Date: Jul 10 2017
Title: Air Freight Market Update Report for Week 28

Airfreight volumes from Asian gateways remained strong last week. Transit hubs in Taiwan and Korea were able to reduce cargo backlogs although there remains much to be done and transit times continue to run longer than normal.  Rates across the region are holding firm at relatively high levels. Booking cargo in advance continues to be a necessity at just about every major gateway in the region.

Airfreight data released by HACTL and PACTL (Hong Kong & Shanghai airport operators) for June indicates that total (import and export) tonnage was 16% greater than the same month a year ago and greater than the prior two months by 17.6% and 11.8% respectively. According to Wolfe Research airfreight is seeing the most sustained growth since 2010

Following are highlights from around our Asian network.

Bangladesh: Congestion has started building up and carriers have responded by raising rates. Available space is tight because major carriers have reduced their space allocations in response to rescreening requirements. 

Shanghai: Demand for space to US gateways eased sufficiently to motivate carriers to reduce rates in the range of 5 – 10% and be open to quoting spot rates for large shipments. Cargo backlogs persist to Canadian (3 flights) and Latin American (2 flights) gateways.
Xiamen: Demand for space to US gateways is exceeding capacity and carriers have increased rates accordingly.  NH ceased accepting new bookings to the US East Coast. Advance booking of 4 – 5 days is required. 
Hong Kong: Already strong demand for air freight space gained additional momentum last week. Carriers expect demand to remain strong and have signaled a potential rate increase around the middle of the month. Advance booking of 2 -3 days is strongly recommended. 

India: Most air freight gateways were plagued by delays associated with the implementation of new GST rates to Customs’ EDI system.
Delhi: There is adequate capacity to meet demand although advance booking is still required and subject to onboard confirmation.  
Kolkatta: Available space remains tight and rates are on the high side. Cargo will only be accepted against advance booking and is subject to onboard confirmation .
Mumbai: Polythene wrapping of cargo is mandatory during Monsoon season which will last until the end of September. 
Chennai: Available space remains tight and airfreight rates high.  Cargo booking is delayed to U.S. and European gateways. Transit times are running 4 – 5 days longer than normal.

Indonesia: Although there is no congestion at the Jakarta gateway, congestion at transit hubs has caused transit delays and enabled carriers to impose rate increases in the area of 20% to US gateways. Transit times to LAX, ORD and JFK are 5 – 7 days longer than normal. 

Korea: There has been steady progress working down the cargo backlog which now stands at 100 tons. Transit cargo is taking 1 – 2 days to be onforwarded. Air freight rates are unchanged from last week and KE and OZ announced the will reduce Fuel Surcharges to zero effective July 16th.
Sri Lanka: The overall market remains soft despite a pick-up in air freight exports by major retail shippers such as Mast and Nike. Air freight rates are unchanged and transit hub congestion is causing delayed transit.

Taiwan: The backlog of air freight cargo stands at 200 tons. Most of the backlog is attributable to transit cargo. Transit time to US gateways is running 4 – 5 days and 3 – 5 days to European gateways. 

Thailand: Available space remains tight and transit hub delays continue to adversely impact transit times. Airlines are only accepting cargo destined to the US on Express rates. Advance booking of one week is required. Transit time to the US East Coast is 5 – 8 days and 4 – 7 days to the US West Coast.

Vietnam: Demand for space exceeds capacity. Cargo space from SGN to LAX is overbooked by 2,000 tons. Transit times to LAX are 7+ days and 9+ days to JFK and ORD. Rates remain at high levels and are unchanged from last week. 

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