirmation.
Bangalore: Space situation is tight and rates are on the high side. Cargo will only be accepted against advance booking and is subject to onboard confirmation.  
Mumbai: Delayed processing by the Custom’s EDI system persists and is expected to worsen during scheduled maintenance for changes in the Goods and Services Tax (GST). Polythene wrapping associated with rainy season conditions is compulsory at Mumbai airport. There was a slight surge in export cargo last week in advance of the new GST tax which goes into effect on July 1st.
Chennai: Airport operations continue to be plagued by the impact of flight cancellations associated with the Qatar situation. Space is tight, rates remain high and transit times are running longer than normal.   

Korea: There is approximately 200 tons of cargo backlogged at ICN which is taking 2 – 3 days to be uploaded.  Airport authorities expect the situation to gradually improve in July as some of the auto recall programs begin to wind down.  Rates are unchanged from last week.

Taiwan: Although backlogged cargo has been reduced by about 25% from last week, it remains at a high level because of strong volumes of transit cargo. Waiting times to onforward transit cargo are about 6 – 7 days. Clients should advance book cargo by three days prior to the desired departure date. Carriers have been able ot increase rates to US and European gateways. 

Thailand: Demand for export air freight space continues at a high level and transit times are subject to congestion at transit hubs. Most major airlines (e.g., QF, BR, KE, OZ) will only accept bookings on Express rates.

Vietnam: Market conditions remain in a state of chaos because of strong demand for space to the US in advance of the second quarter-end and July 4th holiday. All airlines are overbooked until July 4th and have been increasing rates daily. Transit times to LAX are running 7 days and 9 days to ORD and JFK. Air carriers expect the situation to carry forward to September.

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